x Abu Dhabi, UAESaturday 22 July 2017

French tycoon Bernard Arnault applies for Belgian nationality

World's fourth wealthiest man shocks France by applying for Belgian nationality, focusing attention on President Francois Hollande's "bash-the-rich" policies.

MARSEILLE, France // The French tycoon Bernard Arnault, the world's fourth wealthiest man with a fortune estimated at up to €32 billion (Dh150bn), has shocked France by applying for Belgian nationality.

In doing so he has focusing new attention on President Francois Hollande's "bash-the-rich" policies.

Mr Arnault, 63, whose LVMH group includes such luxury brands such as Christian Dior, Louis Vuitton, Givenchy and Moet & Chandon, has denied that tax issues or politics played any part in his decision.

But this has not been enough to stop criticism of the move or speculation on what lies behind it.

Mr Hollande, France's first socialist president since 1995, fought this year's election campaign in part on the mantra that finance should serve the state and not direct it.

In the furore that has followed news of Mr Arnault's wish to switch nationality, the president has joined others, from the left to the far right, in questioning his commitment to France.

During a solemn television appearance to announce harsh austerity measures to confront France's economic crisis, Mr Hollande said: "He should have measured what it means to apply for citizenship to another country. In this period, we need to appeal to patriotism."

The president welcomed an assurance from Mr Arnault that he was domiciled in France for fiscal purposes and intended to remain so. But media reports have questioned the industrialist's assertions.

Some commentators have suggested the decision could be linked to business projects in Belgium, while state-owned France 2 television offered the hypothesis that, as a Belgian national, Mr Arnault would be able to apply for citizenship of the tax haven of Monaco.

Marine Le Pen, the leader of the extreme right-wing and populist Front National, described the proposed change of citizenship as "scandalous".

The left-leaning daily newspaper Libération went further, with a front-page headline reading "Get lost, you rich idiot".

Mr Arnault responded by saying he had no alternative but to sue "given the extreme vulgarity and violence" of the insult, which recalled a famous comment by Nicolas Sarkozy who, when president, was heard uttering similar words to a man who refused the offer of a handshake.

Mr Hollande used his interview on peak-time television on Sunday night to prepare France for its worst spell of belt-tightening since the end of the Second World War, when France embarked on its "Les Trente Glorieuses", 30 years of growth.

Budget proposals to go before the French parliament soon include a €20bn increase in the tax burden on business and the better-off, and €10bn of cuts.

Mr Hollande pledged that public spending next year would not exceed this year's by as much as one euro. He also stuck to his campaign pledge to impose a 75 per cent tax rate on all annual income above €1 million.

There would be no exemptions for entertainers or sportsmen, he said.

Mr Arnault may insist ferocious tax rates have no influence on his thinking. But the satirical French weekly, Le Canard Enchainé, recently calculated that the new tax would oblige the Qatar-owned Paris Saint-Germain football club to pay €79million a year for the services of its new striker, Zlatan Ibrahimovic, if - as the terms of his transfer require - it is responsible for his income tax and social charges on top of an annual pay of €14m.

The president admitted recently that his country faced an economic crisis of "exceptional gravity".

He said on television that he had given himself two years to revive France's economy, acknowledging that growth forecasts had deteriorated to "scarcely better than zero" for this year and "about 0.8 per cent" for next year.

Some critics have suggested he was mistaken in giving priority to foreign affairs - the euro and Syrian crises, for example, and withdrawal of French troops from Afghanistan - at the start of his presidency ahead of pressing domestic issues.

Le Figaro magazine, of the right and one of Mr Hollande's routine critics, posed the question at the weekend: "Are they [Mr Hollande and his government] up to it?"

Opposition centre-right politicians have mocked his early performance, claiming that his assault on the rich would not only lead to an exodus of wealth creators from France, making the country a laughing stock, but also yield relatively little for public finances.

On television, the president pointed out that he was unlikely to achieve in his four months since election "what my predecessors haven't done in five or 10 years".

Meanwhile, Mr Arnault, who must have been aware that his Belgian nationality request would generate intense controversy, said he was acting for purely personal reasons, although these were unexplained.

"I am and will remain a tax resident in France and in this regard I will, like all French people, fulfil my fiscal obligations," he said. "Our country must count on everyone to do their bit to face a deep economic crisis amid strict budgetary constraints."

It will not be lost on observers of French politics that his wealth is roughly equal to the total Mr Hollande has promised to find in extra taxes and spending cuts.

foreign.desk@thenational.ae

* With additional reporting by Agence France-Presse