France to cut 20K military jobs, seeking savings as economic crisis looms

By The Canadian Press - Monday, April 29, 2013 at 7:18 AM - 0 Comments

PARIS – France is cutting 20,000 military jobs in coming years and sharply tightening its defence budget in coming years.

The new cuts are aimed at dealing with undiminished demands on the French military at the same time that the bill for France’s decades of deficit spending is coming due.

According to the defence ministry’s new “White Book on Defence and National Security” France will cut an additional 20,000 defence posts by 2019, in addition to the 55,000 cuts called for under the last top-to-bottom defence review five years ago. According to the government, there are 228,000 members of the military now.

The broad outlines of France’s defence strategy — maintaining its nuclear arsenal and its place in NATO — are unchanged, according to a review of long-range plans released Monday.

Good news, bad news

By macleans.ca - Wednesday, April 24, 2013 at 2:01 PM - 0 Comments

Good news

Philippe Wojazer/Reuters

Lawfully wedded

France became the 14th country to legalize same-sex marriage, following New Zealand last week. The bill passed despite at-times violent opposition by far-right groups. Earlier this week, the speaker of France’s lower house received an envelope filled with gunpowder and a warning to stop the vote. But polls showed the majority of French support same-sex marriage, just as they have in countries across Europe (even strongly Catholic ones such as Portugal) that have approved similar laws. More evidence that the same-sex-marriage debate is, for most, not a religious one, but one of human rights.

Last laffs

It’s official. After nine disappointing, frustrating, insert-adjective-here years, the Toronto Maple Leafs have made the playoffs, achieving what every other NHL team has since the 2004 lockout. Vancouver, Montreal and, in all likelihood, Ottawa or Winnipeg, will join them, and while the odds are long that one of them will win the Stanley Cup, a fan can dream. Meanwhile, the NHL is reportedly planning six outdoor games next season—including one in L.A.—suggesting hockey might be in sight of its holy grail: to be cool in both Canada and the U.S.

Continue…

French PM Jean-Marc Ayrault arrives in Ottawa today to begin four-city visit

By The Canadian Press - Wednesday, March 13, 2013 at 6:02 AM - 0 Comments

OTTAWA – The Prime Minister of France, Jean-Marc Ayrault, arrives in Ottawa this afternoon to begin a four-city official visit to Canada.

Prime Minister Stephen Harper will welcome his French counterpart just before 4 p.m. ET on Parliament Hill.

The two leaders will then discuss Franco-Canadian economic ties and efforts to forge a free trade pact between the European Union and Canada.

Ayrault will meet in Toronto on Thursday with Ontario Premier Kathleen Wynne before heading to Montreal that evening.

Then it’s off to Quebec City and talks with Premier Pauline Marois, who met with Ayrault and French President Francois Hollande in Paris last October.

Marois had told a radio network in the French capital that a referendum on sovereignty in Quebec is hardly conceivable right now.

Marois also stressed that Quebec would continue to defend its interests.

For his part, Hollande told Marois during their talks that France would return to its traditionally neutral policy on Quebec independence.

Intervention means moving into Mali

By Michael Petrou - Friday, January 25, 2013 at 9:30 AM - 0 Comments

Issouf Sanogo/AFP/Getty

Robert Fowler got to know the Islamists now battling French and Malian troops in northern Mali pretty well during the 130 days he spent as their hostage in 2008 and 2009. Then the UN secretary general’s special envoy for Niger, he and fellow Canadian diplomat Louis Guay were kidnapped by al-Qaeda’s African franchise and lived with them in desert camps until they were freed.

Fowler describes men more single-minded than any he had previously encountered. Their devotion to Islam was constant, as were their attempts to convert them. They showed no interest in the usual concerns of young men: music, sports, fashion, sex. “The mujahedeen seemed perfectly content to talk and chant about Allah and their servitude to Him endlessly,” writes Fowler in a memoir. Life on Earth was a blink of the eye, and death was nothing when you would live in paradise forever. They hoped to die soon in the service of jihad, or holy war. Around the campfire, young recruits listened with wide-eyed wonder to stories of battles against Algerian soldiers that left a battlefield strewn with their apostate enemies’ blackened limbs—proof, if it was needed, that God was on their side. And yet for all their spiritual obsessions, Fowler’s al-Qaeda captors had practical strategies about how Islam’s victory in this world might be achieved. Continue…

Rosé is here to stay, and other international wine trends

By Jessica Allen - Tuesday, January 22, 2013 at 5:51 PM - 0 Comments

Andrew Johnson/Getty

You can’t find a bottle of wine for under $5 in most Canadian liquor stores, despite the fact that low-cost vino makes up 70 per cent of wine consumption globally. The irony was not lost on the crowd at the Jan. 22 Vinexpo news conference that detailed the results of a global study on current wine and spirit trends. They even giggled after seeing a chart breaking down world wine consumption by price in 2007 to 2011 with a forecast to 2016. In 2011, almost 70 per cent of wine sales were for bottles under $5 USD. Twenty-one per cent were for bottles priced between $5 and $10, and the remaining nine percent were for wines costing more than $10. The next chart broke down Canada’s consumption in the same way, only there wasn’t even an under $5 category (see the first two slides below).

But Vinexpo chairman Xavier de Eizaguirre–and Baron Philippe de Rothschild’s managing director–looked on the bright side of Canadians having practically no access to wines $5 and under. They tend to be of poorer quality, he said. Think of it as training our palates to not accept cheap plonk.

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Cheese-eating surrender monkeys go to war: Why France is in Mali

By Michael Petrou - Tuesday, January 15, 2013 at 11:22 PM - 0 Comments

French troops drive through Mali's capital Bamako on Tuesday, January 15, 2013. (AP photo)

Is there are a French television show equivalent of The Simpsons? If so, its writers should start working on some catchy anti-American slurs that imply military cowardice.

