Sarkozy wants business-friendly France
Tuesday, 10 July 2007
PARIS, July 9 (AP): France is now open for business. Nicolas Sarkozy won the French presidency on pledges to open up the economy, and his government is selling one message: Things have changed.
Goodbye to stretching jobless queues and famously French strikes and street protests, they say. Hello to a new business-friendly economy with a flexible labour market.
New, but still French. Some European neighbours have been questioning Sarkozy's capitalist credentials after he lobbied against free-market wording in a new EU treaty. Meanwhile, EU finance ministers are likely to grill Sarkozy on his spending-heavy financial plans Monday.
Still, change is in the air. In their efforts to draw a thick line between Sarkozy and his predecessor, French officials are delivering their message in the language fellow conservative Jacques Chirac fought so hard against: English.
"We too often gave you the image of a country with escalating social contributions, an increasingly complex legal system, and discouraging red tape," Prime Minister Francois Fillon told the World Investment Conference in La Baule, western France, last month.
Addressing his audience in the language of his British wife, he said: "That is all over! We are going to make France a country where it's easy to do business, where you can concentrate on running your company without hassle or pressure other than those of the market."
The contrast with Chirac, who distrusted unfettered markets and once stormed out of an EU summit because a French businessman addressed leaders in English, couldn't be stronger.
Sarkozy's new regime is not just about language. After years of lagging behind Europe's more nimble economies in terms of growth, France has a president who is pushing through parliament proposals this week that would scrap charges on overtime, cut taxes and encourage home ownership. And Sarkozy has not even been on the job two months.
His appointment of Lagarde, the former head of Chicago-based law firm Baker & McKenzie, was hailed by business leaders at the Paris Europlace Financial Forum last week as a signal the president is reaching out to them.
"It's a good sign for international investors," said Matthieu Louanges, executive vice president of Pimco Europe.
Lagarde, speaking at the conference, cast herself as a business leader running a government department.
She urged bankers and economists to come back to France - and not just for the food. Sarkozy's policies are designed to stop the trainloads of executives who commute to London each Sunday evening, she said, arguing for a "brain-drain back."
Yet Sarkozy's commitment to open markets took a bashing at a summit of European Union leaders last month, when he lobbied successfully to strike a commitment to "free and undistorted" business competition from a list of the EU's guiding principles.
Strong worker protections and a large public service are central to France's modern structure. In a 2005 survey of 20 nations by polling company GlobeScan, France was the only country where a majority did not back the free market.
Sarkozy has also set off alarm bells at the European Central Bank both by criticising the ECB's stewardship of the euro - whose rise Sarkozy blames for handicapping European exports - and by announcing a delay in French commitments to reduce its debt and deficit.
When France signed up to the euro, it agreed to a set of rules designed to prevent governments from ramping up spending and boosting inflation.
To implement his reforms, Sarkozy claims he needs an extra two years to eliminate the deficit, which the previous government promised to do by 2010. He will join EU finance ministers Monday for their monthly meeting in Brussels in a bid to stem criticism.
His moves show France still prides itself on being an exception.
Herve Novelli, France's government minister for businesses and foreign trade, insisted that his nation can be economically liberal and also believe in intervention and protectionism when necessary. "There's no contradiction," he told the news agency.
While Sarkozy may be more vocally pro-market and friendlier to the United States than Chirac, the new president was raised in the same political landscape.
Goodbye to stretching jobless queues and famously French strikes and street protests, they say. Hello to a new business-friendly economy with a flexible labour market.
New, but still French. Some European neighbours have been questioning Sarkozy's capitalist credentials after he lobbied against free-market wording in a new EU treaty. Meanwhile, EU finance ministers are likely to grill Sarkozy on his spending-heavy financial plans Monday.
Still, change is in the air. In their efforts to draw a thick line between Sarkozy and his predecessor, French officials are delivering their message in the language fellow conservative Jacques Chirac fought so hard against: English.
"We too often gave you the image of a country with escalating social contributions, an increasingly complex legal system, and discouraging red tape," Prime Minister Francois Fillon told the World Investment Conference in La Baule, western France, last month.
Addressing his audience in the language of his British wife, he said: "That is all over! We are going to make France a country where it's easy to do business, where you can concentrate on running your company without hassle or pressure other than those of the market."
The contrast with Chirac, who distrusted unfettered markets and once stormed out of an EU summit because a French businessman addressed leaders in English, couldn't be stronger.
Sarkozy's new regime is not just about language. After years of lagging behind Europe's more nimble economies in terms of growth, France has a president who is pushing through parliament proposals this week that would scrap charges on overtime, cut taxes and encourage home ownership. And Sarkozy has not even been on the job two months.
His appointment of Lagarde, the former head of Chicago-based law firm Baker & McKenzie, was hailed by business leaders at the Paris Europlace Financial Forum last week as a signal the president is reaching out to them.
"It's a good sign for international investors," said Matthieu Louanges, executive vice president of Pimco Europe.
Lagarde, speaking at the conference, cast herself as a business leader running a government department.
She urged bankers and economists to come back to France - and not just for the food. Sarkozy's policies are designed to stop the trainloads of executives who commute to London each Sunday evening, she said, arguing for a "brain-drain back."
Yet Sarkozy's commitment to open markets took a bashing at a summit of European Union leaders last month, when he lobbied successfully to strike a commitment to "free and undistorted" business competition from a list of the EU's guiding principles.
Strong worker protections and a large public service are central to France's modern structure. In a 2005 survey of 20 nations by polling company GlobeScan, France was the only country where a majority did not back the free market.
Sarkozy has also set off alarm bells at the European Central Bank both by criticising the ECB's stewardship of the euro - whose rise Sarkozy blames for handicapping European exports - and by announcing a delay in French commitments to reduce its debt and deficit.
When France signed up to the euro, it agreed to a set of rules designed to prevent governments from ramping up spending and boosting inflation.
To implement his reforms, Sarkozy claims he needs an extra two years to eliminate the deficit, which the previous government promised to do by 2010. He will join EU finance ministers Monday for their monthly meeting in Brussels in a bid to stem criticism.
His moves show France still prides itself on being an exception.
Herve Novelli, France's government minister for businesses and foreign trade, insisted that his nation can be economically liberal and also believe in intervention and protectionism when necessary. "There's no contradiction," he told the news agency.
While Sarkozy may be more vocally pro-market and friendlier to the United States than Chirac, the new president was raised in the same political landscape.