A flurry of cold, depressing bad news, like the weather. Almost comical stories of the wealthy leaving France to avoid the 75% tax on high incomes (over €1M), before the Constitutional Court overturned the measure early in the New Year. Will Gérard Depardieu and his pals return? Unlikely. To quote one of France’s leading actors: “I am leaving because you consider that success, creation, talent, in fact anything that is different, should be penalised.” So said Depardieu in response to Prime Minister Ayrault’s opinion of him being “pathetic” for taking tax residency in Belgium (this was before Depardieu’s Russian foray).
President Hollande seems not to care about the Constitutional Court and has vowed to drive through some other tax on the higher earners: “We will always ask for more from those that have the most,” he declared.
Another personality to arouse controversy was Bernard Arnault (pictured), Chief Executive of the luxury goods group, LVMH, who is also moving to Belgium. In attempting to gain Belgian citizenship, could France’s richest man be paving a way to enter the tax haven of Monaco by the “back door”? Rich French people often switch nationality before heading to the Mediterranean It all looks shoddy for France’s image to the outside world, coming hard on the heels of the spat with the Indian aluminium giant, ArcelorMittal. Before Christmas, ArcelorMittal had announced the closure of its plant at Florange in July 2012, giving a deadline of the end of the year for prospective suitors to come forward with offers to take the plant over. No one was forthcoming and there was even talk of nationalising the plant. The whole world stood back in shock at the affront on private enterprise. Eventually the French government was obliged to stand aside and allow economic forces to dictate and private business to make its own tough decisions (and let’s not forget that Mr Mittal still employs over 20,000 people in France even with the loss of 600 at Florange).
One solitary bit of good news, which might have escaped the attention of most, was the settlement early in the year between employer and employee unions on means to “fluidify” the conditions of hiring and firing, allocating employees to parts of the economy that are actually working, rather than hanging onto them at places (like Florange) where things definitely are not. Employers have been saying for ages that they need to be able to take employees on under short-term contracts, rather than the kind of “jobs for life” that many French people assume is a God-given right. Employers also need to be able to act quickly and decisively, so if things have stopped working economically they can make staff redundant without protracted disputes with the unions. This “fluidifying” of the conditions of employment should eventually feed through into the unemployment figures, as structurally there will be more incentive to hire staff in the sectors of the economy that are coming out of the recession.
Unemployment is currently running at just over 12% and looks likely to worsen over the next 12 months with PSA, Renault, Virgin Megastores, as some of the big names making swathing cuts to their workforce. Plus ça change – as we enter 2013 – plus c’est la même chose!