Francois Hollande

PARIS — French President Francois Hollande is considering pushing for a new tax that would see search engines pay each time they use content from French media. Hollande discussed the topic with Eric Schmidt, executive chairman of Google, during a meeting in Paris Monday.

Hollande says the rapid expansion of the digital economy means that tax laws need to be updated to reward French media content.

Google has opposed the plan and threatened to bar French websites from its search results if the tax is imposed.

Germany is considering a similar law, and Italian editors have also indicated they would favor such a plan.

PARIS — President Nicolas Sarkozy is the underdog, and he knows it. Not a single poll has predicted he will win re-election on Sunday, and leading figures in his government are already lining up new jobs.

In televised interviews, Sarkozy’s on the defensive and paints himself as a victim. At campaign rallies, he’s boxer-like, punching the air, torso soaked with sweat within minutes of taking the podium. He relishes the combat, but after he leaves the stage, his face drains of color, his features lined with fatigue.

The dynamic French leader made his mark on the world arena but let down voters at home, and may well be out of a job within days.

Always the fighter, Sarkozy could confound pollsters and pull off a victory. At a sunny Paris rally in front of the Eiffel Tower on Tuesday, he looked more like the triumphant Sarkozy of the 2007 campaign.

But his challenger in Sunday’s runoff vote, Socialist Francois Hollande, is sounding increasingly confident, and his campaign rallies already feel like victory parties.

Even as the field of challengers has shifted throughout the campaign, Sarkozy has never climbed above second place in the polls.

In a surprising admission for the 57-year-old career politician, Sarkozy has acknowledged that he’s thinking about possible defeat and says he would quit politics if he loses.

“I will fight with all my strength to win your confidence, to protect and lead you and build a strong France, but if that is not your choice I will bow out. That’s the way it is, and I will have had a great life in politics,” Sarkozy said on RMC radio. “I’ll do something else. I don’t know what.”

It’s not over yet. Sarkozy scored 27 percent of the vote in the first round of presidential elections April 22, to Hollande’s 28 percent. Sarkozy may pick up more support from voters who handed far right candidate Marine Le Pen a surprisingly strong third place. And Sarkozy may get a last-minute boost from the final televised debate of the campaign on Wednesday night. Sarkozy has a sharp tongue and strong verbal sparring skills, while the jovial Hollande has been flustered in some recent appearances.

But millions of French voters are determined to prevent Sarkozy from winning a second term, and polls predict Hollande could win by as much as a 12-percent margin.

Sarkozy came into office in 2007 promising dramatic changes to France to better compete with emerging economies like China. After an initial wave of labor reforms, Sarkozy’s presidency was hit with the world financial meltdown, Europe’s debt crisis and France’s worst recession since World War II.

His momentum appeared to fizzle, and he became seen as too friendly with CEOs while France faces near-10 percent unemployment and sluggish economic prospects.

“Without workers, there would be no bosses,” said Christine Delorme, a 57-year-old factory worker marching Tuesday at a leftist May Day rally in Toulouse, one of many union-led marches around France. “I’m here to say no to Sarkozy, the president of the rich. We don’t want that anymore.”

Sarkozy entered this presidential campaign on the back foot, and met obstacle after obstacle.

Reports surfaced that Libya’s Gadhafi regime offered to finance Sarkozy’s 2007 campaign. Critics compared Sarkozy to France’s Nazi occupiers. Former International Monetary Fund chief Dominique Strauss-Kahn suggested his political career was destroyed by Sarkozy’s cronies.

Sarkozy enjoyed a boost after his confident handling of the manhunt for a gunman who killed Jewish schoolchildren and paratroopers in March.

But he spent much of his campaign time denying, dismissing or denouncing criticism lobbed his way. He says the media is lined up against him and regularly accuses his critics of lying.

“What’s troubling in all this is the evasion, it’s the hypocrisy, it’s the lies,” he said, again, Monday.

His campaign team and aides officially refuse to talk about a plan B. But two of his aides have taken new jobs in recent weeks, along with three senior figures in leading government ministries. Some are staying in public service in less political roles, others are taking research or academic jobs.

