The finance community got very emotional when a left wing President got elected in France last week. Being french and working in a bank, I must admit I almost cried but what's done is done.
Yes Hollande, the new president, is probably going to raise taxes for both companies AND the upper class, remove a lot of mechanisms french people use for fiscal "optimization" and increase taxes for banks.
But who has time to dwell on the past when we should instead be praying for Europe to get better? We need to move on and that's why I found 3 reasons why France's new President isn't THAT bad:
- Sarkozy (the former president) wanted to extend the over indebtedness law that forces banks to write-off loans if the client can't pay anymore. Debt bailouts are a big enough threat as it is. No one in finance want more people applying for 10 loans at the same time and then crying when they become insolvent.
- Sarkozy (again!) passed a tax on financial transactions. It could be a good thing to prevent HFT abuses but being one of the few countries in Europe with this kind of law is just going to make France less competitive. It's the proof that even right wing can be hostile to finance.
- Hollande needs a majority at the National Assembly if he wants to make his idea a reality. This battle isn't won yet. If he loses France will sit still for 5 years, business as usual.
On a more serious note I think Hollande victory in France isn't such a big deal. Europe is not getting better anytime soon so he doesn't have a lot of space to maneuver anyway.
So what do you guys think? Is it really that bad or is it an opportunity to shake things up a little bit in Europe and move from a Finance-Germany duo to an Europe with more input from the other countries?
Disclosure: I didn't vote for Hollande or Sarkozy and this post isn't meant to be about politics only but about how politics could influence the economic situation.
1) Move to Monaco 2) Get your money into a Swiss Bank Account
For who did you vote for then? Philippe Poutou ?? :P
Actually he is will propel France and Europe's collective economies into the stratosphere. Good luck Hollande
You make decent points - though a lot of it does seem to come down to the fact the guy has some nutty plans, but we feel they're not likely to come to fruition. Hopefully that's true.
You are right Scott. I think that's true for a lot of politicians though. If they were to put all the things they promised into action, the country would be ruined in a year. When they become President, they grow more reasonable.
France doesn't claim global jurisdiction over corporate tax incomes, and we also have a tax treaty with them that covers corporate dividends. If a French multinational earns money abroad, you pay corporate income tax within that country and then 15% dividend taxes, as per our treaty. Said treaty was honored for 14 years under Mitterand, France's prior socialist president.
I think investors are getting a little too worked up about this.
1.) Hollande is not Kirchner. 2.) Even if Hollande is a Kirchner, it only affects the French assets of French companies, and France is too stable to be going communist overnight.
The main fallout will have to do with a shift in the EU's balance of power with regards to the sovereign debt crisis away from austerity. Most campaign promises will be severely restricted by the potential for sovereign debt spreads to blow out.
Hes proposing a 75% tax on the wealthy....
http://www.bbc.co.uk/news/world-europe-17189739
in my opinion that probably enough cause for many bankers to move to places like London for tax purposes. This is gonna hurt France
To be honest, there really aren't a lot of people making over 1 mill in France. The bankers making that kind of money tend to be on desks in London anyway. It's a completely counterproductive proposal but I somewhat doubt the overall impact will be all that significant.
This 75% tax rate is only for revenues OVER 1 million. So yes the financial effect isn't that big (the tax rate is already over 50% currently).
What bothers me is that it's the equivalent of pointing out successful people and saying "You don't deserve this money, we'll take it back from you". I really don't like the mindset. People shouldn't be ashamed of being wealthy and for me this kind of tax encourages that.
Tout a fait d'accord.
grave..
Every incoming leader disappoints somebody. He's going to be no different.
These people will say ANYTHING to get elected, but when it comes to doing, oftentimes not much happens.
Once markets realize he's just another politician, things'll calm down.
le changement c'est maintenant ?? haha
This one is quite funny too
http://www.dailymotion.com/video/xo00w3_le-changement-c-est-maintenant_…
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