It was The Simpsons, back in 1995, that first dubbed the French “cheese-eating surrender monkeys” — a phrase that gained renewed currency in the run-up to the 2003 Iraq war, which France declined to join.

The barb stuck, at least in America, Britain and Canada, where it played into popular perceptions about France’s quick defeat and subsequent collaboration in the Second World War, and about its perceived disdain for America and Britain in general. For defenders of France, the sneer simply underlined America’s supposed penchant for imperialism in contrast to France’s preference for diplomacy and multilateralism.

These stereotypes were not accurate then and aren’t now. France has always been willing to act with force, and without permission, when doing so suited its interests. And from France’s perspective, many of its interests are in its former colonies in Africa. It’s not surprising then that on Friday France launched a military intervention in Mali, where al-Qaeda and other Islamists have taken over the northern half of the country and were poised to push south, threatening the capital Bamako. Continue…

Dispute over offshore account snarls the hunter-in-chief of French tax evaders

By The Associated Press - Thursday, January 10, 2013 at 5:54 AM - 0 Comments

PARIS – The man at the forefront of France’s fight against fiscal fraud is now one of those being investigated.

Budget Minister Jerome Cahuzac has spent months singling out corporate multinational tax dodgers, citizens who live abroad to avoid taxes and those within France who stash money in overseas accounts. Now he is ensnared in just the sort of investigation he thought would help turn France’s finances around, as prosecutors take a close look at an online journal’s allegations that he transferred money from a Swiss account into one in Singapore.

Cahuzac, a former plastic surgeon who specialized in hair plugs, has countered with a defamation complaint against the online site Mediapart. So far his boss — President Francois Hollande, who famously said he does not care for rich people — has backed the man he appointed to keep France’s finances in line.

It was Cahuzac who tallied just how much potential revenue France lost last week when the country’s highest court threw out Hollande’s plan to tax the wealthy at 75 per cent. Cahuzac was the one standing before the cameras, promising to battle fiscal fraud and singling out “a certain search engine” in legal negotiations to regularize its tax situation. And he was the engineer of a 2012 campaign manifesto affirming that that “taxes are a cornerstone of our social pact.”

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French panel overturns 75 per cent tax on ultrarich, saying it’s unfair

By The Associated Press - Saturday, December 29, 2012 at 10:25 AM - 0 Comments

PARIS – Embattled French President Francois Hollande suffered a fresh setback Saturday when France’s highest court threw out a plan to tax the ultrawealthy at a 75 per cent rate, saying it was unfair.

In a stinging rebuke to one of Socialist Hollande’s flagship campaign promises, the constitutional council ruled Saturday that the way the highly contentious tax was designed was unconstitutional. It was intended to hit incomes over €1 million ($1.32 million).

The largely symbolic measure would have only hit a tiny number of taxpayers and brought in an estimated €100 million to €300 million – an insignificant amount in the context of France’s roughtly €85 billion deficit.

Prime Minister Jean-Marc Ayrault was quick to respond, saying in a statement following the decision the government would resubmit the measure to take the court’s concerns into account. The court’s ruling took issue not with the size of the tax, but with the way it discriminated between households depending on how incomes were distributed among its members. A household with two earners each making under €1 million would be exempt from the tax, while one with one earner making €1.2 million would have to pay.

The French government approved the tax in its most recent budget, amid criticism by some that it would do little to stem the country’s mounting fiscal problems and would drive away the wealthiest citizens. Hollande’s popularity, meanwhile, has been tanking as the country’s unemployment continued its rise for the 19th straight month.

In recent weeks, Gerard Depardieu — France’s most famous actor — announced his intention to turn in his French passport and move to a village in a tax-friendly Belgium.

Belgium to largish French movie idols: Welcome!

By Paul Wells - Monday, December 17, 2012 at 5:39 PM - 0 Comments

Belgium’s foreign minister Didier Reynders seems a jolly fellow. He should be, given that Gérard Depardieu has chosen to live in Belgium and engage in a shouting match with the French government over French income taxes, which are high. Today Reynders gave an interview to the centre-right newspaper Le Figaro, where critics of the socialist president François Hollande are made to feel comfortable.

Dépardieu’s arrival is a good-news story for Belgium, which could use one; Wikipedia’s entry on Belgium’s “2007-2011 political crisis” seems to me to have pretty arbitrary start and end dates. Reynders’ interview catches the longtime former finance minister in an ebullient and cutting mood. On French PM Jean-Marc Ayrault’s use of the word “pathetic” (minable) to describe Dépardieu: “These are words we would never use in Belgium, even when we are very angry.” On the French government’s desire to renegotiate tax collection between the two governments, the gentlest possible No Way: “We’re ready to examine many things, as long as the superior principle of free circulation of people, goods and services within the EU is respected. But if this is about recognizing some French power to tax people who live in Belgium, that’s a whole other matter. Every European country must accept that its citizens decide to live elsewhere.” Continue…

A global tour of carbon pricing

By Aaron Wherry - Tuesday, November 6, 2012 at 1:24 PM - 0 Comments

As noted yesterday, Stephen Harper is presently in India, a country that has a carbon tax. After India, he will visit the Philippines, where pig farmers are currently selling carbon credits.

In June, Mr. Harper visit France, which previously abandoned plans for a carbon tax, but is part of the European Union’s emissions trading system.

In March, Mr. Harper visited Thailand, South Korea and Japan. Thailand is reportedly moving towards a cap-and-trade system. Japan has now introduced a carbon tax, while Tokyo has had a cap-and-trade system for the past year. South Korea passed cap-and-trade legislation in May.

In February, Mr. Harper visited China, which is now experimenting with a carbon market.

In January, Mr. Harper delivered a speech in Switzerland, which has both a carbon tax and a trading system.

(In September, Mr. Harper visited Russia, which is maybe (?) thinking about cap-and-trade.)

