DAVOS: French President Emmanuel Macron waxed lyrical in French and English at the Davos business summit to urge a redefining of the capitalist order, saying globalisation in its current form is in "crisis" and needs recalibrating to stave off populism.
Using both languages to insist that "France is back" and "at the heart of Europe" even as Britain leaves the EU, Macron made his main pitch in English to say liberal reforms were necessary to ensure his country adapts to globalisation.
But he balanced that out by switching to French to denounce excesses of fiscal and social dumping and urge a reset on how the world resolves such issues.
In a much-awaited speech less than nine months after his election, Macron's 20-minute discourse on Wednesday, chiefly in English, saw him unveil his vision on how to deliver reforms "to "make France more competitive" and "more flexible".
Macron arrived at Davos having managed to push through sensitive labour and tax reforms in France while he is also out to reshape the country's higher education system.
"In France, we correct inequalities with taxes and norms but without preventing them. This has weakened our competitiveness," said Macron, who has vowed to drive down the overall tax take for most households.
His address followed on from a "Choose France" charm offensive on Monday at the Versailles palace where the 40-year-old centrist bathed in the attention of 140 bosses from companies such as Facebook and Google, who announced major investments.
Switching back to his native tongue, Macron also noted globalisation "is going through a major crisis" with some states engaging in a free-for-all for their own benefit. What was needed, he insisted, were "coordinated strategies" across the board.
In terms of tax policy, "France was very misaligned compared with the rest of Europe as she was well above the European average", Macron said, pushing home his view that a high tax take means "talented people vote with their feet" and leave the country.
- Race to the bottom -
Macron said in the current climate the "dynamic" was one of cutting tax rates and paring back social spending which threatened creating a "race to the bottom".
Welfare benefits and the fiscal means to cover them, Macron said, "issues which stood at the heart of the state" but said in today's world "if you are looking for comparative advantage you are always pulled downwards" in terms of tax rates.
At the same time, he urged companies to "renounce all-out tax optimisation" strategies and called on nations to ensure that digital giants "pay taxes".
Without global cooperation on tax, Macron said, "we shall never convince the middle classes that globalisation is good for them."
- 'Unravel' -
Expanding his theme, Macron regretted the lack of fiscal harmonisation in the European Union with Ireland notably attracting foreign firms through ultra-competitive corporation tax.
"We must also end this tendency to unravel social rights in order to adjust to globalisation," said Macron, urging a minimum social security safety net for all.
In terms of corporation tax, France has the highest rate in the eurozone pending a cut from a current 33.3 percent to 25 percent from 2022. Most of its EU neighbours have already introduced more competitive rates.
Last Friday, Macron joined German Chancellor Angela Merkel in calling for the rate to be harmonised across the European Union.
Copyright AFP (Agence France-Press), 2018
Comments
Comments are closed for this article.