Tuesday

22nd Jun 2021

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

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe 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.

News in Brief

  1. UEFA: No rainbow 'pride' stadium illumination at Hungary match
  2. Italian PM calls to move Euro 2020 final from London to Rome
  3. UN warns of 'cascade of human rights setbacks'
  4. Minister urges Belgians to ignore speculation over dead soldier
  5. Swedish government toppled in no-confidence vote
  6. EU takes aim at British TV and film perks
  7. Iran nuclear deal: President-elect Raisi issues warning over talks
  8. EU agriculture spending 'failed' to reduce farming emissions

EU adds new 'dark red' zone to travel-restrictions map

The European Commission has proposed additional measures to limit non-essential travel within and to the European Union - amid fears over more transmissible mutations triggering a new surge in cases across the bloc.

Stakeholders' Highlights

  1. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  2. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals
  3. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  4. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  5. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  6. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance

Latest News

  1. Latest EU sanctions to bite Belarus dictator's income
  2. Libyan detention centres must end, EU says
  3. Poland and Hungary sanctions procedure back after pandemic
  4. Sánchez risks 'betrayal' call with pardon for jailed Catalans
  5. EU a 'Wild West' for China's unsafe toys, gadgets and clothes
  6. 'You'll never walk alone' - our message to women
  7. Too soon to lift EU sanctions on Burundi, NGOs warn
  8. EU to wage economic war on Belarus dictator

Join EUobserver

Support quality EU news

Join us