French government shies away from shaking up workweek

By The Associated Press - Tuesday, October 30, 2012 at 5:24 AM - 0 Comments

PARIS – The 35-hour work week? Untouchable. The social safety net? Untrimmable.

So how on earth can France’s Socialist government keep its promise to make this country, and Europe, more competitive in the global marketplace? Slowly and carefully, President Francois Hollande says.

After meetings with world finance chiefs Monday, he acknowledged “there are measures to take” on reducing the cost of labour in France, among the world’s highest — but said they “should be spread out over time.”

Many economists say France could be running out of time, however, and that could have repercussions beyond its borders. Geographically and economically between Germany and Spain, France has allied with its northern neighbour to manage the eurozone crisis, but its huge state debts and chronic unemployment are making it look increasingly like struggling Spain.

The head of the World Trade Organization said that “it’s particularly urgent” for France to loosen up its economy. “This link among growth, competitiveness and jobs … is the major problem of France and to a certain degree Europe right now,” Pascal Lamy told Hollande at the Monday meeting.

The French government is hoping that gradual change is the way to go, and that a series of private meetings and cautious public statements in recent days will mollify both fearful workers and employers who say it’s no longer worth the cost to hire.

“It’s not going to be a question of shocking or brutalizing the French economy,” Economics Minister Pierre Moscovici said Friday. “It’s going to be continuous action, spread over our entire mandate.”

The WTO promotes free trade and has criticized government intervention in big French companies, saying France should stop protecting its industry.

But after Hollande was elected in May, the Socialists’ first response to France’s lagging economy was to create an agency essentially dedicated to meddling: the Ministry of Industrial Recovery. That failed to keep unemployment from rising, or some of France’s biggest corporations from announcing thousands more layoffs — including carmaker Peugeot Citroen, Air France and retail giant Carrefour.

Hollande then asked one of the country’s most respected businessmen, former Airbus chairman Louis Gallois, to spend months drawing up plans to make France more competitive. But as reports leaked over the past week about the report’s recommendations — rethinking the controversial 35-hour week, shifting some of the tax burden to workers, cutting public spending — the government swiftly distanced itself.

“I’d advise against the idea of a shock, which has more of an attention-getting effect than a real therapeutic effect,” Hollande said Thursday. Without offering details, he said he would prefer a “pact” among the government, workers and employers.

France has only to look south to neighbouring Spain for reasons to go slowly with major labour reforms. Spain, facing the possibility of default, had little choice but to impose stark reforms, but the results have been dire: Tens of thousands of people joined anti-government protests as unemployment hit 25 per cent.

France isn’t in as bad shape as Spain — borrowing costs remain low and the jobless rate is just over 10 per cent. But it faces many of the same long-term problems: Rigid work rules, including the 35-hour week, high administrative costs, strict government oversight of layoffs and generous severance when job loss is inevitable. The upshot is that corporate profits end up being taxed more than 60 per cent.

Since 1984, French unemployment has been below 8 per cent for only 16 months.

The government, and the French, hope Germany’s more robust economy is ultimately a better comparison. And some say there are signs that the French are ahead of their government in realizing that something has to give.

Despite the official length of the French work week — it’s equal with the Democratic Republic of Congo as the shortest in the world, according to World Bank figures — French employees actually labour on average about 40 hours weekly, according to several polls. Other surveys have found that even on vacation, a sizable number check in to the office even while on vacation.

“There’s a maturation that is happening in French society, even if we still have leaders who can’t admit it,” said Gerard Dussillol of the pro-market Thomas More Institute.

But the French themselves have their limits, especially when it comes to taxes. According to recent surveys, six in 10 French think the cost of labour is hurting the economy, but fewer than three in 10 think the burdens should shift to workers.

“When you take a paystub in France and one in Germany, and you see it costs 25 per cent more in France than in Germany, you don’t need a study” to know which country will come out ahead, said Dussillol. Meanwhile, Hollande and others fret about France’s eroding share of global GDP, which has been cut in half to about 2 per cent since 1990.

The heads of major French companies came together to demand that the government lower their labour costs by a total of €30 billion over two years. On Monday, Moscovici said that wouldn’t happen, explaining that the government could neither risk raising taxes on already struggling consumers nor abandon its plan to reduce the deficit.

Economists are doubtful about real labour reform under a Socialist government, saying they expect the competitiveness report from Gallois, due Nov. 5, to fall into the same dust-gathering category as 40 other studies compiled over the past decade.

“The rest of the world continues to finance the French economy,” said Jean-Christophe Caffet, an economist for Natixis.

Markets are starting to take notice.

Standard and Poor’s downgraded France’s largest bank BNP Paribas on Thursday and lowered expectations for 10 others, citing high unemployment, lower domestic growth and the European recession.

“We’ve been in this kind of infernal machine for a long time,” said Dussillol. “Certain economic systems are stable for years and then suddenly it falls apart.”

___

Sylvie Corbet in Paris contributed to this report.

Another rape case against Dominique Strauss-Kahn dropped

By Scaachi Koul - Tuesday, October 2, 2012 at 12:32 PM - 0 Comments

Former head of the International Monetary fund, Dominique Strauss-Kahn, has been cleared of one serious charge in the ongoing investigation against him for sex parties and multiple sexual assaults.

The case—a separate one from the now-infamous 2011 charges a hotel maid made in New York against Strauss-Kahn which were also dropped—is rare good news for Strauss-Kahn. A prosecutor said the 2010 gang-rape charges were dropped for a “lack of information.” A Belgian call girl told French police that the relationship she had with Strauss-Kahn in Washington was consensual, and wouldn’t file a complaint.

While this case may have been dismissed, Strauss-Kahn still faces charges in Lille, France, for the procurement of prostitutes. Prostitution is legal in France, but pimping isn’t. The maximum penalty for this is 20 years in jail.

