March 14, 2012 / 6:11 PM / 6 years ago

Hollande adviser wants to unshackle French business

PARIS (Reuters) - A Socialist government in France would concentrate on slashing red tape holding back businesses and tackling the budget deficit, an adviser to the party’s presidential candidate Francois Hollande said on Wednesday.

Hollande has unsettled some investors in campaigning for elections in April and May by calling the world of finance his “enemy”, and promising to renegotiate a European budget treaty and slap a 75 percent tax on high earners.

But Michel Sapin, a long-time friend and former finance minister in charge of Hollande’s program, said his government would be business friendly.

Sapin compared France with Germany, which has recovered strongly from the financial crisis, noting that business authorizations there took only 6 or 7 months. By contrast, companies in France were saddled with lengthy approval process which could take anything from 18 months to 7 years, he said.

“Time is money for companies,” he told a news conference. “The principal reform we want to undertake is the simplification of the administrative process, the clarification of responsibilities and the security and speed of decision making.”

Sapin, who was finance minister under President Francois Mitterrand in 1992-93, said the proposed 75 percent tax rate on those earning over 1 million euros a year was simply a temporary measure aimed at demonstrating that the rich would contribute their fair share to a budgetary effort in the coming years.

With only a few thousand people affected by the measure, its fiscal impact would be limited, but it had important symbolic value, he said.

“The first thing we need to do in France ... is the rectification of our government finances,” Sapin said, adding that this was vital for returning the economy to robust growth, which would in turn lower its relative debt levels.

“There is no need to remind you how easily we went from a debt of 60 percent of GDP to more than 80 percent. It took just 4 years...It will take us much more than 4 years to get back.”

Hollande has promised to eliminate the budget deficit by 2017, one year later than the target set by incumbent President Nicolas Sarkozy, who trails him in opinion polls before the two rounds of voting next month and in May.

Asked how long the 75 percent tax would need to remain, Sapin gave no direct answer. However, he said: “Is the effort required to get France out of the incredibly weak situation in which it finds itself an exceptional or an enduring one? ... It will be exceptionally enduring.”

Sapin said the Socialists did not oppose people who wanted to earn money unless their efforts became so desperate that they disrupted social cohesion. “We are not sending a message of punishing those who succeed. Earning more than 1 million euros a year does not necessarily mean success,” he said.

Former Socialist prime minister Laurent Fabius, who is also campaigning for Hollande, also suggested the proposed 75 percent tax rate, which has raised fears that football stars among others will flee France, may only be temporary.

Sapin said Hollande did not want to water down austerity measures in a European budgetary compact signed by 25 European leaders this month, which Germany has made a condition for supporting a second bailout of Greece.

“The idea is not less budgetary austerity, but austerity linked to growth at a European level because in lots of countries, except Germany, there is no possibility to stimulate growth at a national level,” he said.

Reporting by Daniel Flynn; editing by David Stamp

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