Satirical puppet show “Les Guignols de l’info” has already made its election prediction: Its episode on Sunday showed first lady Carla Bruni-Sarkozy, an Italian heiress and former supermodel, packing a suitcase for Switzerland, to avoid the 75-percent tax on very high incomes that Hollande has promised to impose.

Printed on Wednesday, May 2, 2012 as: French presidential race has socialist ahead by 12 percent

BRUSSELS — For more than a year, European Union officials have called for austerity, austerity and more austerity as a means to solve Europe’s debt crisis. Now people who don’t want to pay the price are taking their fight from the streets to the ballot box.

Governments have fallen, more are at risk and in some places, a stark streak of nationalism is on the rise that could swing Europe ever deeper into a fortress mentality.

At stake is the future of the continent, where countries rich and poor are struggling with mountains of debt and moribund economies — a toxic combination that often seems to require contradictory remedies of belt-tightening and economic stimulus.

Increasingly, the long focus on austerity is convincing Europeans that the German-led mantra of fiscal responsibility is creating a vicious circle of more misery leading to lower growth — leading to even greater debt distress.

“What is happening in Europe is the austerity drive is actually slowing down the necessary rebalancing of European economies,” said Simon Tilford, chief economist at the Center for European Reform.

Austerity measures aimed at balancing national budgets have led to drastic spending cuts by governments across the continent, including layoffs and pay cuts for government workers, slashing of key services including welfare and development programs, as well as tax hikes to boost government revenues.

Many in Europe have had enough of this harsh medicine.

In France, President Nicolas Sarkozy, one of the architects of the EU’s response to the financial crisis, is in danger of being turned out of office in next month’s runoff with Francois Hollande — a Socialist who is promising not to cut, but to increase public spending by €20 billion by 2017.

Hollande is also promising to re-negotiate a much-vaunted budgetary pact among 25 EU countries meant to enforce national fiscal discipline.

Greece votes in elections next month in which fringe parties hostile to international bailouts requiring steep austerity are expected to make big gains — possibly endangering efforts by the current technocratic government to rein in the nation’s debt.

And the Netherlands’ 18-month-old conservative coalition resigned this week after it failed to agree on cutting its own budget deficit to meet the EU limits it had demanded so fiercely of other countries.

Beyond that, in the Czech Republic, almost 100,000 people rallied in Prague’s downtown Wenceslas Square last weekend to protest government reforms and cuts, calling on the government to resign in one of the biggest demonstrations since the fall of communism. And earlier this year, tens of thousands of Romanians bitter about savage public-sector wage cuts took to the streets and the government collapsed.

Analysts say it’s no surprise that people are fed up.

“I don’t think there are any examples of countries accepting endless austerity and downward standards of living,” Tilford said. “There has to be light at the of the tunnel.”

Voters may have good reasons to reject unrelenting cuts. But in their desire to avoid pain, they may also be prompting politicians to put off decisions that Europe must take to remain competitive globally.

Many experts say government protections for workers need to be loosened — for example, by making it easier for employers to hire and fire workers — in order to halt the flight of jobs from Europe to regions deemed more business-friendly.

And the anger appears to be driving voters to the extremes. In the first round of the French presidential election last weekend, nearly one voter in five cast their ballot for the National Front, a hard-right party previously known primarily for its anti-immigraton platform.

That, along with the 11 percent showing by far-left candidate Jean-Luc Melenchon, shows a high level of anger, said Piotr Kaczynski, a research fellow at the Brussels-based Center for European Studies.

“The big winners of the French elections are the extreme parties — extreme right and extreme left,” which together won more than 30 percent of the vote, Kaczynski said.

The rise of the fringes is not limited to France. In Greece, the neo-Nazi Golden Dawn party is marching ahead in the polls — and may win a dozen or so seats in parliament. And it was a right-wing politician stridently critical of Islam who brought down the government of Dutch Prime Minister Mark Rutte this week. Geert Wilders, whose support was critical to Rutte’s minority government, decided to withdraw his support over the government’s budget-cutting plans.

“With the Rutte government’s resignation, the pro-cyclical austerity course in Europe has once again proven to be the biggest disposal program for governments in recent history,” Germany’s Financial Times Deutschland commented in an editorial Tuesday.