Thousands march in Paris against austerity

By The Canadian Press - Sunday, September 30, 2012 at 11:46 AM - 0 Comments

PARIS – Thousands of demonstrators are marching peacefully in Paris to denounce austerity measures in Europe that have sparked violent protests in other EU countries struggling to avert fiscal crises.

The march organized largely by the “Left Front” party and the Communists comes ahead of the French parliament’s debate this week on a European fiscal treaty.

The treaty would set up the European Stability Mechanism bailout fund that European leaders hope will help calm a debt crisis that threatens the euro zone and the global economy.

The main conservative opposition party and most of President Francois Hollande’s Socialist Party back the treaty. But it has splintered the French left: Far-left parties, the Greens and some dissident Socialists oppose it.

Austerity has fanned recent violence in places like Spain and Greece.

Court orders magazine to turn topless photos over to Kate Middleton

By Scaachi Koul - Tuesday, September 18, 2012 at 9:01 AM - 0 Comments

Although the pictures have already been seen millions of times over across the world, a French court has issued an injunction against the magazine Closer, stopping any further use of the photos of a topless Kate Middleton.

A French court has ordered Closer to hand over the photos to the Royal couple.

The court said the magazine would be fined $13,000 every time it republished or distributed the offending images.

An Italian magazine ran yesterday with a 26-page spread of the images. The Irish Daily Star also ran the pictures on the weekend.

Can’t go topless in Paris — even at the beach

By Kate Lunau - Monday, August 13, 2012 at 11:00 AM - 0 Comments

Ana Arevalo/AFP/Getty Images

For the past decade, Parisians have flocked each summer to Paris Plages, which transforms the banks of the Seine River to a series of urban beaches. All the necessities are there: white sand, parasols, roving ice cream vendors, even free concerts. One site currently has a giant screen allowing loungers to catch the Olympics.

But some appear to have been taking the beach theme a little too far. While topless sunbathing is welcome on beaches outside the city, Paris police are warning sunbathers to dress “in accordance with good morals and public order,” or face a fine of at least $46. Anyone who bares all and shows their “genital area or breasts” could face a much higher penalty—a year in prison.

Paris Plages, now in its eleventh year, was created by Socialist mayor Bertrand Delanoë to provide a beachside holiday to those who couldn’t afford to leave the city. Some criticized it as an expensive frivolity, but it’s expanded several times, a testament to its popularity, even without full-frontal nudity.

A bronze medal comeback for Canada’s soccer women

By Ken MacQueen - Thursday, August 9, 2012 at 3:52 PM - 0 Comments

Hussein Malla/AP

John Herdman, the English-born coach responsible for the rebirth of Canada’s national women’s soccer team, has a motivational picture in his home office. It’s a photo of team captain Christine Sinclair after last June’s soccer World Cup. She has her head in her hands, and there’s anger and despair on her face.

He made himself a promise, when he came from the New Zealand women’s program to join the team last September. “I said to the girls, this will be my motivation. I’ll never see a player of that quality in that state after a tournament.”

And, well, it came close after the last-minute larceny of losing to the Americans Monday with an extra-time goal that bumped Canada out of contention for the gold medal match at the London 2012 Summer Games. Sinclair, with those deep-set eyes was flashing her laser beam look of doom, not so much with despair, but certainly anger. There was outrage at some of the calls by Norwegian referee Christiana Pendersen, especially one against goalie Erin McLeod, for holding the ball too long. Outrage in Canada, too, at the loss, and the waste of Sinclair’s brilliant hat trick and of an overall level of play that showed this was indeed a world-class team.

Which brings us to the bronze metal match against France at a lovely new stadium in Coventry where the Canadians played most of their Olympic games. They’d come to think of it as their home turf, but they’d so wanted to play their last game in London, where the gold medal game was decided. No such luck so it was back to Coventry for bronze.

They had three days to restore their battered souls and bodies, swallow their disappointment and square off against the very difficult French. France whipped then 4-0 in the World Cup last June, the most humiliating loss of a humiliating tournament, where the Canadians lost every game. Herdman and his crew drafted their usual meticulous game plan, with one addition: a presentation in slides and video of the avalanche of goodwill, outrage and support that had piled in from every corner of Canada after their U.S. loss.

But, it soon came clear that loss had taken a physical and emotional toll on the team. “I think heading into the game we thought the emotions of being in the bronze medal game would sort of take us through it,” Sinclair said afterwards. “But most of us realized, I think partway through the first half, that we were absolutely gassed.”

The Canadians were flat. There were more than a few mental errors, wasted throw-ins and missed passes. The French, meanwhile, built the sort of impenetrable defensive wall that would have served them well circa 1939. Fortunately for the Canadians, the French were also the gang that couldn’t shoot straight. Their forwards rang balls off the goal posts and crossbars, and to the left, to the right and overtop. The shots that did hit the net were handled by McLeod, who played brilliantly, and by midfielder Desiree Scott, who deflected away a dead-certain goal inches before it crossed the line.

By any measure there were at least ten golden—well, bronze—scoring opportunities that eluded France.

Even a good team knows when it’s being outplayed. “I’m absolutely sure,” Herdman said, “everyone at home put a force field along the goal.”

But it takes a great team to know it’s being beaten, and not get beat.

For the second game in a row the Canadians fought for their lives in injury time, and in the 91st minute midfielder Diana Matheson was playing far forward when all logic dictated she should be back at centre awaiting another French attack. The ball came to her, she doesn’t even recall how, and she went through one of those slow-motion Chariots of Fire experiences where she placed the ball exactly where it needed to be, which is to say the back of a largely open net.

There it was, not only Canada’s first Olympic medal in soccer since the men won gold in 1904, but the first medal by the country in a team summer sport since the 1936 Summer Games in Berlin. “I was just in the right spot at the right time,” she said. She broke into a beautiful smile at the biggest goal she’s ever scored, and grabbed at her game jersey to kiss the Canadian team crest. “It felt like a dream,” she said. “It feels unreal right now. I’m just so happy for the team, the staff and all the Canadians that have been supporting us.”

