Hollande Thanks France’s Rich for Their Taxes After First Year

Photographer: Patrick Kovarik /AFP via Getty Images

French President Francois Hollande speaks during a press conference at the Elysee Palace in Paris on Thursday, May, 16, 2013. Close

French President Francois Hollande speaks during a press conference at the Elysee... Read More

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Photographer: Patrick Kovarik /AFP via Getty Images

French President Francois Hollande speaks during a press conference at the Elysee Palace in Paris on Thursday, May, 16, 2013.

French President Francois Hollande thanked wealthy taxpayers, promising to try to avoid burdening them further while defending his Socialist credentials.

“We’ve asked a lot of the French in 2013 and in 2012 -- it has been heavy,” Hollande said yesterday at a press conference in Paris marking his first year in office. “I want to salute their efforts, including the wealthiest, because we’ve asked a lot of them.”

With his popularity at a record low, the economy in recession and joblessness at an all-time high, Hollande is fighting to retain support for a program that he hinted yesterday may include raising the retirement age and cutting spending.

The remarks underline Hollande’s attempts to win over the country’s entrepreneurial classes -- after calling finance his “greatest adversary” during his election campaign and once saying that he “didn’t like” the rich -- as he seeks to cap unemployment, spur investment and boost France’s competitiveness.

While Hollande’s original plan to tax earnings of more than 1 million euros ($1.29 million) at 75 percent was thrown out by a French court, he still plans such a levy on salaries above that level and has restored higher taxation of household assets for France’s wealthiest citizens.

“The more spending cuts we can do, the less we’ll have to increase taxes,” Hollande said. “The ideal would be not to increase taxes on households in 2014.”

Hollande said yesterday that revamping the French pension system and spurring investment at both European and national level will be priorities for his second year in office.

Pension Losses

Talks between unions and business representatives to end “unsustainable” losses in the state retirement system would last from June through September. While skirting the politically sensitive subject of the official retirement age, he said that longer life expectancy will require the French to spend more years paying into the system.

“As long as we’re living longer, we’ll need to work a bit longer,” Hollande said. The reform isn’t simply to satisfy the European Commission, he said. “As president, can I leave us with a pension deficit of 20 billion euros in 2020?”

One of Hollande’s first acts as president was to partially roll back his predecessor Nicolas Sarkozy’s increase in the retirement age to 62. He allowed some workers who began working as teenagers to resume retiring at 60.

Hollande asked Prime Minister Jean-Marc Ayrault to present in June a 10-year investment plan, focusing on the digital economy, energy, health, and transport projects. He said he’d tap European Union funds, private companies, and overseas investors.

Merkel Compromise

During the press conference in the presence of his entire cabinet, which lasted more than 2 1/2 hours, Hollande touched on subjects ranging from family policy to Syria and his relationship with German Chancellor Angela Merkel.

German-French leadership of Europe demands compromise, he said.

“With Mrs. Merkel, we’ve always gotten there even if it took time,” he said. “Yes of course I would have preferred it to go faster” on easing austerity, he said, adding that “she’s aware Germans have made a lot of efforts and can’t be asked to pay for others.”

He said he’s ready to meet German calls for greater political union to match the tighter economic coordination that’s resulted from the euro crisis. On Britain, he said he wants the country to remain in the EU while warning that the group existed well before the U.K. joined in 1973 and that his priority is the euro area, of which Britain isn’t a member.

Hollande avoided a question about whether he had become a “social-democrat,” the term used in France for leftists who support the welfare state and robust free markets. “I am a Socialist, do I have to add social-democrat?” he said.

To contact the reporters on this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net; Mark Deen in Paris at markdeen@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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