French business leaders stepped up criticism of the new left-wing government on Friday, lamenting a perceived anti-corporate bias and lack of competitiveness, despite the prime minister’s recent efforts to mollify them.
The presidency of Socialist Francois Hollande, who has angered some in the corporate world for adopting what they say are “soak-the-rich” tax policies and anti-business rhetoric, came in for heavy scorn on the last day of the Medef business lobby’s annual conference.
As well as introducing a 75-per-cent tax on millionaires, the Hollande administration is eyeing more taxes on banks and energy companies and has pledged to crack down on risky investment banking.
“We are sick and tired of being told how to behave,” Sodexo Chairman Pierre Bellon told Industry Minister Arnaud Montebourg, who was sitting on the same debate panel at the conference.
Mr. Montebourg, seen as more of a left-wing firebrand than Mr. Hollande, has been leading the front line of government talks with companies such as Peugeot and Sanofi to limit the pain of their layoff plans to the work forces.
“I will transmit your criticisms to the President,” retorted Mr. Montebourg dryly over intermittent booing from the audience.
Most speeches praised the German business model and criticized the comparatively less-competitive French economy and labour market.
Michelin chief executive Jean-Dominique Senard also praised the U.S. business environment, telling the audience his tire-making company planned to open a site there for the first time in decades.
“Everyone knows the cost of labour is higher in America … But they see firms as job creators,” Mr. Senard said. “Would that were the case in France.”
The state of South Carolina reportedly doled out at least $7.5-million (U.S.) in tax incentives for the new Michelin plant.
The criticisms came after French Prime Minister Jean-Marc Ayrault earlier this week sought to reassure the country’s alarmed business leaders, telling them that an upcoming tax reform would help to improve France’s flagging competitiveness – an apparent reference to plans to reduce social charges on labour.
Several bankers in recent weeks have said Mr. Hollande’s policies were an open invitation to leave the country, not just for them but for key corporate clients.
British Prime Minister David Cameron infuriated French politicians in June when he vowed to “roll out the red carpet” for French firms if Mr. Hollande followed through on his plan to raise taxes for the wealthy.
Tax lawyers have told Reuters that about 20 per cent of companies listed on the benchmark French stock market index, the CAC 40, are “seriously reviewing” such options.
Total CEO Christophe de Margerie, whose firm is among those earmarked for a higher tax bill to help battle state deficits, took a more measured tone and said the German model was just one among many and that companies had themselves to blame by not speaking in a unified voice.