PARIS (Reuters) - French President Francois Hollande declared on Thursday that companies would have to pay a 75 percent tax on salaries over a million euros after his plan for a “super-tax” on individuals was knocked down by the constitutional court.
Hollande, battling to win back support as his economic goals fall away within a year of his election, said shifting the millionaires’ tax onto companies would be a way of getting the wealthiest French to contribute to ending the crisis.
“I am sticking by my pledge,” Hollande said, during an hour-long interview on primetime television where he urged a disillusioned nation to trust that he was doing all he could to get the stalled economy back on its feet.
On the defensive, with his approval ratings in tatters, Hollande acknowledged he had failed to anticipate the crisis dragging on for so long, but all the tools were being put in place to restore growth and bring down unemployment.
Anxious to get left-wingers back behind him, the Socialist leader said that despite his effort to reduce the public deficit in a climate of stalled growth, no new taxes or tax hikes would be imposed on households this year or next.
He warned, however, that the French would have to work longer under a pension overhaul being worked on for next year in order to reduce a gaping deficit in the retirement system.
“My first objective is to reverse the unemployment rate,” Hollande said, explaining that he was gunning for the relentless rise of past years to come to a stop at the end of the year and for the 10.6 percent jobless rate to start falling from then.
He said measures in place to trim companies’ labour costs via tax rebates, a plan to loosen hiring and firing rules and his intention to simplify regulations that strangle small businesses provided all the tools for a recovery.
“This is not a wish, nor is it a forecast. It’s a commitment and a battle,” he said, adding: “I am the chief of this battle.”
The TV interview is part of a new public relations push that has included a two-day, hand-shaking tour in southeast France. The trip backfired when hecklers asked what had become of campaign pledges and one protester was carted off by police.
Hollande’s ratings have slid faster than those of any other French president as he has irked left-wingers with pro-market measures to foster growth, angered business leaders with high taxes and failed to stem the rise in unemployment.
His government has backtracked on its growth and deficit targets, and few believe the job market is close to recovering.
Thursday’s resurrection of the 75 percent tax saved Hollande some face after the Constitutional Court crushed what had been his most high-profile campaign promise to his left-wing base.
The carefully stage-managed interview looked set to be upset by news a few hours earlier that actress Julie Gayet had filed a legal complaint for breach of privacy over rumors on the Internet alleging a romantic liaison with the president.
However no reference was made to a complaint the Paris prosecutor’s office said it received from Gayet on March 18 against “persons unknown” over rumors circulating online for some weeks. A lawyer for Gayet, cited in French media as saying the rumors were baseless, did not respond to phone calls and Hollande’s office declined to comment.
Hollande, 58, has already suffered media speculation over his relationship with first lady Valerie Trierweiler. The pair are unmarried but have been together for several years.
Negative publicity would hurt Hollande today, with just 22 percent of respondents in a survey by pollster CSA on Thursday rating him a “good” president and 51 percent rating him “bad”.
Separately, an LH2 poll for Le Nouvel Observateur weekly gave him a 27 percent approval rating and found 81 percent of people were unhappy with his efforts on jobs.
Data this week showed households’ purchasing power fell in late 2012 for the first time since 1984 and that jobless claims rose for a 22nd straight month in February to reach the highest level since June 1997, amid a stream of industrial layoffs.
National statistics institute INSEE sees unemployment rising to 11 percent by mid-year, making Hollande’s insistence that he can reverse the trend by year-end sound hollow.
Additional reporting by Chine Labbe, Elizabeth Pineau and Ingrid Melander, edited by Michael Roddy