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FINANCE

Critic with ‘Anglo-Saxon CV’ joins Hollande’s team

When Hollande decided to ditch his chief economic advisor this week, many on the French left probably felt relieved. Until that is, they heard who the replacement was – Laurence Boone, the former Bank of America chief economist with a very "Anglo-Saxon CV”.

Critic with 'Anglo-Saxon CV' joins Hollande's team
Laurence Boone, the outspoken critic of the Socialist government who has been appointed the president'"s top economic advisor.

Who is Laurence Boone?

She is a 45-year-old economist, who has built a hugely successful career in the world of finance and who French president François Hollande has just appointed as his chief economic advisor.

Why is that such big news?

Mainly because of Boone’s background. She was a managing director at Barclays Capital France before landing the job as Bank of America Merrill Lynch’s chief economist for Europe, where she was split between London and Paris. She is also on the board of the French luxury group Kering. The fact she comes from the world of business has been jumped on by the French press, who have been happily reminding their readers that Hollande once declared war on the world of finance. Not only that, but Boone herself has been an outspoken critic of Hollande and his efforts since 2012 to rescue the beleaguered French economy.

What’s she been saying about Hollande?

Well Boone used to write regularly for the liberal-minded French economic magazine L’Opinion. In one comment piece titled “Stop the Massacre” she slammed the government for its “total absence of economic policy”. In the piece she went on to say “Without a credible economic strategy, France in three-years’ time will have three million unemployed, three or four percent deficit, a debt equal to 100 percent of its GDP, and university graduates who can't wait to flee abroad.” She has also gone on record to say that the government “lacks credibility” among the financial markets when it comes to implementing reforms.

Boone, 45, has also pressed for closer European integration – including EU-wide budgets, commercial taxes and unemployment insurance – while calling for countries that mismanage their finances to be punished with bankruptcy.

So what’s Hollande playing at?

Well we all know Hollande’s approval ratings have taken a tumble since, well, his first day in office, and he is under immense pressure to rescue a French economy mired in debt, with record unemployment. By plumping for Boone he is hoping he has found someone who can help show him the way and somehow save his floundering presidency. Although it’s worth noting that an opinion poll in May found only 11 percent of voters thought he would make a good candidate for re-election in 2017.

So how have ardent socialists greeted Boone’s appointment?

It’s fair to say it’s gone down like a lead baguette. Those on the left of the party, who have been calling for Hollande to end austerity and stop pandering to the demands of businesses are naturally the most aggrieved. “She’s worked in several big banks, that’s not a good sign,” said Socialist Party MP Laurent Baumel. “The President seems to want to persist in a policy that meets the agenda of the financial community.” Another said Boone had “all the attributes of a liberal thinker” and another socialist simply said her CV “wasn’t great”. That CV described by one French media outlet, simply as “Anglo-Saxon” also included a stint as an economist at the Paris based global think tank the OECD.

Are they right to be worried?

Not according to one France based economist we spoke to. “This doesn’t signify a change of policy for me. This is just following the same social democratic line Hollande has taken from the beginning,” the economist said. 

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FINANCE

France unveils big-spending budget to tackle Covid-shock and pledges no new taxes

France launched a free-spending budget plan on Monday, saying a fresh spike in new Covid-19 cases justified its unprecedented loosening of the purse strings.

France unveils big-spending budget to tackle Covid-shock and pledges no new taxes
French finance minister Bruno Le Maire. Photo: AFP

After €460 billion of emergency spending this year to save the economy from the virus fallout, the government built its 2021 budget plan around a €100-billion “recovery plan”, first announced this month and partly funded by EU money.

The budget came after France's health services on Saturday reported 14,412 new virus cases over the previous 24 hours – only slightly lower than the record 16,000 registered on both Thursday and Friday.

READ ALSO IN NUMBERS Covid-19 cases, hospitalisations and deaths in France

 

The fresh spike threatens to overwhelm hospitals, health officials warned, while the government imposed fresh curbs to limit the spread of the virus, including on restaurants, bars and sports facilities.

“There is no reason to give up the idea of a recovery just because the health difficulties have re-emerged,” Finance Minister Bruno Le Maire told a news conference.

The spending boost is to help the French economy to rebound strongly next year, by eight percent according to the budget, after crashing by an expected 10 percent this year, Le Maire said.

“We are implementing this recovery fund so it can be used up quickly and have the greatest possible impact on growth,” he said.

But the growth forecast immediately drew criticism from France's high council for public finance, a state body charged with making sure that government budgetary assumptions are realistic.

The growth target was “pro-active”, given the “great uncertainties” weighing on the economic outlook because of the coronavirus, the council said.

It also called on the government to be mindful of public debt which has ballooned since the start of the crisis.

France's annual deficit is estimated at 10.2 percent of GDP this year, and is to come in at 6.7 percent in 2021, the government said.

This compares with a permitted ceiling of three percent for eurozone countries, which the EU has however lifted temporarily as governments grapple with the crisis.

The government has promised that it will not raise taxes to pay for the recovery.

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