Sarkozy attacks bonuses, defends crisis management

25th March 2009, Comments 0 comments

Companies who receive state aid or are about to lay off people should not be allowed to hand out golden parachutes, bonuses or distribute free shares or stock-options, says French President Nicolas Sarkozy.

PARIS – President Nicolas Sarkozy lashed out at executive bonuses Tuesday in a speech defending his handling of the economic crisis, just days after a million French took to the streets to contest it.

"There should be no more golden parachutes, there should be no more bonuses, distribution of free shares or stock-options in a firm that receives state aid or which is about to lay off people," he said.

The remark came after the French government vowed to oppose a golden parachute for the departing boss of troubled auto parts supplier Valeo.

Receiving a large pay-off if your company is failing, as is Valeo which has announced 1,600 layoffs in France, is "not responsible, it is not honest", Sarkozy said in a speech in Saint-Quentin, north of Paris.

Valeo's chairman and chief executive Thierry Morin, whose departure was announced Monday, is to get a EUR 3.2 million severance payment despite allowing the firm to sink deep into the red.

Sarkozy insisted that so far his approach to the crisis, which centres on a EUR 26 billion industrial stimulus plan that was followed up by a package of benefits and tax cuts worth EUR 2.6 billion, has been the right one.

"We had to act. We acted.... Was it enough? If the situation gets worse, we will do more," he said.

"Common sense, sang froid tell us to wait until everything that was decided is carried out, that we give all these measures time to produce their effect," he said in the speech in a sports centre.

He said that "before the summer" he would evaluate the results of the measures he has taken.

Sarkozy had ruled out new social spending last Friday after anger at the economic crisis drew a million striking workers onto the streets the day before to demand a boost to low wages and better job protection.

His government has sought to deflect public anger by threatening a law to cap executive pay and bonuses at companies that lay off staff or receive taxpayers' money.

The president's attack on bonuses drew the loudest applause of the hour-long speech in Saint-Quentin.

Sarkozy also said he was in favour of a carbon tax on imports from countries which had lower environmental standards than France.

"I would see only advantages in a carbon tax that would enable imports to participate in our social protection," he said.

"There are countries which respect none of the environmental rules that we impose on our companies. Well, these companies will pay at that moment, within the framework of the tax that we will have," he said.

France is less badly hit than many of its European neighbours by the economic storm, but public anger is mounting as the country feels the bite of a recession set to last well into next year.

Many fear for their jobs, with two million already unemployed and 350,000 more layoffs expected this year.

AFP / Expatica

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