An Economic View of France From Hollande
Hollande has promised to return the retirement age to 60, down from 62. This stipulation would apply, at least in the first year, to those who started work early and paid all their annuities, according to the candidate's Web site.
Under a section labeled "Redresser le pays dans la justice," or, "rehabilitate the country in justice," the candidate wrote that he would submit by July or August a plan to parliament that would balance the budget by 2017. Also part of this section is the promise to eliminate tax loopholes, curb taxes on small- and medium-sized businesses, raise the solidarity tax on wealth to its previous level, and to create a 75% tax bracket on those who earn more than €1 million a year. Finally, Hollande has determined he would remove Sarkozy's value-added sales tax.
Hollande wants to launch major employment projects by mid-July that would focus on training, wage policies, equal pay and pension security for France's work force. He would also prepare for energy transition by "preservation of natural resources and biodiversity, securing energy systems, development of industrial clusters and a new energy plan through massive thermal renovation of homes."
Teachers and civil servants are in luck if the French elect Hollande as he will recruit 60,000 of them to fill positions left by retiring public workers.
Hollande has said that he would look to separate banks' retail and investment arms, according to Reuters.
Under a Hollande presidency, renters could see the government on their side by imposing rent control laws that curb owners' power to freely determine rent prices.
It would be unwise to assume Hollande would successfully pass all these promises, and it's unlikely that his parliament will agree to all these reforms. Regardless, the uncertainty as to how Hollande will govern versus how Hollande has promised to govern, will leave investors concerned through the May runoff election.
"I think that's the biggest risk in Europe right now, and I think that's what can cause the greatest volatility," said Mark Lamkin, president and CEO, Lamkin Wealth Management. "That's what we're going to be watching very closely in the next 30 days on this runoff election."
-- Written by Joe Deaux in New York.
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