Socialism Takes Over France, Country Downgraded

on November 28 2012 5:19 AM
Hollande
If Parliament approves the budget when it comes up for review in September, France will have the world’s highest tax rate, beating current leader Aruba’s 58.95 percent top rate into second place. Reuters

Socialism Takes Over France, Country Downgraded, Investors Urged to Exercise Caution on any French Investment

Economist and Hedge Fund Manager Shayne Heffernan of www.livetradingnews.com has donwgraded his outlook on France as the new Socialist President Francois Hollande threatened Tuesday to nationalize a plant owned by steelmaker ArcelorMittal in an increasingly heated dispute in which ministers have said the multinational is no longer welcome in the country.

“this type of behavior has no place in modern society, and if France is to be run in this fashion then one must review the safety, security and future of any French investments, I would also question how ethical the support of the French Government would be given that the action appears to be racially charged.” Shayne Heffernan said in a note to traders today.

London’s mayor joked that revolutionaries had taken over Paris and told India’s investors Tuesday to look to the British capital instead, amid a row between the French government and India-born tycoon Lakshmi Mittal.

“I have no hesitation in saying here, ‘Venez à Londres, mes amis!’ (Come to London, my friends),” he told a meeting of business leaders in New Delhi.

“Come to the business capital of the world,” Johnson added.

The “sans-culottes,” meaning “without knee breeches,” were the most militant supporters of the French Revolution at the end of the 18th century.

Moments before talks steel tycoon Lakshmi Mittal, Holland said that nationalizing ArcelorMittal’s plant in northeastern France remained on the table.

“The nationalization is part of the subjects of the discussion,” Hollande said.

“I will meet in a few minutes with Mr. Mittal to see what answer he can give us in respect to this requirement for us to keep the site as it is today,” Hollande said.

The warning came as 40 lawmakers from Hollande’s Socialist party said they were in favor of temporarily nationalizing ArcelorMittal’s plant in Florange.

“Mittal does not respect our country,” a joint statement by the parliamentarians said, adding that his interests “were clearly not that of France, of its industrial fabric and its workers.”

Mittal, who ranks 21st on the Forbes list of the world’s richest people, is locked in a battle with France over the future of the Florange site in the traditional, but declining, heartland of the French steel industry in the eastern Lorraine region.

ArcelorMittal has said that two blast furnaces at Florange, which were damped down for 14 months prior to their full closure, were uncompetitive in a tough trading climate, partly because they are too far from ports for transportation.

The company gave the government two months, which expires on Saturday, to find a buyer for them. The government says it has two offers, but only for the entire Florange site including other facilities which ArcelorMittal wants to retain and keep operating.

ArcelorMittal has refused to sell the full operation and warned that nationalization of the Florange facilities would threaten the viability of all of its activities across France, where it employs 20,000 people.

Industrial Renewal Minister Arnaud Montebourg threatened to nationalize Florange and said ArcelorMittal was no longer welcome in France.

Montebourg, who is suggesting that the state nationalize Florange so as to pass the entire site on to a buyer, raised the stakes on Monday, saying France did not want ArcelorMittal in the country anymore and was looking for a partner to take over the group’s operations at the plant.

“We do not want Mittal in France any longer because they do not respect France,” Montebourg told the French financial daily Les Echos.

“Mittal’s lies since 2006 are damning.”

Speaking to AFP while visiting a factory near Orleans, Montebourg confirmed a nationalization was possible.

“A temporary public takeover is a perfectly reasonable option… because it costs nothing to the taxpayer and respects both French and European law,” he said.

Shayne HeffernanShayne Heffernan oversees the management of funds for institutions and high net worth individuals.Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service

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