Tue, Sep 11, 2012 - Page 6 News List

Hollande outlines new tax plan for recovery


French President Francois Hollande pledged 30 billion euros (US$38.4 billion) in new taxes and savings to balance the budget and fund a turnaround in two years, and rejected criticism of dragging his feet.

Hollande, whose popularity ratings have taken a dive less than four months after he took office amid mounting discontent over the flagging economy and job cuts, also said a 75 percent wealth tax on incomes over 1 million euros would not be diluted.

“The course is the recovery of France,” he said on Sunday in a TV interview on the TF1 channel.

“I have to set the course and the rhythm” to combat “high joblessness, falling competitiveness and serious deficits,” he said. “My mission is a recovery plan and the timeframe is two years.”

“The government has not lost time,” he added. “It has reacted swiftly.”

Hollande — who has famously said he does not “like the rich” — said 10 billion euros would come from additional taxes on households, “especially the well-heeled,” 10 billion more from businesses and 10 billion from savings in government spending.

It would be the biggest hike in three decades.

“We will not spend one euro more in 2013 than what we did in 2012,” he said.

He also vowed to curb unemployment, currently pegged at more than 3 million, in a year’s time.

Hit by the eurozone debt crisis, France’s economy just avoided entering a recession in the second quarter. Amid a decline in his popularity, Hollande has had the onerous task of preparing a budget for next year that must save more than 30 billion euros to meet EU deficit reduction rules.

Accused by critics of procrastinating and not adequately spelling out how he will fund his tax-and-spend program, Hollande said he could not perform miracles.

“I cannot do in four months what my predecessors could not do in five years or 10 years,” he said, referring to his immediate hyperactive, right-wing predecessor, former French president Nicolas Sarkozy, whose personal style and functioning were vastly different from Hollande, whose aim is to be a “normal” president.

However, far-right National Front leader Marine Le Pen scoffed at the president’s remarks, saying in a TV interview that the “fired-up powerlessness” of Sarkozy had been replaced by the “limp powerlessness” of Hollande.

Hollande also took a swipe at France’s richest man, LVMH chairman and chief executive Bernard Arnault, who has sought Belgian nationality, but denied wanting to become a tax exile.

“He must weigh up what it means to seek another nationality, because we are proud to be French,” Hollande said, adding that there would be no exceptions in a 75 percent tax on incomes above 1 million euros.

“One has to appeal to patriotism during this period,” he said.

Arnault said on Sunday he was not becoming a tax exile, despite seeking Belgian nationality.

“I am and will remain a tax resident in France and in this regard I will, like all French people, fulfill my fiscal obligations,” the world’s fourth-richest man said.

“Our country must count on everyone to do their bit to face a deep economic crisis amid strict budgetary constraints,” Arnault said, adding that the bid for dual nationality was “linked to personal reasons” and began several months ago.

An informed source said that Arnault’s move, news of which was broken by Belgian daily La Libre Belgique, was linked to a “sensitive” investment project that could be eased if he acquired Belgian nationality.

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