Bloomberg News

French President-Elect Francois Hollande’s Economic Proposals

May 06, 2012

Following are the main election pledges and positions of Socialist Francois Hollande who won France’s presidential election against incumbent Nicolas Sarkozy. Hollande gets a five-year term.

-Deficit and growth targets:

*3 percent of gross domestic product public budget deficit and 1.7 percent GDP growth in 2013.

*Zero percent deficit in 2017 and 2 percent to 2.25 percent growth.

-Debt targets:

*88.6 percent of GDP in 2013.

*80.2 percent of GDP in 2017.

-Taxes:

*Impose a tax on financial transactions.

*Impose a 75 percent income tax on earnings above 1 million euros ($1.32 million) and raise the rate to 45 percent for the income bracket between 150,000 euros and 1 million euros per year.

*Repeal 29 billion euros of tax breaks over the next five years.

*Increase total tax level to 46.9 percent in 2017 from 45.1 percent in 2012 (payroll and profit).

*Increase tax on biggest companies to 35 percent.

*Reduce tax on small and medium companies to 15 percent.

*Scrap Sarkozy’s 1.2 percent VAT increase.

-Public spending:

*Raise state spending by 20 billion euros over five years.

*Limit growth annual in public expenditure by 1.1 percent.

*Allow those who have worked more than the legal minimum of 41.5 years to retire from the age of 60.

*Limit pay of executives at state-owned companies to 20 times the lowest wage.

*Total number of civil servants won’t rise.

*Hire 60,000 teachers and school employees and 5,000 police officers over next five years.

*Hire 150,000 youths in state-subsidized jobs over the next five years.

*Cut French president’s and Cabinet ministers’ pay by 30 percent.

-Salaries and Labor:

*Index the minimum wage to economic growth.

*One year target from start of mandate to reverse the increase in unemployment.

-Banks:

*Pass legislation to split banks’ retail and investment activities as early as July or early August.

*Impose a special tax on banks (no details given).

*Curb bonuses, ban “toxic” financial products, ban French banks from operating in tax havens.

*Create a French public bank to support industry.

*Double the Livret A saving ceiling deposit to 20,000 euros and use the deposit to fund new social housing construction.

-European Central Bank and European Union:

*Request that the ECB expand its mandate to support growth, lend directly to states and give the European Stability Mechanism a bank license or allow the ESM to lend directly to states.

*Renegotiate the EU’s fiscal accord to allow for the issuing of joint euro bonds and for funding industry and growth measures.

*Amend the fiscal treaty to add growth measures and oppose European policy that’s based only on austerity measures.

*Opposition to balanced budget “golden rule.”

-Energy:

*Impose a carbon-emission tax at EU borders and create an EU energy policy.

*Cut France’s nuclear energy share of total electricity output to 50 percent in 2025 from 75 percent today.

*Freeze gasoline prices for three months after elections.

*Restore a “floating” fuel tax to allow prices to drop when the price of refined fuel products falls.

*Close the Fessenheim nuclear power plant, finish construction of the Flamanville nuclear reactor and abandon construction of Penly nuclear reactor.

-Defense, Security and Foreign Policy:

*Withdraw all French combat troops from Afghanistan by the end of 2012.

*Maintain France’s nuclear weapons as deterrence.

*Could reject NATO missile defense shield that’s being built under U.S. leadership.

*Maintain the sanctions policy against Syria and Iran.

-Other:

*Suspend sales of state-owned shares of companies.

*Impose limits on leveraged buyouts to exclude participation by financial firms.

*Build 500,000 housing units per year of which 150,000 are rent controlled.

*Decentralize the French state and give local and regional leaders more power.

*Creation of a public rating agency.

*Allow same-sex marriage and adoption.

*Allow vote for non-citizens in local elections.

*Hold a parliamentary debate on immigration quotas.

*Ban the word “race” in the French constitution.

*Amend the constitution to make it say that France is a secular state.

*Achieve gender parity in the government.

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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