German Finance Minister Wolfgang Schaeuble criticized Wilders’ actions in acid tones.

“We have always known that, if one votes for radical right-wing euro-skeptic parties and xenophobes, one makes democracy not more stable but more unstable,” Schaeuble said. “That can be seen now in Holland. So my advice is, don’t vote that way.”

But as Europe evolves, the Germans may wind up the big losers. They have been the most insistent on enforcing austerity, warning of the “moral hazard” of helping out countries that have not endured sufficient pain as a result of past lapses in discipline.

Now, it is possible that the future of Europe may lie with politicians like Hollande, who is favored to defeat Sarkozy in the presidential runoff. Hollande has promised to increase taxes on the rich, create 60,000 new teaching jobs and subsidize 150,000 jobs for young people.

On Tuesday, German Chancellor Angela Merkel was still staunchly defending her insistence on austerity.

“I want to say clearly, it is not the case that we say saving solves every problem but, if you at home talk about how you want to shape your life tolerably, then one of the first conditions is that you somehow get by with what you earn,” she said.

Still, at least some economists are now calling for a return to priming the pump — even at the cost of higher deficits.

“There can be no fiscal sustainability across Europe as a whole without a return to economic growth,” Tilford said.

Printed on Wednesday, April 25, 2012 as: Europeans tired of austerity are voting for extremists

NANTERRE, France — She calls herself the anti-system candidate who will ensure social justice for the have-nots and purify a France losing its voice to Europe and threatened by massive immigration and
rampant Islamization.

The message of far-right presidential candidate Marine Le Pen has seduced thousands, kept her consistently in third place in polls and scared President Nicolas Sarkozy as he seeks a second term.

The conservative Sarkozy is trying to woo those who would vote for Le Pen in Sunday’s first round of balloting to bridge the gap with frontrunner Francois Hollande, a Socialist whom all polls show will win the May 6 election.

In an interview Wednesday on BFM-TV, Sarkozy named her directly, asking, “The vote for Marine Le Pen serves whom? Francois Hollande.”

Le Pen, putting the accent on patriotism, deplores what she says is France’s loss of sovereignty to the European Union and to globalization, the nation’s perceived loss of identity and what she claims are real dangers hidden within France’s Muslim community, is the largest in western Europe.

Le Pen wants France, and other euro zone nations, to give up the euro currency. She wants to drastically reduce the number of immigrants — to 10,000 a year — and, a top theme, to crack down for good on what she claims is the growing footprint of Islamic fundamentalists in France.

The image Marine Le Pen projects is less linked to the extreme-right than that of her father, said Nonna Meyer, an expert on the extreme-right vote at the prestigious university Sciences Politiques.

Meyer said that it is impossible at this point to predict how Le Pen will fare in Sunday’s balloting because there are too many unknowns, including the level of voter turnout.

“I think there really is no chance that Marine Le Pen will be in the second round,” she added.

French incumbent President and Union for a Popular Movement (UMP) candidate for the French 2012 presidential elections Nicolas Sarkozy arrives on stage to give a speech during a campaign meeting in Nancy, eastern France, Monday, April 2, 2012.

Photo Credit: The Associated Press

PARIS — French presidential candidate Francois Hollande, leading in polls but lacking in ideas that stick in voters’ minds, finally dropped a bombshell: As president, he would levy a 75 percent tax on anyone who makes more than
€1 million ($1.33 million) a year.

The flashy idea from the normally bland Socialist proved wildly popular, fanning hostility toward executive salaries and forcing President Nicolas Sarkozy to defend his ostentatious friendships with the rich. It also unleashed debate in the French press about whether the wealthy would decamp for gentler tax pastures.

As much as France likes the plan, it does not seem to have assured Hollande’s victory, which, just three weeks before the first round of voting, is growing more uncertain as Sarkozy reaps the benefits of projecting presidential mettle following France’s shooting attacks.

Polls put the two men neck-and-neck in the first round April 22, and show Sarkozy gaining on Hollande for the decisive runoff May 6.

