By STEVEN ERLANGER
Published: July 12, 2012
PARIS — With his first Bastille Day approaching on Saturday, François Hollande
and his government have had a good start to his presidency, impressing
the French with a down-to-earth style. Mr. Hollande, a Socialist, and
his prime minister, Jean-Marc Ayrault, have ordered downgrades in
official luxury that have set a tone self-consciously different from
that of the supposedly “bling bling” presidency of Nicolas Sarkozy.
Pool photo by Kenzo Tribouillard
François Hollande has given up the presidential
Citroën C6 for a smaller Citroën DS5 diesel hybrid and reduced the ranks
of his official drivers.
In politics, symbols are also substance, and the changes range from the
large to the small. Mr. Hollande has actually taken the train to
Brussels, without a state jet following him, and his ministers have been
ordered to hit the rails when possible (with a free pass on the
national railway system). When they fly, they are encouraged to travel
in coach class on commercial airlines. (Upgrades on Air France are
probably a given for ministers, in any case.)
Official cars have been diminished in size and in luxury. Mr. Hollande
has given up the presidential Citroën C6 for a smaller but hardly shabby
Citroën DS5 diesel hybrid. He has reduced the ranks of his official
drivers to two from three, and they are now supposed to stop at red
lights. Mr. Ayrault gave up his C6 for a cheaper Peugeot 508. Cabinet
ministers have also traded down, and the housing minister, Cécile
Duflot, an ecologist who was criticized for wearing jeans to an Élysée
Palace meeting, has ordered four official bicycles.
Champagne at receptions has largely been replaced by Muscadet, a
considerably cheaper white wine, and prices at the official cafeterias
for ministerial employees, always a bargain, have been raised modestly.
Even security has been put to the knife, at least a little. Junior
ministers no longer get bodyguards, and the number of security workers
attached to the presidency has been reduced by a third.
In general, Mr. Ayrault has ordered his ministers to reduce their
official budgets sharply, by 7 percent in 2013 and by an additional 4
percent in each of the next two years.
As he promised during the campaign, Mr. Hollande has cut ministerial
salaries by 30 percent (including his own, to $18,000 a month from
$26,000). And for the first time, the salaries of ministers cannot
exceed the prime minister’s salary, which is about $16,000 a month.
Pierre Moscovici, the finance minister, told L’Express that “my salary
is lower than that of my chief of staff, 12,000 euros, and of a few
hundred of the civil servants” at the ministry. That is about $14,600 a
month.
There has, of course, been criticism, especially from the center-right
and from business leaders. Valérie Pécresse, the budget minister in Mr.
Sarkozy’s government, has ridiculed these efforts as nearly meaningless
in the face of France’s
budget crisis, with total debt nearly 90 percent of gross domestic
product and debt service alone costing more than $60 billion a year.
“The austerity of the left is hypocritical,” she said. “Who will believe
that the budget can be balanced by doubling the annual direct wealth
tax and by lowering the salaries of ministers?”
But the symbolism is also meant to prepare the French for tougher times
ahead, for some sacrifices to their own way of life and to the
social-welfare system in the face of high deficits and demographic
change.
Even more startling is the government’s intention to limit the
remuneration of the bosses of major state-owned companies, to about 20
times that of the lowest-paid employee, or about $550,000 a year — part
of an effort to end what Mr. Moscovici has called “intolerable
hyperinequalities.” Henri Proglio, the chief executive of Électricité de
France, reportedly earns $1.9 million a year — 64 times that of the
company’s lowest-paid employee — and he could be paid about a third of
what he gets now if the law goes through.
Luc Oursel, who recently took over the nuclear power company Areva,
could see his salary halved to $400,000 from about $825,000. Jean-Paul
Bailly, the chief of La Poste, could lose 41 percent of his $775,000
salary.
Given that French executives of state-owned companies already make less
money than many of their European counterparts, there is concern that
the restrictions, while essentially ideological and of little
consequence for the economy, would mean that companies vital to the
nation would attract fewer qualified managers. That atmosphere is
enhanced by Mr. Hollande’s plans to tax those making more than $1.25
million a year at 75 percent, which, together with the revived wealth
tax, could mean an effective tax rate of 90 percent.
Laurence Parisot, the head of the main business lobby, Medef, warned
that the government risked making France less competitive by restricting
salaries and piling more taxes onto an already heavily taxed private
sector. “We fear a programmed strangulation,” she said, warning Mr.
Hollande, “Be careful not to turn our country into a sort of enclave
disconnected from the rest of the world.”
There are few Socialist ministers with any business experience. Ms.
Parisot said that their plans instilled “a palpable anxiety and an
immense worry for every entrepreneur,” because they are “disconnected
from company life, from what a company can bear,” especially in a period
of minimal growth and high unemployment.
In two days of discussions this week with business and labor leaders,
Mr. Ayrault and his key ministers made an effort to prepare the unions
for changes to come, especially next year, when sharp budget cuts will
be necessary to go along with still-higher taxes. The government has
been urged by independent state auditors and by the influential Cercle
des Économistes to reduce the tax burden on the private sector,
especially for social benefits, to improve French competitiveness in a
globalized world.
Mr. Ayrault hinted that some of that burden might be moved toward income
taxes, rather than the corporate tax. He also said that there should be
a larger study of how to finance and even to reform France’s generous
social welfare programs.
But consultations take time, and Ms. Parisot remained unhappy with the
lack of progress on liberalizing a labor market hampered by generous
mandated benefits and rigorous job protections. She was also troubled by
suggestions that union leaders could be present during decisions about
compensation.
The government got a taste of reality on Thursday, when the French
carmaker PSA Peugeot Citroën, hit by the European recession, announced
that it would cut 8,000 more jobs in France. The social affairs
minister, Marisol Touraine, said, “We cannot accept something like
this,” and the government promised to study the problem.
But for Bastille Day, Mr. Hollande is sticking with the symbolism.
The traditional July 14 garden party, which used to be a way to honor
distinguished people from all walks of life from all over France, was
canceled by Mr. Sarkozy in 2010 to symbolize belt tightening. Mr.
Hollande will not dare resurrect it, although the Élysée gardens will be
open to the public on Saturday afternoon.
Mr. Hollande has decided, however, to maintain the July 14 military
parade, with jet overflights, armored vehicles and hundreds of military
personnel, an extraordinarily costly affair. And like a good politician,
he has decided to restore a nationally televised presidential interview
on Bastille Day. But given the low viewership expected on a Saturday
evening in mid-July, he will do it at lunchtime.
