French press review 28 September 2012
Headlines in today's papers mirror a climate rife with crisis. Today, France's government prepares to unveil a belt-tightening 2013 budget funded by tax increases, while the planned shutdown of ArcelorMittal’s steel furnaces in the eastern Lorraine region is set to destroy more French jobs. Then there's the continuing hard times facing the French auto industry, on the eve of the Paris car show this weekend. Is there some light at the end of the tunnel?
“Prime Minister Jean-Marc Ayrault justifies costly fiscal bill,” headlines Le Figaro, as it scrutinises the French premier’s television appearance on Thursday. He spoke to the press on the eve of a presentation of his government’s first annual budget since President Francois Hollande’s election in May.
Monsieur Ayrault vowed to reduce the deficit to three percent of France’s Gross Domestic Product (GDP) in 2013, from a forecast of 4.5 percent this year. The government is targeting 10 billion euros in extra taxes on high-income households, 10 billion from taxes on businesses and 10 billion in spending cuts. That’s tantamount to 27 billion euros of taxes, notes Le Figaro, complaining that taxes are the only thing the Socialist government sees.
“Hollande causes a historic fiscal shock for the wealthy” says Les Echos in its front page story. The economic newspaper projects that the massive fiscal effort prescribed by the government amounts to 40 billion euros, with two-thirds set to be raised exclusively from taxes. Les Echos warns that the populist move to impose a 75 percent tax rate on incomes above one million euros, taxing capital gains interest and dividends as regular income could turn the markets against France.
Aujourd’hui en France/Le Parisien wonders if the government’s insistence on respecting the European golden rule of cutting the budget to three percent of national wealth isn’t far-fetched, as it awaits the unveiling of the 2013 budget during a cabinet meeting today.
Le Monde focuses its attention on Spain after the conservative government unveiled an austerity budget expected to pave the way for a request by Madrid for European bailout bonds. The paper notes that the 2013 budget rakes in 39 billion euros in spending cuts and tax increases to curb the public deficit, despite a recession, a jobless rate of nearly 25 percent and soaring debt repayments.
Le Monde says hesitation by the debt-ridden country to call Europe to its rescue has caused interest rates imposed on the markets by the markets to start flying again.
"Let’s demonstrate our objection," thunders L’Humanité, as the Communist party newspaper mobilises for Sunday’s grand rally of opponents of the European Treaty.
The Socialist-led government is facing a revolt from its allies, the European Green party, who are opposed to any ratification of the treaty in its current state. The Left Front party says it is in a state of war with President Hollande, since he ruled out any referendum on the treaty. Hollande opted instead for a parliamentary vote on the landmark charter, according to L’Humanité.
Libération weighs in on the planned closure of the Florange furnaces of steel giant ArcelorMittal. The plant in the eastern Lorraine region provides over 3,000 jobs. French President François Hollande reportedly tabled an offer to give the furnaces a symbolic euro before finding them a new firm willing to keep them working. Hollande met with steel tycoon Lakshmi Mittal at the Elysée Palace on Thursday.
The decline of France's manufacturing sector was a key issue in this year's presidential election campaign. Libé warns that the closure of Florange, the last major site in what used to be the heart of France's steel industry, would deal a fresh blow to the Socialist government's battle against unemployment.
Industry Minister Arnaud Montebourg is quoted as saying that the French government insists that any shutdowns are accompanied by ArcelorMittal making significant investments in other areas, citing a figure of 150 million euros.
ArcelorMittal is the leading supplier of steel products in all major markets including automotive, construction, household appliances and packaging. La Croix expresses deep concern about the bleak economic picture caused by ArcelorMittal’s plant closures. The Catholic paper says the shutdown of several steel industry sites in Belgium, Spain and now France does not augur well for the crisis-hit French auto industry.