Core Viewpoint - The article highlights the significant capital outflow from France to Luxembourg and Switzerland due to political instability and the looming threat of wealth taxes, with a notable increase in investments in Luxembourg insurance products reaching €13.8 billion in 2024, a 58% surge from the previous year [3][5]. Group 1: Political Instability and Economic Impact - The political turmoil in France has eroded economic expectations, leading to a lack of majority in parliament and frequent changes in prime ministers, which hampers pro-business policies [5]. - The French government is exploring new tax sources, including a one-time additional tax on high-income earners and a profit tax on large corporations, amidst a projected budget deficit of 5.4% of GDP for 2025 [5][6]. - The downgrade of France's long-term foreign currency issuer default rating by S&P from "AA-" to "A+" reflects the growing economic concerns [5]. Group 2: Wealth Management Trends - There has been a doubling in inquiries about Luxembourg as a destination for wealth management since June of the previous year, driven by political uncertainties [6]. - Luxembourg's appeal lies in its diverse product offerings and political stability, making it a preferred choice for French investors [6][7]. - Switzerland is also experiencing significant capital inflows, with many investors seeking its traditional safe-haven status [6][8]. Group 3: Migration of High-Net-Worth Individuals - A resurgence of the "millionaire migration" trend is noted, with many wealthy individuals considering relocation to Switzerland for its stability, despite tax concerns [8]. - According to a survey by Knight Frank, the top factors influencing migration decisions among high-net-worth individuals are business opportunities and financial stability, with political stability ranking third [8]. - France is projected to see a net outflow of 800 high-net-worth individuals, while Italy and Switzerland are expected to benefit from this trend with net inflows of 3,600 and 3,000 individuals, respectively [8].