The thing of it is, it was a total team effort, not the Christine Sinclair show. She had a strong crew on the field, in the support team, and, to hear the women tell it later, in every Canadian that rallied to their side over the past three days. Sinclair can finally relax, the team around her is at a new level, Herdman said.

The game ended about 10 seconds after the goal. Within minutes, Canadian Olympic rowing champion Marnie McBean tweeted the perfect post-game analysis: “Why do you train that hard? So you can win on the bad days!”

One can’t but feel a tug of sympathy for the French team, who left the field gutted. Their coach, Bruno Bini, slumped before the microphone in a perfect Gallic funk. “Sometimes you can give everything, and at the end it’s just not enough,” he said. “It’s just like a love story, and afterwards, the person is still going away.” The melancholy moment lacked only a smoldering Gitanes, a carafe of red and a violin.

Football can be cruel, Herdman said. But not Thursday. Not when the team captain is at his side, looking as though a massive weight was lifted off her, barely a year after a World Cup humiliation that sank the team to its lowest point in all her years on the team.

“It was great to see Christine smiling,” were about the first words out of Herdman’s mouth. He had to be thinking how good that photo is going to look on his office wall.

Vive la France

By Aaron Wherry - Wednesday, July 18, 2012 at 9:36 AM - 0 Comments

As first noted by our Michael Petrou, Peter MacKay, while speaking before an audience at the French embassy last week, offered an interesting take on French involvement in the War of 1812. The Citizen and Embassy Magazine now add the exact quote in question and an attempt by the minister’s office to explain.

MacKay praised France’s government and the contribution the French made to the War of 1812. “Suffice it to say in the 200th commemoration of the War of 1812, had the French not been here fighting side by side, we might be standing here next to each other in a new light,” MacKay told the audience, according to a tape recording made by Embassy.

But MacKay’s office said he didn’t make any gaffe. His office said he delivered a speech in English and French that touched “on the deep and unique bond that exists between Canada and France based on shared culture, values, history, and defence ties.” “He also noted that French played key roles in the War of 1812 alongside Canadians whose mother tongue was English,” stated an email from MacKay’s office. “The Voltigeurs of Lower Canada were in fact predominantly French-speaking, and were instrumental in repelling American invaders at the Battle of Chateauguay in 1813.”

Michael dealt with this potential explanation in his original post.

It will take some creative spinning to argue MacKay had a clue what he was talking about. French Canadians fought hard and well against the American invasion of Canada, notably at the Battle of the Chateauguay, a decisive Canadian and British victory. But these men were generations removed from France and showed it little loyalty. The biggest effect France had on their lives was that when Napoleon took on Britain, America felt emboldened to go to war against them.

Harper’s new friend in France

By Paul Wells - Monday, July 16, 2012 at 9:57 AM - 0 Comments

Stephane Lemouton/Abacapress/CP

In the two weeks between the first round of France’s presidential election and the runoff on May 6, Marc Lortie had a small but important assignment.

Stephen Harper told Lortie, a career diplomat who served a brief stint in the 1980s as a press secretary to Brian Mulroney and is now Canada’s ambassador to France, to get a hold of François Hollande’s portable telephone number. So Harper was one of a very few foreign leaders who were able to reach Hollande and congratulate him on the night he became France’s new president. French diplomatic sources, who reported this little tidbit to Maclean’s, were duly impressed.

It’s the little things that count when you’re trying to build a personal relationship. Harper is not always attentive to such details, but getting things right with the new French president is a high priority for him. That would be true with any new French president. The old country is at least Canada’s second- or third-best entree into any discussion with the European Union or NATO, and it’s a useful intermediary with a half-dozen Middle Eastern countries. Lortie himself was sent to Paris when Harper had high hopes, later dashed, for a productive relationship with Hollande’s dingbat predecessor, Nicolas Sarkozy. But France may be about to matter more than it usually does to Canada, so Harper has taken a series of steps to ensure he is in Hollande’s good books.

Continue…

Celebrating Canada’s War of 1812 Victory: All hail Sir Isaac Brock, Tecumseh, and Napoleon

By Michael Petrou - Monday, July 16, 2012 at 6:01 AM - 0 Comments

I don’t know about you, but for me nothing makes waiting in the sweltering heat for a buffet to open more bearable than listening to a speech by Defence Minister Peter MacKay.

And so it came to pass on Friday, when French Ambassador Phillipe Zeller invited various dignitaries and journalist freeloaders to the embassy to help celebrate Bastille Day — held to commemorate the storming of the Bastille in the early days of the French Revolution.

Anthems were played; Zeller gave a speech; then MacKay took the podium. He praised France, praised our troops, praised the enduring ties between Canada and France. So far, so many minutes until roast beef.

Then MacKay got historical. He talked about the impact the storming of the Bastille had, not just on France but the world. All true. And these crêpe appetizers are delicious.

MacKay should have stopped there. He didn’t. In fact, he said, as Canada marks the 200^th anniversary of the War of 1812, we should recall that things might have turned out differently without French help to Canada.

As students of history, as well as anyone — well, almost anyone — who has walked through the new War of 1812 exhibition at the Canadian War Museum, knows, France did play a major, if indirect, role in the war of 1812. Unfortunately, it was by waging total war against Britain, thereby preventing it from sending much in the way of troops and hardware to Canada. France, in other words, was on America’s side, not ours.

It will take some creative spinning to argue MacKay had a clue what he was talking about. French Canadians fought hard and well against the American invasion of Canada, notably at the Battle of the Chateauguay, a decisive Canadian and British victory. But these men were generations removed from France and showed it little loyalty. The biggest effect France had on their lives was that when Napoleon took on Britain, America felt emboldened to go to war against them.

