The "Agence des participations de l'Etat" (APE - French Government Shareholding Agency) and the vagaries of a strategic governance of the State over public enterprises

Thanks to a long and original tradition, the French state has the essential tools to intervene in the economy, and public enterprises have been and continue to represent an engine of economic development, despite very... [ view full abstract ]

Thanks to a long and original tradition, the French state has the essential tools to intervene in the economy, and public enterprises have been and continue to represent an engine of economic development, despite very important privatizations that have been carried out since the 1980s.

In 2004 the creation of the French Government Shareholding Agency (Agence des participations de l'Etat - APE) sought to focus on the role of the state as shareholder, and not of its other levers: regulatory action, fiscal policy, public procurement or export assistance. The APE sought to renew the legal framework of the shareholder state in order to give it a real influence particularly on national strategic assets, maximizing its control at least as a private shareholder.

While the creation of the APE enables the state to have better means of guidance and control, it leaves many uncertainties, ambivalences and tensions between the two objectives of the French shareholder state: the logic of implementation of public policies and those of valorisation of its assets (Bance, Bauby and Rey, in Bance (dir.), Quel modèle d'Etat stratège en France, PURH, 2016).

Recent reports (Azéma, L’impossible Etat actionnaire, janvier 2017 http://www.institutmontaigne.org/publications/limpossible-etat-actionnaire; Cour des comptes, L’Etat actionnaire, rapport 2017 http://www.ladocumentationfrancaise.fr/rapports-publics/174000061-l-etat-actionnaire-rapport-2017) have, however, questioned the intrinsic quality of the state as asset manager and have stressed the need to value public assets in line with the European state aide doctrine: states must be "prudent investors in a market-economy ". In this perspective, the shareholder state should place itself in a patrimonial logic of asset manager, as hedge funds, in order to meet the short and/or long-term public financing needs. Such a trivialization of the state's behaviours could then led it to abandon its traditional economic role and approach of public policy attentive to the harmonious development of its territory. It could also deprive the State of its capacity to take action to combat economic uncertainties and would certainly increase the cyclicality of the national economy.

Yet, another path could be followed to rethink the action of the State as shareholder in order to bring it more effectively into line with the needs of deploying the objectives of a strategic state in the perspective of economic, social, environmental and territorial development and cohesion.

This paper aims to identify the contribution as well as the limits of the APE, and to identify the strategic issues of the governance of SOEs. How these shareholdings should be managed and according to what purpose? Should it act as a "good father" to ensure the best return in the short or long term? Should it follow a strategic approach of economic and social development? Should it develop new ambitions to promote environmental sustainability?