French Minister for Economy Éric Lombard has announced a new investment product aimed at boosting the country's defence sector. Here's what you need to know.
The Call to Invest in France's 'War Economy'
Éric Lombard has urged citizens to consider investing in the country's war economy, highlighting the launch of a new investment avenue. He emphasized the need for the European Union to become more self-sufficient in terms of defence, given the uncertainty surrounding the American umbrella.
How the Investment Works
- Minimum Investment: €500
- Indirect Shareholding: Investors become indirect shareholders in French defence companies.
- Long-Term Investment: Designed for long-term investment with potentially better returns than savings accounts.
The Aim: €450 Million Target
The initiative aims to raise €450 million of the €5 billion needed by French defence companies to enhance military self-sufficiency.
What is the Investment Product?
The new product will be an investment package similar to other long-term savings or investment products like Assurance Vie or Plan d’épargne Retrait. It can be accessed by individuals in the same way as other investments.
- Minimum Investment: €500
- Maximum Investment: Several thousand euros
- Lock-up Period: Funds cannot be withdrawn for at least five years.
Who Can Invest?
The investment will be possible directly through BPI France or via a financial vehicle like Assurance Vie. After the initial launch through BPI, the product is expected to be available through other French banks.
Foreigners resident in France can access similar savings or investment packages, generally requiring a French bank account. However, Americans in France should consult a financial advisor due to potential PFICs implications and reporting requirements with the IRS.
Is it a Risky Investment?
While full details are pending, here’s what experts say:
Potential Upsides:
- Economist Philippe Crevel suggests the defence industry is a promising market with increasing government orders.
- Long-term investment may yield returns slightly above average, around five percent over five to 10 years.
Potential Downsides:
- Céline Boutbien advises caution, noting BPI investments typically involve Risk Mutual Investment Funds with varying risk levels.
- Investors should await more information to understand the full risks involved.
Comparison with Livret A
For context, France's Livret A savings account had a 2.4 percent interest rate as of February 2025.
Expert Opinion
The French Financial Markets Authority (AMF) will expedite the approval process for defence-focused investment funds, encouraging companies to create new funds for the defence industry and tech.