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2022 FRENCH PRESIDENTIAL ELECTION

What is the ‘Affaire McKinsey’ and could it derail Macron’s re-election campaign?

An Anglo-sounding name keeps popping in French Presidential election discussions. But why? And could it really be a problem for the Macron campaign?

A pedestrian walks past a campaign poster of France's President and La Republique en Marche (LREM) party candidate Emmanuel Macron in Paris
(Photo: Emmanuel Dunand / AFP)

Who is this McKinsey, anyway?

Not who, what. McKinsey – or, more accurately, McKinsey and Company – is a US-based international management consulting firm, in the Capgemini, Deloitte or KPMG strata of international management consulting firms. 

It provides advice on strategic management to governments – including France – corporations, and other organisations.

Why is it suddenly making headlines?

It’s a slow-burn thing. A Senate report published in mid-March criticised the French government’s management consultant addiction.

 “The use of consultants is now a reflex”, the report said, adding that the influence of consultancy firms in government puts them, “at the heart of public policy”.

They sound expensive

In 2021, the consulting expenses of Jean Castex’s government was €893.9 million, compared to €379.1 million in 2018, the report said.

McKinsey was paid €3.88 million for consulting on housing benefit reform in France at the start of Emmanuel Macron’s presidency, and a further €12.33 million on the Covid-19 vaccine scheme. 

Earlier this year, it won a €496,800 contract, paid for by the Ministry of Education, to produce a 200-page document for an international symposium that was cancelled because of the health crisis.

And it was paid €950,000 for a Powerpoint presentation and a 50-page booklet on pension reform – which has since been shelved. “It’s expensive per page,” Senator Eliane Assassi told Franceinfo at the time of publication of the report.

This sounds pretty standard for governments – is there more?

The report also says this: “The McKinsey firm is subject to corporate income tax in France, but its payments are established at zero euros for at least 10 years, while its turnover on the national territory reaches €329 million in 2020, including about 5 percent in the public sector, and it employs about 600 employees.”

It went on to describe this as a, “caricatural example of tax optimisation”. 

Ah…

You can imagine the political campaign capital Macron’s opponents are trying to make out of this. 

Do tell

Valérie Pécresse, candidate for the centre-right Les Républicains, said: “Emmanuel Macron must explain himself on the massive recourse of the State to the McKinsey company”.

Green candidate Yannick Jadot said that, under his presidency, the government would no longer use these firms, “which, at a cost of hundreds of millions of euros per year, have thought, on behalf of governments, the elimination of hospital beds, the reduction of housing benefit and other brutal reforms”.

Far-right candidate Marine Le Pen’s party denounced it as a “state scandal”.

And far-leftist Jean-Luc Mélenchon added: “That’s enough of private firms like McKinsey that give useless advice and do not pay taxes in France.”

To cap it all, the Senate – which historically leans right – announced on Friday March 25th that it had referred the matter to the courts for “suspicion of perjury” – three months after a hearing in which an executive of a French subsidiary of McKinsey had assured the firm that it did pay corporate income tax in France.

What does McKinsey say about this?

It issued a statement saying that it respects “all applicable French tax and social rules” and says that it has paid corporate income tax “in the years when the firm has made profits in France”. 

The statement went on to say that the firm had paid, “€422 million in taxes and social charges, or nearly 20 percent of its cumulative turnover,” in respect of its employees in France.

Corporation tax, however, is based on profits rather than turnover.

And Macron – has he said anything?

The controversy has come at an awkward time, in an election campaign he’s only partially fighting because he’s busy dealing with Ukraine. 

But he’s in fighting mood when he’s on the hustings. “No contract is passed in the Republic without respecting the rule of public procurement,” he told France 3’s Dimanche en politique. “Let anyone who has proof that there is manipulation challenge the contract in criminal court.”

Meanwhile, his supporters have been out in force: “Consulting firms must be solicited as long as it is for skills that are not found within the state,” government spokesman Gabriel Attal told BFMTV. 

Health Minister Olivier Véran told a recent hearing before the Senate that “at no time did McKinsey make me take a decision in connection with the health crisis or the vaccine campaign”. 

