Home > Europe, Politics > Nicolas Sarkozy’s Conservative Revolution: The Price for France

Nicolas Sarkozy’s Conservative Revolution: The Price for France

Fujimoto Kazuisa writes in Japan Focus:

The French mass media call President Nicolas Sarkozy’s political style “new.” It is true that he won the presidential election under the slogan of “severing ties” with the past, “advancing innovation” and “taking action” toward the creation of “a new France.” But actually, one look into the contents of Sarkozy’s professed reform tells us that it is no more than “conservative revolution” that combines new liberalism and new conservatism. The truth is that there is nothing new about it.

Let us look at major “reform” bills that the Sarkozy-led ruling party Union for a Popular Movement is trying to railroad with a majority of 323 seats in the 577-seat national assembly. Tax deduction for overtime work, and reduction of income, inheritance and gift taxes are pump-priming measures aimed at stimulating the economy by alleviating the burden of taxes of high-income earners and social insurance premiums of businesses.

As is the case with other industrialized nations, France is suffering from the hollowing out of domestic industry caused by a declining birthrate combined with advanced aging of society and globalization. Under such circumstances, these policies will only aggravate the financial situation and add to social insurance costs.

To deal with the situation, the administration came up with proposals to reexamine the increase in medical expenses to be borne by citizens and requirements to receive pension benefits. It also proposed to raise the rate of value-added tax (equivalent to Japan’s consumption tax) from 19.6 percent to 25 percent as a way to generate “social insurance costs.”

Frankly speaking, such measures are an attempt to forcie ordinary citizens and the socially vulnerable to pick up the tab for the cost of social insurance that should be shouldered by companies and high-income earners. Even some members of the ruling party are criticizing the move as harmful to “consumption” and as an obstacle to economic development.

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Categories: Europe, Politics
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