Hollande Promises Tax Harmonization in Six Years if Foreign Businesses Invest in France Now

French president Francois Hollande is seriously deranged if he expects businesses to take him up on his latest offer to Invest in France Now, See Harmonization in Six Years.

Hosting 30 heads of French units of foreign companies at his Elysee Palace, President Francois Hollande pledged to guarantee that taxes on an investment would not rise later – as has happened in the past – and VAT and duty rules for firms would be streamlined this year.

The Socialist president, who last month announced France would phase out 30 billion euros (24 billion pounds) in charges on companies by 2017 to reverse its slide in trade competitiveness, also said French business taxes would be harmonised with those of its neighbours, especially Germany, by 2020.

“A business, whether French or foreign, that wants to invest will have a commitment from the administration that the tax rules will remain the same, and that will be a guarantee.”

Skepticism Runs High

Skepticism runs high according to a survey by pollster Opinionway of heads of 253 companies whose revenue grew more than 15 percent in the past three years.

  • Nine out of 10 chief executives of firms exhibiting strong growth did not believe the government could boost economic output or help their companies become more competitive.
  • Eighty-nine percent did not consider Hollande able to reduce public spending.

The article notes that Hollande’s promise came the same day as a new law was introduced in parliament to impose tough fines on firms that shut operations still deemed economically viable.

The law was prompted by Hollande’s 2012 campaign promise to steelworkers at ArcelorMittal’s Florange blast furnaces in northern France that he would pass legislation to protect their jobs in case of a shutdown. Despite a government threat to nationalise them, the furnaces were later closed.

Hollande did not give businesses any reason he could be trusted. Nor did he say how he would meet his “guarantee”. Please note there is no legal basis for his promise.

He wants 6 more years just to get to the break-even point in competitiveness, but he will be gone by 2020 anyway. This man is completely clueless about two things

  1. What needs to be done
  2. When it needs to happen

Here’s a hint Mr. President: 2020 is not even in the ballpark. Besides, no one believes you can even do that!

Mike “Mish” Shedlock