French press review 12 September 2012

Rich people continue to make front page news here in France.

The left-leaning daily, Libération, earlier this week upset Bernard Arnault, the very wealthy boss of the the luxury conglomerate Louis Vuitton Moët Hennesey (LVMH).

Bernard's decision to apply for Belgian nationality led the Libé to suspect that he was taking his fortune of 21 billion euros in one of his own luxury bags to a country that is not proposing to slap a 75 per cent tax rate on the wealthy. Bernard has since categorically denied that he was motivated by fiscal concerns; insisted he will continue to pay taxes in France, and is suing Libération for the damage caused to his reputation.

Last summer, before the elections which saw the installation of a Socialist president and left-wing majority here in France, the weekly magazine Le Nouvel Observateur asked 16 of the nation's richest people what they thought of the tax regime. The article was headlined "Make us pay more", and that just about sums up the consensus of those who were rolling in it.

Back then, the well-heeled were ready to pay more.

Yesterday, on the strength of the Arnault debate, Le Monde

went after those 16 signatories and asked whether they were still prepared to pledge more of their personal fortunes to the effort to save the national ship.

Not too many of them could be found.

Those that answered the phone stuck to their guns.

One said the current government's plan was "morally legitimate, but financial and political nonsense". Another said he was happy to pay a bit more, but thinks 75 per cent is over the top and will simply accelerate the flow of capital and creative talent from France. Ambitious young people will leave, he said, not because they have millions now, but to save the tax due in a few years time when they will have millions.

Yet another said it was important to distinguish between inherited wealth and made money. Marc Simoncini, who made his fortune with the internet dating agency Meetic, said the government should tax inheritance, but leave newly-created money alone.

The millionaire boss of the Danone dairy empire, Franck Riboud, said he'd be happy to make an additional contribution to the national income, but would also like to see an overhaul of the entire taxation system.

The German Constitutional Court in the city of Karlsruhe is due to rule on the legality of the so-called European Stability Mechanism, the bag of money to be put aside to save Eurozone member states from drowning in their own accumulated debt.

Opponents say details of the proposal infringe both German and European law.

The German chancellor, Angela Merkel, badly wants an "OK to go" verdict. Fifty-four per cent of Germans hope the judges throw the proposals into the North Sea.

The court has a reputation for being mildly anti-European, having agreed to the Maastricht and Lisbon treaties only after adding several volumes of strict conditions to each.

How much difference it will all make remains to be seen, since the Spanish have already said they won't be having any of the current conditions, and economists remain divided on the wisdom of a system which requires stability mechanisms in the first place.