Qatari influence in country growing amid France’s financial problems

France’s economy is currently facing significant strain, with implications that could reverberate across the European Union. The crisis centers around rising public debt, projected at over €3 trillion (or 112% of GDP), and a widening deficit, which the French government has struggled to curb despite various austerity measures, i24news writes.

Inflationary pressures have exacerbated these issues, impacting everything from energy to food costs, while high public spending commitments in healthcare, pensions, and social welfare strain the national budget further.

To address the crisis, France has proposed a 2024 budget aiming to reduce the deficit from 4.9% to 4.4% of GDP. However, the EU is closely monitoring this, as there are widespread concerns over France’s ability to meet fiscal targets amidst political and social challenges. The economic health of France is integral to the EU’s stability, and any significant downturn or fiscal mismanagement could have cascading effects on the bloc. A weaker French economy could slow down EU-wide growth, especially as Europe is already grappling with inflation, energy crises, and security concerns related to the Russia-Ukraine conflict.

To alleviate its financial problems, France has decided on a strategic partnership with Qatar. Only a fraction of this alliance is transparent — at the beginning of 2024, the emirate pledged to invest €10 billion into the French economy. The hidden part is much larger and silently grows as Qatar’s significant investments in France’s sports and luxury sectors gradually increase. The Qatari government owns luxury hotels in Paris, Cannes, and Nice, a stake in Bernard Arnault’s renowned French brand, Moët Hennessy Louis Vuitton. Qataris own department store company Printemps, owns the majority of the Paris Saint-Germain football club’s shares.

In 2022, France became the second-largest European investment destination for Qatar after the UK, with assets of more than 25 billion euros, and we are talking only about direct purchases by Qatari entities.

This provided Qatar “with cultural leverage that can influence French domestic affairs and foreign policy.