Wednesday, August 4, 2010

President Sarkozy displays his credentials

As the Financial Times reports
The French government took steps to tighten its grip on partly state-owned companies to ensure they maintain factories and jobs in France.

Nicolas Sarkozy, French president, appointed a senior business figure to run a revamped agency responsible for government shareholdings. Jean-Dominique Comolli, deputy chairman of Imperial Tobacco, will act as commissioner for state shareholdings, reporting directly to Christine Lagarde, finance minister.

The government also set down rules obliging companies with a government stake to account regularly to ministers for their investment decisions, purchasing policies and supply chain management.
All this activism is the result of a feeling of betrayal. Earlier this year Renault, which had received government subsidies when it was in a tight corner, showed intentions of moving the production of the Clio to Turkey. The French government owns 15.01 per cent of the factory and up with that M. le President would not put. So Renault's CEO had to promise that the bulk of the manufacturing will stay in France, which, presumably, will mean that at some point soon the factory will have to be bailed out again. (Though Bagehot at The Economist thinks that M. le President agreed to let the matter drop but provides not link to the story.

Let us not forget that M. Sarkozy's popularity has hit an all-time low even by the standards of French presidents. He is clearly trying desperately hard to find some way of appealing to the electorate.

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