Sunday

17th Feb 2019

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.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

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.

Sluggish procedure against Hungary back on table

EU probes into Hungary and Poland on rule of law and democracy are back on the agenda of EU affairs ministers - but with little guidance from the Romanian presidency, without a clear idea where the procedures are headed.

News in Brief

  1. Spain's Sanchez calls snap election on 28 April
  2. 15,000 Belgian school kids march against climate change
  3. May suffers fresh Brexit defeat in parliament
  4. Warning for British banks over Brexit staff relocation
  5. Former Italian PM wants Merkel for top EU post
  6. Antisemitic incidents up 10% in Germany
  7. Italy's asylum rejection rate at record high
  8. Hungary will not claim EU funds for fraudulent project

Opinion

Italy will keep blinking in 2019

Italy's 'marriage of convenience' coalition government likes picking battles with Brussels. But with the economy now in recession, and deputy prime minister Matteo Salvini needing to keep the business lobby on board, expect Rome to blink first.

Opinion

The test for Sweden's new government

While the formation of a new government ends Sweden's fourth-month paralysis, it doesn't resolve the challenge from radical-right populists in Sweden. A key question remains: will treating populists like pariahs undercut the appeal of their, often anti-rights, politics?

Stakeholders' Highlights

  1. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  2. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  3. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  4. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  5. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  6. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  7. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  8. Nordic Council of MinistersSeminar on disability and user involvement
  9. Nordic Council of MinistersInternational appetite for Nordic food policies
  10. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  11. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  12. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”

Latest News

  1. Sluggish procedure against Hungary back on table
  2. Could Finnish presidency fix labour-chain abuse?
  3. Brexit and trip to Egypt for Arab League This WEEK
  4. Belgian spy scandal puts EU and Nato at risk
  5. EU Parliament demands Saudi lobby transparency
  6. Saudi Arabia, but not Russia, on EU 'dirty money' list
  7. EU agrees draft copyright reform, riling tech giants
  8. Rutte warns EU to embrace 'Realpolitik' foreign policy

Join EUobserver

Support quality EU news

Join us