20th Mar 2018

France in turmoil over tax-dodging minister

  • Francois Hollande is struggling to put a lid on the scandal (Photo: Francois Hollande)

France's ongoing scandal over its tax-evading budget minister is threatening to engulf Francois Hollande's government, raising questions about who knew what and what it means for a President who came to power promising an "irreproachable republic."

Jerome Cahuzac, now resigned, dealt a body blow to the Socialist administration after admitting he lied to the president, to parliament and to the public about having an offshore account.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

It eventually turned out that Cahuzac, who had conducted a public campaign against tax dodgers, had foreign bank accounts for over 20 years.

A Singapore bank account of his still has €600,000 in it.

His revelation came after Hollande and several other ministers vouched for him when the investigative website Mediapart back in December revealed he had a secret bank account in Switzerland.

Cahuzac, a former plastic surgeon, spent months denying the accusations before admitting its existence on Tuesday in a blog.

Hollande, currently among the most unpopular presidents in recent French history after less than a year in office, made a taped TV appearance on Wednesday in which he condemned Cahuzac's conduct as "unforgiveable."

Trying to deflate the scandal, Hollande said that in future all government ministers and MP will have to declare their personal finances, and tax-evaders will not be able to hold public office.

But the turmoil is eroding the perception differential Hollande had hoped to build up in comparison with his predecessor Nicolas Sarkozy, known as the "bling bling" president and accused of unduly influencing billionaireness Liliane Bettencourt.

The Cahuzac affair is the culmination of an unhappy few months for Hollande.

His much-heralded tax on the super rich had to be temporarily shelved after being ruled unconstitutional.

He recently admitted that he will not be able to reduce the country's budget deficit as much as had been promised to his EU partners.

Meanwhile, the tax hikes and reforms to bring down the deficit sit uncomfortably with Cahuzac's revelations.

More broadly, France's economy is in a poor shape (it contracted by 0.3 percent at the end of 2012) and unemployment is at a 16-year high.

For its part, the French centre-right UMP opposition has been revelling in the government's difficulties. Its politicians have been asking when exactly Hollande's government new about Cahuzac.

"I find it hard to believe that they only learned the truth 48 hours ago, or else I guess we are being led by a big simpleton," UMP vice president Thierry Mariani said.

French newspapers, which have called the affair one of the "most spectacular scandals" of the fifth republic, are already wondering whether Hollande will have to reshuffle his government to give himself some breathing space.

But for Hollande, it appears that the difficult headlines are not yet over.

Le Monde newspaper on Thursday revealed that Jean-Jacques Augier, Hollande's ex-treasurer during his presidential campaign, is a shareholder in two off-shore companies in the Cayman Islands.

Augier told the newspaper that this is not "illegal," but the revelations and the general mistrust of mainstream French parties among the public have led analysts to wonder if extremist parties on the left and the right will be the ultimate beneficiaries of the current turmoil.

Hollande's millionaire tax struck down

French president Francois Hollande suffered a major political blow over the weekend when his flagship policy to heavily tax the very rich was struck down.

Hollande: '€30 billion must be found'

French Socialist President Francois Hollande has outlined a two-year plan to overhaul the country's stagnating economy and to boost employment.

French leader promises anti-tax-cheat crusade

French leader Hollande has promised to "eradicate" tax havens in the EU and in the wider world, after his approval rating fell to 26 percent following a tax scandal.


Selmayr case symptomatic, says EU novel author

The controversy over the new EU Commission top civil servant is revealing of what is wrong with EU institutions and how they are blocked by national governments, says award-winning Austrian novelist Robert Menasse.


The populists may have won, but Italy won't leave the euro

The situation as Rome tries to form a government is turbulent and unpredictable. However, the most extreme eurosceptic policies floated during the election campaign are unlikely to happen - not least due to the precarious state of the Italian banks.


Why has central Europe turned so eurosceptic?

Faced with poorer infrastructure, dual food standards and what can seem like hectoring from western Europe it is not surprising some central and eastern European member states are rebelling.

Stakeholders' Highlights

  1. EUobserverHiring - Sales Associate With 2+ Years Experience - Apply Now!
  2. EUobserverHiring - Finance Officer With Accounting Degree or Experience - Apply Now!
  3. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  4. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  5. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  6. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  7. Martens CentreEuropean Defence Union: Time to Aim High?
  8. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  9. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  10. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  11. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  12. EPSUWill the Circular Economy be an Economy With no Workers?