And one unnamed ally said Macron’s opponents were trying to make a scandal out of a molehill – referencing a political controversy that contributed to the failure of Valéry Giscard d’Estaing to win re-election in 1981, when it emerged he had accepted precious stones from Central African dictator Jean-Bedel Bokassa.

“They (the opposition) are trying to make it into the Bokassa diamond scandal for the president. It’s not a real issue. Everyone uses consultancies.”

But Economy Minister Bruno Le Maire has acknowledged that “activities will have to be refocused if recourse to consulting firms is excessive and services go too far”.

So, is anything happening?

We’ll find out exactly on Wednesday night, when Amélie de Montchalin and Olivier Dussopt, respectively Minister of Transformation and Public Accounts, will hold a press conference on the subject.

“We do not deny any figures, we deny the way in which they are interpreted,” a Ministerial source told Huffpost. “We did everything transparently and that is precisely the purpose of this press conference. We will answer all questions.” 

Will it upset the Macron campaign?

It hasn’t helped. And it’s possible to wonder that there may be some concern, especially with Le Pen apparently gaining momentum in the polls. One recent survey set showing her at 47 percent versus 53 percent in a hypothetical run-off sounded alarm bells in Macron’s camp.

We do know the press conference was originally scheduled for Thursday morning, but has been brought forward 14 hours…

But commentators seem certain it won’t affect the campaign much. “It’s a complicated issue that will sway those who were already convinced that Macron is a ‘president of the rich’, but it’s not a widespread issue,” political analyst Philippe Moreau Chevrolet told AFP.

“It counts much less than questions around household income and spiralling inflation and even fears about food supplies.” 

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POLICE

France proposes getting rid of penalties for ‘minor’ speeding offences

The French government is considering changing speeding laws so that drivers will not lose points on their licence if they are caught going just a few kilometres over the speed limit.

France proposes getting rid of penalties for 'minor' speeding offences

France’s Interior Ministry is considering changing its current rules for minor speeding violations – proposing getting rid of the penalty for drivers who only violate the rule by going just a few kilometres over the speed limit.

The Ministry has not laid out a timeline for when this could come into effect, but they said they are currently in the preliminary stages of studying how the change could be carried out.

“The fine of course remains,” said the Interior Ministry to French daily Le Parisien.

That is to say you can still be fined for going five kilometres over the speed limit, but there might not be any more lost points for driving a couple kilometres over the posted limit. 

READ ALSO These are the offences that can cost you points on your driving licence

Of the 13 million speeding tickets issued each year in France, 58 percent are for speeding violations of less than 5 km per hour over the limit, with many coming from automated radar machines.

How does the current rule work?

The rule itself is already a bit flexible, depending on where the speeding violation occurs.

If the violation happens in an urban area or low-speed zone (under 50 km per hour limit), then it is considered a 4th class offence, which involves a fixed fine of €135. Drivers can also lose a point on their licences as a penalty for this offence. 

Whereas, on highways and high-speed roads, the consequences of speeding by 5 km per hour are less severe. The offence is only considered 3rd class, which means the fixed fine is €68. There is still the possibility of losing a point on your licence, however. 

How do people feel about this?

Pierre Chasseray, a representative from the organisation “40 Millions d’Automobilistes,” thinks the government should do away with all penalties for minor speeding offences, including fines. He told French daily Le Parisien that this is only a “first step.”

Meanwhile, others are concerned that the move to get rid of points-deductions could end up encouraging people to speed, as they’ll think there is no longer any consequence.

To avoid being accused of carelessness, France’s Interior Ministry is also promising to become “firmer” with regards to people who use other people’s licences in order to get out of losing points – say by sending their spouse’s or grandmother’s instead of their own after being caught speeding. The Interior Ministry plans to digitalise license and registration in an effort to combat this. 

Ultimately, if you are worried about running out of points on your licence, there are still ways to recover them.

You can recover your points after six months of driving without committing any other offences, and there are also awareness training courses that allow you to gain your points back. It should be noted, however, that these trainings typically cost between €150 and €250, and they do not allow you to regain more than four points.

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