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Economic relations

France and Italy are, each for the other, the second largest trading partner (with €66 billion trade in 2010, slightly positive for Italy). Italy is both France’s second largest customer (absorbing, in 2011, €31.3 billion in French exports) and its fourth largest supplier (€34.5 billion in French imports). France is traditionally the largest foreign supplier of food products in Italy and Italy is the largest market for the sale of French food. Italy is also a privileged outlet for French exports of automobiles (12%) and metal products (10%), and a significant share of French imports of capital goods comes from Italy (24% French imports in this sector in 2010).

FDI received in Italy comes largely from France (about 1/5th of the stock), with France being the second largest foreign investor in the country after the Netherlands. Net flows of direct investment between the two countries remained positive despite a sharp decline during the crisis (€0.9 billion in 2009, €2.1 billion in 2008, €17.2 billion in 2007 according to the Bank of France). French FDI stock in Italy was €45.5 billion in late 2009. France represented the 20th largest investor in Italy in 2010.

French investments involve all economic sectors. As an illustration of this dynamic, in early 2011, Lactalis strengthened its participation in its Italian counterpart Parmalat. French groups are present in the Italian retail, energy, and banking sectors. With regards to industry, France is well positioned in capital goods and intermediate products, with companies such as Michelin, Alstom, Air Liquide (these three companies have a centuries-long presence in Italy), Alcatel, Total (exploration and production and distribution). The sector of energy concentrates about 10% of French investments. Edison is controlled by Italy’s A2A and EDF. For its part, GDF Suez owns 10% of the Roman public water and energy company, ACEA.

Services account for almost three-quarters of French FDI in Italy, nearly 30% of which is in insurance and banking. The Banca Nazionale del Lavoro (BNL) was acquired in 2008 by BNP-Paribas, while since 2007 Cariparma has been part of the Crédit Agricole Group. In transportation, in 2009, Air France-KLM took a 25% holding in Alitalia, and the SNCF controls 25% of the private rail group NTV. French groups have also gained a foothold in the luxury and fashion sector by entering the capital of Bulgari, Fendi, Gucci, and Bottega Veneta.

In terms of major contracts, the nuclear partnership between France and Italy was largely gutted by the referendum held in Italy in mid-June 2011, which confirmed the definitive end of the Italian civilian nuclear program’s revival. The transport sector carries high stakes: Airbus is fulfilling a €6 billion contract through 2017; Alstom provides AGVs [high-speed, self-propelled carriages] to the private carrier NTV. Space-defense is also important in Franco-Italian cooperation including the JV between Thales and Finmeccanica (Telespazio and Thales-Alenia Space).

Generally, these are the sectors with high technological content, which now represent the most interesting business opportunities. In these areas, where Italy has developed expertise and is globally recognized, the country is seeking international partners (aerospace, automotive components industry, chemistry, mechanics, telecommunications and IT, pharmaceutical and biotech industry).

Updated on 01.10.12

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