France slams Big Business and the one per cent with $9 billion in tax hikes

By macleans.ca - Thursday, July 5, 2012 at 3:34 PM - 0 Comments

France’s new Socialist government announced tax rises worth $9 billion on Wednesday. The taxes, which will largely affect big corporations and France’s wealthiest households, are the first part of the Hollande government’s long-term plan to reduce France’s deficit while avoiding austerity measures.

The taxes are largely a reversal of previous tax cuts and policies introduced by the conservative former president Nicolas Sarkozy. The government said it would save an additional $1.1 billion by eliminating a payroll holiday introduced by its predecessor. Other cost-saving measures included surcharges for oil and financial companies, each raising an additional 550 million euros, and a levy on dividends and stock options.

While the government was initially taking on the deficit by raising taxes for France’s wealthiest, it would focus more heavily on budget cuts starting next year 2013, Budget Minister Jerome Cahuzac said.

“Cutting spending is like slowing down a supertanker: it takes time,” he told Reuters.

All ministries except education and justice are expected to cut spending by 2.5 per cent.

Elected on April 22, 2012 Hollande inherited a $2.3 trillion budget deficit from the Sarkozy government. The president was warned that his socialist government would need to cut between $7.5-12.6 billion in 2012 and $41.5 billion in 2013 for France to avoid the debt-addled fate of its southern neighbors.  

Why Sarkozy is in Canada while police raid his Paris home

By Martin Patriquin - Tuesday, July 3, 2012 at 3:48 PM - 0 Comments

Left: Paul Desmarais (Paul Chiasson/CP); right: Nicolas Sarkozy (Philippe Wojazer/Reuters)

While police rifle through his Paris residence, recently defeated French President Nicolas Sarkozy is vacationing in Quebec at a country abode owned by one of Canada’s richest families.

Fresh off his defeat in France’s June elections, Sarkozy is apparently suffering from a touch of burn out, according to a report in French magazine Le Point. The ex-President’s timing is auspicious: on Tuesday, police raided his home and office as part of an investigation into illegal financing of his 2007 presidential campaign.

Sarkozy, who lost his immunity from prosecution after losing to François Hollande on June 15, faces charges that he accepted €50,000 ($63,837) from cosmetic heiress Liliane Bettencourt. The amount is significantly larger than the €4,600 ($5,873) donation limit allowed by French law, and it fueled the popular caricature of Sarkozy as a stooge to France’s idle rich. (Sarkozy denied he took the donation.)

What is perhaps more interesting on this side of the Atlantic is Sarkozy’s choice of accommodations. Located roughly one-hour’s drive north of Montreal in Quebec’s Laurentians district, the house is owned by the wealthy and discreet Desmarais family. Sarkozy is a longtime friend of patriarch Paul Desmarais, who in 1968 bought the suitably named Power Corporation and turned it into a media, insurance and investment juggernaut with 2011 revenues of just over $33 billion. (He is #248 on the Forbes list of world billionaires.) No less than three former Prime Ministers—Brian Mulroney, Jean Chrétien and Paul Martin—worked at Power during their careers. Chrétien’s daughter France is married to André Desmarais, Paul’s son. Sarkozy has frequently vacationed in Quebec at the behest of Paul Desmarais.

Sarkozy and Paul Desmarais, 85, reportedly met in 1995, when Sarkozy’s career was slumping. The pair walked the forests and grounds of Sagard, the Desmarais palacial spread in the Charlevoix region in Quebec’s hinterland. “You must get yourself together, you’ll get there, we must build a strategy for you,” Sarkozy remembers Desmarais saying to him. Wealthy in both assets and contacts in French political circles, Desmarais helped guide the precocious Sarkozy into the President’s office in 2007. “If today I am president, it’s in part due to Paul Desmarais,” Sarkozy said in 2008.

The president certainly returned the favour. In February 2008, in a ceremony attended by Quebec Premier Jean Charest, Sarkozy bestowed on Desmarais the grand-croix de la Légion d’honneur, France’s highest order. The ties run even wider: one of Sarkozy’s former close advisors, Eric Le Moyne de Sérigny, was once married to Desmarais daughter, Sophie. Today, de Sérigny is himself embroiled in the campaign financing scandal.

The Sarkozy-Desmarais relationship has had profound (if largely unspoken) consequences for Canadian unity. Under Sarkozy, France abondoned its policy of “non-interference, non-indifference” to become a wholehearted ally of a united Canada. It is widely believed that this is due in large part to Desmarais, a dedicated federalist and noted scourge of the Quebec separatists. (Some of the fringe elements of the movement often point out how, as a native of Sudbury, Ontario, Paul Desmarais isn’t a true Québécois.) “Indeed, I love your coutnry. I love Canada’s beauty and the warmth and the generosity of its people,” Sarkozy told CanWest News in 2008.

It remains unclear how long Sarkozy will stay in Morin Heights, though if their relationship is any indication the ex-French president can count on the Desmarais clan for comfort and security, no matter what fate awaits him in Paris.

Updated: Wells vs. Geddes on the Euro and the new Jim Flaherty

By Paul Wells - Friday, June 22, 2012 at 5:38 PM - 0 Comments

A transcript of an email exchange between two guys who sit eight feet apart in our Ottawa bureau.

Paul Wells: John, I see it’s going badly between Angela Merkel and François Hollande. He’s Mr. Growth, she’s Ms. Austerity. Each has repeatedly endorsed the other’s political opponents. And this roundup in Le Figaro shows that both at a human level and a policy level, Europe’s most important relationship is in trouble.

Hollande’s determination to follow through on some of his more exuberant election promises is amazing to the Germans, who don’t just want spending restraint, they want the kind of structural labour-market reforms they went through in a decade ago. So when Hollande lowered France’s retirement age to 60 for some workers, “we were floored,” a senior German official tells Le Figaro. “We don’t understand Hollande’s determination to join the PIGS (the crisis-racked southern club of Portugal, Italy, Greece and Spain).” I’m also enjoying the German headlines. Süddeutsche Zeitung: “François, Nightmare of Business.” Financial Times Deutschland: “Mr. President, Break Your Promises!”

