Mon Jan 9th, 2012 at 07:26:27 AM EST
Merkel, Sarkozy to seek growth, jobs for euro zone | Reuters
(Reuters) - The German and French leaders meet on Monday to discuss ways to boost growth in euro zone states struggling to overcome the sovereign debt crisis and rising unemployment, and finalise a deal to increase fiscal coordination within the currency union.
They may also discuss a financial transaction tax, the "Tobin tax," being promoted by France but resisted by Britain unless adopted on a global scale, which could split the European Union at a summit at the end of the month.
Not quite the bill being promoted in France, where it's Sarkozy is going to Berlin to insist on a "Tobin tax" (whatever he means by that) and state that France will go it alone if Germany doesn't agree. Sarkozy in doublet and hose thrusting and parrying, the man in non-stop movement: as usual, the illusion of action. Last week, it was the "social VAT", or his old plan dragged out and dusted off of raising VAT to finance health and pensions while reducing employers' contributions – a move that is generally agreed to be of little practical use. But the point is to occupy media space while appearing to be doing something.
Meanwhile, a poll organized by think tank Terra Nova (close to the Parti Socialiste) and the Nouvel Observateur shows fairly massive condemnation by the French electorate of Sarkozy's incapacity to deliver what he promises. 70% of those polled assessed Sarkozy's performance over his mandate as negative (with only 3% as "very positive"). 73% consider that he has not kept his campaign promises. Of those 73%, 57% say that he never had any intention of keeping them:
* question put to the 73% who considered Sarkozy had not kept his promises: answers "never intended to keep them", "they were not feasible", "the crisis got in the way".
"The crisis prevented him from keeping them" is only largely accepted by those who declare themselves mainstream right supporters; all other political categories in the poll reject the "crisis ate my homework" excuse, generally trotted out to explain the difficult situation of the French economy (which, in turn, is supposed to explain all the other problems of French society). "France is bankrupt", there's no money left... Well, public debt has risen by 40% as the government has rescue-helicoptered the financial sector, and the budget deficit stands at 5.8%. But between only 31% and 38% of the deficit can be put down to the financial crisis, according to the auditing body of the French state, the Cour des Comptes (FR, PDF).
|Finances publiques : de l'art d'aggraver les choses - Alternatives Economiques|| Public finances: the art of make things worse- Alternatives Economiques |
|la compression des recettes a résulté également d'un choix politique : celui des baisses d'impôts, notamment en faveur des plus aisés. Ainsi, entre 2006 et 2011, le total des recettes fiscales nettes en euros courants a baissé de 0,6 %. Par exemple, les allégements de droits de succession et de donation décidés en 2007 représentent un manque-à-gagner de 2,3 milliards d'euros par an pour les caisses de l'Etat. Et la récente réforme du barème de l'impôt de solidarité sur la fortune (ISF) leur coûtera environ 2 milliards en année pleine à partir de 2012. De leur côté, la réforme du crédit d'impôt recherche et celle de la taxe professionnelle ont fait baisser les recettes de 6 à 7 milliards d'euros. Réformes auxquelles il faudrait encore ajouter des mesures comme la baisse de la TVA sur la restauration (pour environ 3 milliards d'euros par an avant la création d'un nouveau taux intermédiaire à 7 % en 2012). Voir le graphique : Evolution des recettes et des dépenses publiques de 2000 à 2011 -->||... the revenue squeeze also resulted from a political choice: that of tax cuts, especially for the wealthier. Between 2006 and 2011, total net tax revenues in current euros fell by 0.6%. For example, 2007 cuts in inheritance and donation taxes represent a shortfall of 2.3 billion euros per year for state coffers. And the recent reform of the wealth tax (ISF) will cost about €2bn a year from 2012. The reform of the research tax credit and the business tax have lowered revenue by 6-7bn euros. To these reforms should be added measures such as the restaurant VAT cut (about 3 billion euros a year before the creation of a new intermediate rate of 7% in 2012).|
| Ces coupes dans les recettes n'ont été compensées ni par les nombreuses mesures fiscales catégorielles mises en place pour faire face aux problèmes de financement ni par les efforts réalisés pour limiter les dépenses de l'Etat. Le principe du non-remplacement d'un fonctionnaire sur deux partant à la retraite a certes conduit à la suppression d'environ 120 000 postes entre 2008 à 2011. Mais, outre qu'il a contribué à désorganiser des services publics comme l'école ou la police, il n'a pas réellement permis de réaliser des économies sur les dépenses de personnel de l'Etat, qui ont continué à croître jusqu'en 2010.||These cuts in revenue were offset by neither by the many minor tax fixes set up to deal with funding problems nor by the efforts to limit state spending. The principle of non-replacement of a public servant out of two leaving for retirement has certainly led to the elimination of approximately 120 000 jobs between 2008 to 2011. But, besides the fact that it contributed to the disruption of public services like schools or police, it has not really succeeded in making savings on state staff costs, which continued to grow until 2010.|
This survey by Alternatives Economiques goes on to detail the many failures of Sarko's policies: immigration, poverty, social security, education, and above all employment where the watchword "work more to earn more" has proved (unsurprisingly) a total wipeout. 350,000 industrial jobs have gone in four years. The policy of subsidising overtime, according to Alternatives Economiques, costs the state 4 bn euros a year and deprives the economy of 400,000 fulltime jobs. Overall, handing money to the rich has resulted in... no trickle-down whatsoever.
Who Could Have Predicted?
To return to the Terra Nova poll, Sarkozy's position in public opinion looks worse yet with the breakdown by party alignment: of those consider his performance negatively, scores are very high among those who declare themselves sympathetic to the centrist Modem party (86%) and National Front sympathisers (75%). The strategies of moving towards the centre, or of appealing to the far right (as in the past), look unlikely to be successful in this light. All that remains for Sarkozy is to run a personal campaign based on perceptions of the character of the candidates. That's what he's doing with the new-policy-a-week number.
Will it work? It might. Socialist candidate François Hollande is also running, to a considerable extent, an image-based campaign in which he is quiet, unmoving, an anchor of presidentialability compared to Sarkozy's endless froth. And the latest voting intentions poll shows Sarkozy catching up: 26% in the first round compared to Hollande's 28%, and 46% in the runoff compared to Hollande's 56%. Time for Hollande to start getting his skates on: the danger is that, by regaining credibility as a potential winner, Sarko will shift the balance and - above all - get all his media backing, even the reluctant, lined up behind him.