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Sarkozy Lifestyle Dents Hollande Efforts to Narrow Budget Gap

Photographer: Kenzo Tribouillard/AFP/GettyImages

A man passes by the entrance of the new offices of former French President Nicolas Sarkozy in Paris. The 58-year-old lawyer-by-training now has a 300 square meter (3,230 square feet) state-paid office less than half a mile from the Elysee presidential palace at an annual rental cost of 180,000 euros. Close

A man passes by the entrance of the new offices of former French President Nicolas... Read More

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Photographer: Kenzo Tribouillard/AFP/GettyImages

A man passes by the entrance of the new offices of former French President Nicolas Sarkozy in Paris. The 58-year-old lawyer-by-training now has a 300 square meter (3,230 square feet) state-paid office less than half a mile from the Elysee presidential palace at an annual rental cost of 180,000 euros.

Keeping former President Nicolas Sarkozy in style costs the French taxpayer more than 2 million euros ($2.6 million) annually as his successor drags citizens through an unprecedented shrinking of the state budget.

Sarkozy, Jacques Chirac and Valery Giscard d’Estaing, the three living French ex-presidents, are each entitled -- like their U.S. counterparts -- to an office, staff and a lifetime of security at taxpayers’ expense. Unlike the U.S., where the compensation and perks of ex-presidents are capped by the “Former Presidents Act,” France has no laws that limit or review the benefits.

“It seems impossible for the government, let alone parliament, to get a fair estimate of the cost to the state of an ex-president,” said Rene Dosiere, a lawmaker affiliated with the ruling Socialist Party, who specializes in state expenses. “There’s no budget line for it. My estimate puts it between 1.5 and 2 million euros per president. Sarkozy seems to have a bigger staff, his benefits may surpass 2 million euros yearly.”

With President Francois Hollande hauling France through a belt-tightening to meet European Commission demands on fiscal discipline, every centime of public money is under scrutiny. Although expenses of ex-presidents are minuscule when set against the 5 billion euros more in spending cuts Hollande is seeking this year, with Europe’s second-largest economy on the brink of a recession and unemployment at a 13-year high, mounting social discontent is putting all compensation under the microscope.

“Austerity is unlikely to hit former presidents,” said Philippe Braud, a professor at Paris’s Political Sciences Institute. “It would be considered stingy for a current president to crimp his predecessor’s lifestyle.”

Sarkozy Exit

Hollande is struggling to contain a budget deficit that the European Commission sees at 3.7 percent of gross domestic product this year, more than the French pledge of 3 percent. The president is pushing through a series of unpopular overhauls, including streamlining an overextended pension system and making labor rules more flexible -- steps that have made him France’s most unpopular president in more than 30 years. Worse, a majority -- or 53 percent -- of the respondents in an Ifop poll said Sarkozy would have done a better job.

Sarkozy, who in May became the first French president to fail to win re-election in more than 30 years, was both a victim of Europe’s debt crisis and sanctioned for his flamboyant, “bling-bling” personal style -- with his penchant for Ray-Ban sunglasses and holidays on the yachts of rich friends.

The 58-year-old lawyer-by-training now has a 300 square meter (3,230 square feet) state-paid office less than half a mile from the Elysee presidential palace at an annual rental cost of 180,000 euros.

Ex-Presidential Perks

At least eight people work in Sarkozy’s office, including Consuelo Remmert, his model-turned-singer wife Carla Bruni’s stepsister. Staff wages are paid by ministries to which they used to belong.

Giscard, 87, president from 1974 to 1981, has seven staffers and an office near the National Assembly, an upscale Paris neighborhood on the left bank of the Seine river. The office of Chirac, 80, president for 12 years until 2007, who’s suffering from ill health, didn’t respond to questions.

Each ex-president’s car, office and staff salaries and bonuses cost about 1.7 million euros a year, MP Dosiere said. In addition, there are travel, postage, supplies and phone charges. According to a State Auditor report in 2010, the annual cost of a security officer was 71,879 euros, excluding bonus.

Ten security guards, including two chauffeurs, ensure the security of Sarkozy, his wife and daughter, more than Giscard and Chirac, Dosiere said.

Monthly Allowance

In the U.S., the four ex-presidents, Jimmy Carter, George H. W. Bush, Bill Clinton and George W. Bush, cost about $3.8 million a year, excluding security and health.

A 1985 letter by then-French Prime Minister Laurent Fabius to set guidelines for ex-presidents never became official. It gave no spending cap, while recommending ex-presidents get two chauffeurs, two security guards, protection measures for private homes, seven aides, including a cabinet chief, two secretaries, one archivist, three “typists” and a personal assistant.

The monthly allowance for a former president is about 6,000 euros. They’re also lifetime members of the Constitutional Council, a seat that earns 11,500 euros monthly as long as they’re an active member. Sarkozy’s office said he only gets half the allowance because he’s not currently active. Hollande has said he’ll drop the membership rule, starting with himself.

The prime minister’s office, which handles a part of the expenses of former presidents, declined to comment.

Sarkozy Solicited

“It is legitimate that people wonder about the cost, but former presidents have a role to play and need to maintain a status,” Francoise de Bollardiere, Giscard’s communication chief, said in an interview. “But times have changed. A young ex-president can do a lot when he leaves the Elysee.”

Shortly after his defeat, Sarkozy promised to retire from French politics, telling Le Monde newspaper “I want to make money,” a rare remark in a country that has a complicated relationship with wealth and doesn’t talk about getting rich.

In an interview this month in the conservative magazine Valeurs Actuelles, Sarkozy talked about his post-presidential life with Bruni and their 17-month-old daughter Giulia, saying it was his “duty” to consider returning to public life to help the country facing an economic and social crisis.

Sarkozy’s office has refused to deny reports in Le Monde and the Financial Times that he was offered a position to head a $500 million fund by the Qatar Investment Authority devoted to investments in Brazil, Spain or Morocco.

Needs Review

Sarkozy gets a lot of offers, but has not committed to any, his press officer said. A member of his Union for a Popular Movement Party told Agence France-Presse he would create his own fund to invest in France and create jobs.

Giscard’s aide Bollardiere said ex-presidents’ compensation needs to be reviewed to adapt to new circumstances.

“A former president gets offers today, like from private equity funds,” she said. “That didn’t exist in 1981.”

Giscard and Chirac have both published books. Giscard participated in the writing of the European Constitution, which was never passed, and gives a few paid-for conferences every year. Chirac, who has an environmental foundation, is no longer active in public life.

Sarkozy’s Paris-based law office reported 2011 revenue of 3,511,818 euros and a profit of 517,455 euros. He is one of the three major shareholders of the firm.

Costs, Benefits

The former president has also been on the global speaker circuit like his counterparts Tony Blair from the U.K. and the U.S.’s Clinton.

He has spoken on economic and global topics in the U.S., Qatar, Abu Dhabi, Switzerland and Brazil for more than 100,000 euros a pop according to French media reports, a figure his office declined to confirm, except to say that he’s not paid for all conferences.

Sarkozy’s activities, while uncommon in France, mirror those of Blair, who was U.K. Prime minister for a decade until 2007. Blair advises foreign governments and companies, including JPMorgan Chase, in addition to aiding charities and playing a role in the Middle-East peace process.

“Sarkozy’s choices will set a precedent about what can and can’t be done by an ex-president,” said political science professor Braud. “He must do a cost-benefit analysis -- he likes a certain lifestyle and to make money. Is that compatible with a return on the political stage? France’s public opinion prefers politicians who pretend to disdain money.”

To contact the reporter on this story: Helene Fouquet in Paris at hfouquet1@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net

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