So the Germans may be irritated with Canada, but they’re furious at France. What do you make of it all?

John Geddes: As a hopelessly parochial Canadian, my initial reaction is that I’m glad the Germans don’t have time to dwell on their quite understandable irritation with us. At a deeper level, the Merkel-Hollande, austerity-vs.-growth tension makes me think of debate that’s played out here in recent times.

We learned that you need both. I’ve argued before that the key to Canadian deficit-eliminating success in the 1995-1999 period was tax-generating growth; but the Liberal formula included real restraint, too. It would be more rhetorically satisfying to argue for one over the other, but you need both when a serious debt crunch looms.

The problem is that concocting a policy blend that includes short-term pain with medium-term gain is going to be far harder in Europe circa 2012 than it was in Canada circa 1995. As Royal Dutch Shell CEO Peter Voser, no less, told Maclean’s recently, there’ s no quick solution to be had.

And, by the way, on Hollande’s lowering of the retirement age, isn’t it fascinating the Finance Minister Jim Flaherty managed to nudge up the eligibility age for Old Age Security to 67 from 65, albeit not until 2023, has gone over pretty smoothly. You can do things in this country without filling the streets with protestors. Well, sometimes.

Paul Wells: Indeed it should be possible to reconcile growth with the kind of structural reform that can keep these countries fiscally sustainable. The Europeans are getting no end of advice on this front. Robert Zoellick and Stephen Harper are saying a lot of the same things, and the leader they sound the most like is Merkel. But she won’t get far without a France-sized ally, and as long as Hollande is busy replaying the worst of early François Mitterrand, they’ve got trouble.

But enough about Europe. Why is Jim Flaherty suddenly containing the ardours of the Toronto condo market? Since we work at Maclean’s, I’ve always felt a little proprietary about housing-bubble speculation and I hope Flaherty hasn’t managed to ruin our fun.

John Geddes: It’s hard to remember now that back in 2006 Flaherty was all for blowing bubbles, or at least for making it easier to get mortgages for very long terms. But after introducing 40-year mortgages [very sloppy of me to phrase it like that; I've added an update at the bottom for more detail] opening the Canadian market wider to private mortgage insurers,  he’s spent the six years tightening, tightening, tightening.

This week, he reduced the  maximum mortgage amortization to 25 years. And that’s after he said in April that he wanted to avoid tightening the rules for the fourth time (since he first loosened them), hoping for “the market itself to correct to the extent correction is necessary.”

Apparently the market didn’t do its job. (The market can be lazy that way.) Hence Flaherty’s move to discourage marginal house hunters won’t buy unless they can really spread those payments out. Yet this powerful fear of an overstimulated housing market—especially the Toronto and Vancouver housing markets—comes against the backdrop of an economy that shows no sign of revving up, and is considered vulnerable to the interminable threat of a “shock” from Europe.

Bank of Canada Governor Mark Carney recently issued this warning (and woe betide us if we fail to pay heed to this giant who strides among us): ”Given the reality of global finance, it’s not enough to have our house in order unless we seal ourselves off from the world,” he said. “And, of course, if we seal ourselves off from the world, we would end up much poorer.”

So the policy trick is to cool an overheated housing market without choking our economy just as it might be hit hard by a European setback. That’s no easy matter. It’s why the spring budget looked so delicately—some might say awkwardly—balanced between austerity and let’s-not-go-overboard-with-the-austerity-here.

Note that Carney stresses the need not to view our problems in isolation, which brings us back to the dance of Merkel and Hollande. It would be silly to suggest Canada can do anything decisive to aid the EU. But shouldn’t we be doing something? The only something in play was the International Monetary Fund’s plan to bulk up its resources to help shore up EU economies, and Harper refused to contribute.

Maybe that’s justifiable: not our problem, fix it yourself. The other viewpoint (argued well here) is that anteing up to the IMF would have been a rather low-cost way to ensure our traditional Canadian place at the table. Why have the likes of Carney hanging around Basel, Switzerland, if our national policy doesn’t lend him as much clout and credibility as possible?

Paul Wells: For what it’s worth, I think there’s a strong case for keeping Canadian money (even loaned, even if from foreign-currency reserves and not from general revenues) out of a European solution, and it’s the case Bob Zoellick makes in the piece I linked to above. Europe needs reform; reform is hard; and constant lifelines don’t concentrate the minds of national European leaders who would prefer not to concentrate. The nativist “Don’t bail out rich European socialist” rhetoric the Conservatives are peddling doesn’t help, but just because they are oafish in selling their policy doesn’t mean it’s bankrupt policy.

I do wish Harper would simply explain his viewpoint to some actual Europeans. I continue to wonder why this prime minister, who was briefly so eager to get on U.S. television when the Fox-obsessed Kory Teneycke was his communications director, has not bothered to write an op-ed for the Financial Times or some German tabloid now that the fate of Europe is the biggest cloud on Canada’s horizon. But that’s the columnist in me talking, not the realist. The realist says it’s the weekend and we should enjoy it. Have a good one.

UPDATE:

John Geddes: Finance Minister Jim Flaherty’s office rightly points out by email that he did not introduce 40-year mortgages, as I originally and incorrectly phrased it in my exchange with Paul. The 40-year amortization was introduced to the Canadian market by a private mortgage insurer in the fall of 2006. That was my mistake, for which I’m sorry; I’ve corrected it in the text above.

What Flaherty did do in his first budget, back in the spring of 2006, was double the amount available, to $200 billion from $100 billion, as a government guarantee for private companies that insure mortgage loans. That move was plainly intended to pave the way for a big expansion of private mortgage insurance in Canada, and unequivocally signalled the government’s aim of stimulating the housing market.

