French press review 30 October 2012

Left-leaning Libération has the bosses at war with the government, as those who run the businesses insist that the cost of labour will have to be reduced or they'll be forced to close the shop.

Presidential election 2012

The latest demand for an easing of charges comes from the top dogs, the men who run the biggest French businesses, and it has made the far left very angry.

Nathalie Arthaud of the Lutte Ouvrière (Workers' Struggle) party criticised "big bosses crying with their mouths full" which is certainly descriptive but probably neither hygenic nor safe. Former presidential candidate Jean-Luc Mélenchon's Parti de Gauche (Left Party) called the whingers "rapacious", while the Communist Party said they were "monsters of selfishness and ingratitude".

Officially, the government is playing the whole affair down, saying it understands the concerns of the rich gits, but has to consider the impact on the economy of any rapid change.

The bosses want the money they would no longer have to pay to be made up by increases in sales tax. The government is worried about the effect that would have on the buying power of already struggling consumers in an already contracting economy.

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Some Socialists are worried that the government is already too close to the fat cats, with the deputy Karine Berger saying they're a bunch of typical social democrats and all good friends of big business anyway.

Apart from the "tax to replace company charges" debate, there's the dispute over the strategy of application. The bosses want a short, sharp shock, the government would prefer a gradual shifting of the burden of payment.

You can understand the two points of view. Managers favour a one-off approach, because they know that the effects of such changes tend to have a short shelf-life. As soon as the unions know that the employers are paying less for their labour, they will immediately start negotiating and striking for salary increases, thus ensuring that the employers pay more for their labour. And so on, ad infinitum.

The government is, chiefly, interested in getting the national debt down to three per cent of gross domestic product in the course of next year. That means there's very little enthusiasm for adding a king's ransom to the debit side of the books with the increase in sales tax unlikely to make up the difference and very likely to plunge France into recession.