Sarkozy proposes bonus scheme even employees aren't impressed by

The diminutive President's latest ploy to get voters on-side doesn't seem to have fooled anyone...

by Emma Haslett
Last Updated: 06 Nov 2012
Baffling news from our friends across the channel, where Nicolas Sarkozy has made an unprecedented attempt at making friends with the little people. The diminutive President has said he’s planning to push ahead with proposals to force employers who want to raise dividends to pay their employees a €1,000 bonus. Details are sketchy, but Sarkozy says the payouts could be balanced by tax incentives for small businesses, and that it’s all in the spirit of ‘sharing value-creation [which] I hold dearly’. Hmm. Is that an impending election we can smell?

So far, the plans haven’t raised much in the way of support. Although France already has rules in place for profit-sharing for companies with more than 50 employees, employers are, naturally, concerned about the cost to them. What’s more worrying for Sarkozy, though, is the reaction from those who would ordinarily be behind it. French finance minister Christine Lagarde, for example, who has already said she opposes the plans. And trade unions – ie. the very people the proposals were supposed to please – which said that any wage rises need to be ‘sustainable’, ‘not measures that will exclude workers who happen to be working for companies that don’t make a profit’.

With an election due to take place next year, Sarkozy and his centre-right government are under pressure to do something about household incomes, which have been hit badly by high inflation and petrol prices, staying largely stagnant since the beginning of the recession. And after the riots sparked by the government’s decision to push the retirement age up from 60 to 62, Sarkozy needed to do something to regain the respect of his voters, fast.

Nevertheless, this seems like a pretty short-sighted way of going about it. That said, the proposals are still in their very early stages – so perhaps everything will turn out to be tres bien in the end.

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