Flaherty’s undisguised hope at the time was that private insurers would make it easier for would-be home owners to buy. Here’s how his May 2, 2006 budget explained the purpose of encouraging more private insurers to join the Canadian residential real estate game: “These changes will result in greater choice and innovation in the market for mortgage insurance, benefiting consumers and promoting home ownership.”

By way of innovation, private insurers introduced 35-year- and 40-year amortizations in the spring of 2006, even before the budget was tabled. The federal Canada Mortgage and Housing Corp., in step with the government’s policy bent, also began backing 30-year and then 35-year amortizations that spring. In that email note to me today, Flaherty’s office says there was no reason at the time to worry about any of this. “In 2006,” the minister’s officials write, “risks relating to mortgage markets were not top of mind.”

Evidently such risks were not top of mind around Flaherty’s office. However, the danger inherent in those spring 2006 “innovations” in the Canadian mortgage insurance business certainly worried David Dodge, the Bank of Canada governor of the day, and arguably the most respected voice in Ottawa on economic issues.

Canadian Press broke the story of Dodge’s urgently worded, promptly written June 30, 2006, letter to the head of CMHC.  ”I read with interest and dismay your press release of June 28 which indicated that CMHC would offer mortgage insurance for interest-only loans and for amortizations of up to 35 years,” Dodge wrote.”Particularly disturbing to me is the rationale you gave that ‘these innovative solutions will allow more Canadians to buy homes and to do so sooner.’”

Beyond Dodge’s remarkable blunt and prescient intervention, the recollection of Flaherty’s staff regarding the worry-free atmosphere regarding mortgage risks in 2006 seems to me a bit off. Just to cite just a couple of mainstream examples from the same month as Flaherty’s first budget, BMO economist Douglas Porter warned of worrisome “bubble-like activity” in Canadian real estate, and, down in the U.S., Fortune reported: “The great housing bubble has finally started to deflate.”

Hollande’s Socialist Party en route to majority

By macleans.ca - Sunday, June 17, 2012 at 7:39 PM - 0 Comments

French President Francois Hollande’s Socialists  appears headed for a solid majority in parliamentary elections on Sunday.

Here’s Andrew Strobo’s assessment of Hollande from the current issue of Maclean’s:

“Hollande, who has effectively been campaigning since his win over Nicolas Sarkozy on May 6, continues to cultivate an image of austere normalcy–a deliberate contrast to his ostentatious predecessor. He was sworn in alone, sporting a stern look on a drizzly day; there were no foreign heads of state, nor even his children or partner. He soon cut his own salary, and that of cabinet, by 30 per cent. Where possible, he travels by train. His motorcade reportedly obeys traffic lights. He wishes to be, in short, a reassuring bore.”

At the same time, Hollande has said that top of his list will be to put off a balanced budget until 2017.

During a speech today at the G20 summit in Mexico, British Prime Minister David Cameron is expected to take a swipe at Hollande for backsliding on austerity measures.

The Daily Mail, which reports to have an advance copy of the MPs speech, says he will urge France to deal with its debts: ”Countries simply cannot continue to run indefinite structural fiscal deficits without contributing to the fundamental imbalances that fuelled the 2008 crisis in the first place.”

Voting in France: Now comes the hard part

By Andrew Stobo Sniderman - Friday, June 15, 2012 at 6:00 AM - 0 Comments

Bertrand Langlois/AFP/GettyImages

French President François Hollande is riding high in the polls, as one does so soon after victory over a reviled opponent. The French left waited 19 years for a president to call their own, and his reception recalls the adulation enjoyed by U.S. President Barack Obama after the George W. Bush years. Now, Hollande will try to translate his popularity into a parliamentary majority for his Socialist Party in voting that concludes June 17.

In France, voters pick a president, take a breather, then elect a parliament. Hollande, who has effectively been campaigning since his win over Nicolas Sarkozy on May 6, continues to cultivate an image of austere normalcy—a deliberate contrast to his ostentatious predecessor. He was sworn in alone, sporting a stern look on a drizzly day; there were no foreign heads of state, nor even his children or partner. He soon cut his own salary, and that of cabinet, by 30 per cent. Where possible, he travels by train. His motorcade reportedly obeys traffic lights. He wishes to be, in short, a reassuring bore.

There is socialist substance beyond the symbolism. He has already lowered the retirement age to 60 from 62 for certain workers, partly unravelling Sarkozy’s hard-fought reform in 2010. This to the delight of some 110,000 workers expected to take advantage of the change in the coming year, at a cost of over a billion euros in 2013 and up to three billion euros per year by 2017. Hollande is also moving to shrink the salaries of heads of public corporations, and sticking to his pledge to pull French troops out of Afghanistan by the end of the year, two years ahead of schedule.

“Almost every French president enjoys a honeymoon of about six months,” says Martial Foucault, a professor at the Université de Montreal who specializes in French politics. “The question is what happens after elections, when he tries to pass concrete policies.” The bulk of Hollande’s promises will hinge on who controls the new parliament. Projections suggest that his Socialist Party will win the most seats, but they may still have to rely on the support of more extreme leftist parties to pass their legislation.

Hollande has proposed adding 60,000 teaching jobs and paying for them by increasing taxation on millionaires. As with most campaign talk, the numbers don’t quite add up. The proposed 75 per cent tax rate on France’s highest earners will only pay for a fraction of the costs projected for the new teaching staff.

“Mr. Normal,” as the French press has anointed him, eschews superlatives, but he faces big problems and high expectations. Unemployment is at a 12-year high of almost 10 per cent and rising, along with national debt. He has sold a majority of France on a vision of a more just and less unequal France. He will now have to try chasing this dream without aping the fiscal crises of debt-addled Italy, Greece and Spain.

Meanwhile, Hollande allows himself some less advertised exceptionalism. His motorcade was filmed by a journalist exceeding 170 km/h on the autoroute between Paris and Caen. No matter: Sarkozy was filmed doing the same last April, but he managed to crack 200 km/h.