French President Nicolas Sarkozy's government yesterday announced details of a $15 billion master plan to "shock" the economy back to life, the first part of his ambitious economic and social reform drive...The eight-chapter tax and finance bill seeks to exempt overtime work from taxation; make mortgage interest payments tax deductible; all but eliminate inheritance tax; and put a 50-percent cap on overall individual taxation....France to Shock Economy, Rory Mulholland, The Washington Times, June 8, 2007
Shades of 1981! After decades of a sluggish, high-employment, welfare state economy, the new President, with a hefty margin in the French parliament, is going straight at the heart of the French problem. There are familiar statements by naysayers, familiar, that is, if you remember 1981.
But that strategy, which the economy ministry said would cost up to $15 billion worries the European Union, which wants France to rein in its huge public deficit...(France to Shock, continued...)
Yep, just like the Democrats said in 1981, and in 2001, confronted with an attack on the funding sources for their welfare programs. With that big majority, will President Sarkozy be able to restrain spending, what neither Reagan nor Bush 2 were able to do? If he does, France will not only have an enlivened economy but a balanced budget. In a country where tax evasion is a high art, that would be a shocker. But the greater shock is yet to come.
That's when President Sarkozy attempts to match the Iron Maiden, former Prime Minister Thatcher, in privatizing the huge public sector in France. Watch out for that one. That could revolutionize not only France but the entire EU.
Luther
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