Hollande has a plan

François Hollande wishes to show that he is at the helm, accepts the unpopularity of the measures he is about to enact and has a program to put the becalmed French economy back on a course of growth by the end of 2014, while sharing the necessary sacrifices more equitably among rich and poor. What he says and does is being watched closely by everyone, and most especially by the parties of the European left, who are anxious to find some other way out of the crisis. Hollande has yet to show that such a way exists.

In his interview on the TF1 channel, Hollande was transparently keen to appear as a "normal" president. But the new normality involves great changes for France. Unlike Mitterrand in 1983 (who backed off abruptly from a strong leftist program after adverse market reaction) Hollande now needs, not to rectify, but to specify.

And the first specific measure involves the largest public deficit cutback in 30 years. The figure of 33 billion euros was expected. Unexpected, however, was the distribution of it. A third will come from reductions in public spending, except in Education, Interior, and Justice. Another third, from across-the-board tax hikes, including the famous 75-percent rate "without exceptions, but of a temporary nature" for individuals whose income amounts to more than a million euros per year. The rest is to be paid by companies that do not reinvest their profits.

Hollande apparently wishes to brave the contrary winds of public opinion, and give the impression he knows where he is going. He is maintaining his objective of reducing the deficit to three percent by 2013. He is not subject to the same pressures as the presidents of bailed-out countries or those on the brink of intervention. But he knows that if he does not deliver, then Germany, with which he has managed a certain rapprochement, will irremediably detach itself from France.

In these circumstances, what remains of his agenda for growth? The president seems convinced that squaring the public accounts is a necessary condition, but also that, in order to recover its competitive footing, France needs far-reaching reforms. Hollande is going to flexibilize the labor market: he is giving employers and unions three months to come to an agreement, and if they fail to do so, the government will decide. And he proposes a major revision of the unemployment insurance system, which is widely seen as being excessively financed by companies.

As if there were any need to underline the fact that the rich are against this program, the president of the luxury brand firm LVMH, Bernard Arnault, who is a French citizen, has announced he will apply for Belgian nationality. Though it does not directly have to do with his taxes, the gesture is charged with feeling not only against Hollande, but against France itself, on the part of the head of a luxury-brand group whose very image and sales appeal worldwide is based on its quintessential Frenchness.