Centrist candidate Francois Bayrou has dismissed the plan as absurd — contending that when all was added up, the top bracket would be taxed at nearly 100 percent. Many economists are also scratching their heads over the tax — seeing it as dangerous at worst and ineffective at best — and even Hollande admits it’s not meant to balance the budget.

The “Fouquet’s tax” — so named by some in the press after the tony restaurant where Sarkozy celebrated his 2007 presidential win — is riding and in part fueling a resurgence of the French left. The tax-the-rich proposal has garnered as much as 65 percent approval in some polls.All that has helped Hollande, often perceived as amiable but uninspiring, to distinguish himself from his main opponent, said Jean-Daniel Levy, a pollster and political analyst.

“Nicolas Sarkozy has a double difficulty: On the one hand, he is perceived as a president who is close to the rich, which is not a good sign in France. And he is also seen as a president who oversaw inegalitarian policies,” he said. The tax, he added, “allows Francois Hollande to take control again and to paint a negative portrait of Nicolas Sarkozy.”

But there is a danger that Hollande hit the nerve too well.

Many voters have swept right past Hollande and into the camp of far-left candidate Jean-Luc Melenchon, who has electrified voters with calls for a new French revolution and who some polls say will come in third or fourth in the first round of elections. That could bleed support away from Hollande in the first round, depriving him of crucial momentum going into the second one.Antipathy for the rich is widespread in France, where wealth is meant to be discreet and climbing the social ladder to build yourself a mansion isn’t a common narrative.

Hollande himself once famously declared “I do not like the rich” — a statement that only boosted his political standing among those who think wealth should be redistributed instead of accumulated.

Following his 75-percent tax announcement, front pages treated the rich like some strange, migrating species, declaring that they would decamp to Belgium if the tax was put in place. One presidential candidate, Dominique de Villepin, himself quite wealthy, warned France not to “kill the goose that lays the golden eggs.”

While there is some anecdotal evidence to suggest the wealthy are eyeing the border, tax lawyer Sandra Hazan said there’s nothing new in rich people fleeing France. But they don’t pull up the stakes simply because taxes are high.

“The problem is not the level of taxation you suffer,” said Hazan, who heads the tax department at law firm Salans. “The problem is when you cannot anticipate how much you will be paying.”

The French tax code has long been unpredictable, she said, but it has become even more so in recent months. As Sarkozy’s administration has tried to keep a series of budget targets that are central to his credibility and reassure markets that France can manage its debt, the number of changes to tax law have come fast and furious.

When he put taxes at the center of his campaign, Hollande unleashed a new flood of tax proposals, creating more uncertainty. Sarkozy, too, has vowed to hunt down French people who have fled the country purely to escape high taxes and make them pay the difference between what they’re paying in their haven and what they would have to pay in France.

In all the discussion about how much the rich make and how much they should pay, Sarkozy has also been put on the spot — again — about a lavish party to celebrate his presidential victory at Fouquet’s and a vacation on a friend’s yacht he took shortly after. These moves quickly earned him the moniker “President Bling Bling,” and he has struggled ever since to shed the image of a man too comfortable with money.

Five years after the victory party and the yacht trip, Sarkozy is still fielding questions about them. He most recently defended the vacation in an interview not long after Hollande’s proposal when he called it a last-ditch attempt to save his marriage to Cecilia, whom he divorced not long after taking office.

But Hollande has struggled to harness this momentum.

Hollande bungled the announcement of his new tax, initially saying it would apply to those bringing in more than €1 million — about $1.33 million — a month, before clarifying he meant a year.

He has also failed to provide a coherent narrative for why the tax is needed. He started out by saying that, in tough times, the rich had to pay their fair share, before later conceding it would only bring in about €100 million to €300 million each year. France’s public debt is €1.7 trillion ($2.3 trillion).

Then he said it would put pressure on companies to lower ballooning salaries, noting that that executive pay for France’s 40 largest public companies — the ones that make up its CAC-40 stock index — rose 34 percent in 2010, while most of Europe was fighting for its very existence.

In the end, Hollande has settled on casting the tax as simply the right thing to do.

“It’s not a question of return,” he told RTL radio station. “It’s a question of morality.”