Tuesday, November 6, 2012

Gallois Report: "The Precautionary Principle Must Be Used For the Prevention or Reduction of Risks, Not to Paralyze Research"


Compact for the Competitiveness of French Industry

By Louis Gallois
Commissioner General for Investment

Report to the Prime Minister

November 5, 2012

Assistant Rapporteurs:
Clement Lubin,
Pierre-Emmanuel Thiard

[The following blog entry was translated from the original French language by ITSSD Advisory Board member Dr. Sorin Straja, who hosts the ITSSD Journal on Energy Security.]

The following paragraph appears on page 39 of the report:

"Nous ne voudrions pas clore ces développements sur la formation sans évoquer la culture
scientifique et technique. La formation initiale des jeunes doit, plus qu’elle ne le fait actuellement, les conduire à s’orienter vers les métiers de l’industrie. Nous avons vu que les formations techniques ont une image peu valorisée dans le secondaire. Les grands enjeux de la science sont insuffisamment explicités. La curiosité technique s’estompe. Plus grave encore, la notion même de progrès technique est trop souvent remise en cause à travers une interprétation extensive – sinon abusive – du principe de précaution et une description unilatérale des risques du progrès, et non plus de ses potentialités. Le principe de précaution doit servir à la prévention ou à la réduction des risques, non à paralyser la recherche ; il doit, au contraire, la stimuler. Fuir le progrès technique parce qu’il présente des risques nous expose à un bien plus grand risque : celui du déclin, par rapport à des sociétés émergentes qui font avec dynamisme le choix du progrès technique et scientifique, tout en n’étant pas plus aveugles que nous sur les nécessaires précautions."

[English Translation]:

" We would not want to close these developments on education and training without mentioning the scientific and technical culture. The initial training of young people should, more than it is  done currently, lead them towards industry trades. We have seen that in high-schools the technical training has an image of little value.  The key issues of science are insufficiently explained. Technical curiosity fades. More seriously, the very notion of technical progress is too often challenged through an interpretation that is extensive - if not even abusive - of the precautionary principle and a unilateral description of the risks of progress, but not also of its beneficial potential. The precautionary principle must be used for the prevention or reduction of risks, not to paralyze research; it must, on the contrary, encourage research. Rejecting the technical progress because it presents risks constitutes a far greater danger: that of the decline, compared with emerging countries that make in a dynamic way the choice of the technical and scientific progress, while being no more blind than us on the necessary precautions."

[Recent media accounts generally describing the contents of the Gallois Report make clear the seriousness of the obstacles faced by French industry and the economy at large, in part, due to insufficient commitment to scientific and technological research and aversion to risk.  This is the second time a report was delivered to a sitting French Government that has drawn the same conclusion: the precautionary principle impairs both scientific and technological innovation and economic growth when employed as a disguised barrier to trade and a reflexive luddite mechanism.]



Thirty billion to boost French industry

tuesday, november 6, 2012

This is the challenge of the Pact for Competitiveness of French industry, presented Monday by Louis Gallois government. François Hollande promises "tough decisions."

In its mission statement, the Prime Minister asked the General Commissioner for investment "to give a new impetus to the French industry " . The report therefore explores Welsh major axis 74 pages and 22 proposals. "The general idea is to give some leeway to the French industry relying on compulsory levies, said yesterday the former head of the SNCF and EADSIt is a clash of competitiveness is also a crisis of confidence. '
"Balloon oxygen" financial
Cost of shock: 30 billion euros of cuts in employers' social and, in a year or two to pay up to 3.5 times the minimum wage (approximately € 4,990).Louis Gallois proposes to fund a two-thirds increase in CSG about two points (between 20 and 22 billion), but also increases targeted VAT and financial transactions. Reduction of public expenditure should take "in the future, in part, the relay of taxation" . Health insurance and family allowances could also be tapped.
With this "lifeline" financial state would create an environment conducive to the development of three priority areas: enabling technologies, health and economy of living, energy transition. Research, innovation and the emergence of intermediate sized companies, missing the French industry would be encouraged based on groups of French international. The investment would be supported by the doubling of the capacity of financing public investment Bank (BPI), through public-private partnerships, and the orientation of private savings to industry (longer contracts life insurance).
Welsh final installment plan: transfer the financing of social protection to continue to reduce taxes for companies to renegotiate the conditions of access to the labor market and training (paid employment and precarious) to create a new pact social or "pact productive" .
Frédérique Jourdaa.



Pact for competitiveness of French industry

Ex-Pd-g SNCF and EADS Louis Gallois presented Monday, November 5th Prime Minister Jean-Marc Ayrault its long-awaited report on a "pact for competitiveness of French industry." There are 22 proposals formula sales and 30 billion euros the amount of effort required to turn the economy hexagonal, 20 billion decline in employer contributions and $ 10 billion for employee contributions, all funded by VAT, CSG, green taxation, as well as the decline in public spending.

Among its 22 proposals, he mentions in particular the commitment of the State not to modify certain provisions relating to companies (research tax credit, devices called "Dutreil" promoting the detention and transfer of businesses, steps towards the investment in SMEs ...), the role of employees in corporate board, creating a shock competitiveness (name rejected by the government), the revival of research on shale gas (also rejected) the alignment conditions of export credit and guarantees the highest level found in other developed countries, an effort in research, creation, within the BPI, a product consisting of preferred shares without Voting for growing businesses, the establishment of a "Small Business Act" for SMEs, increased effort in training, the lengthening of life insurance contracts by adapting their diet tax and benefit contracts accounting units (shares) and contracts diversified compared to euro (mainly bonds)...


Louis Gallois advocates 30 billion euros of cuts costs

PARIS (Reuters) - Louis Gallois proposes lowering social security contributions of 30 billion euros to halt the decline of French industry, in a report to the government on Monday, the eve of the announcement of the first measures of competitiveness .
The ex-CEO of EADS and SNCF suggests transferring 20 billion in employer contributions and employee contributions 10 billion, up 3.5 minimum wage, taxation (VAT, CSG, carbon tax, taxation estate, niches, etc.)..
"I propose 22 key measures (...) to stop the slide, stop stalling, support investment," he told reporters. "This is what I call (...) the impact of competitiveness, which is in fact a crisis of confidence."
According to the Minister of Economy, Pierre Moscovici, the report "we will apply very widely." President François Hollande has meanwhile promised "tough decisions" oriented primarily on employment.
The government is still far away from a massive transfer of social contributions to taxes, to protect household consumption and therefore growth.
"I've always said that the French economy did not need a trauma, but a therapy of deep tissue therapy, therapy over time," said Pierre Moscovici on BFM TV.
An effort of 30 billion euros in fiscal consolidation is already scheduled for 2013, "we must also bear in mind the purchasing power of households," he added, promising measures to lower the cost of labor, without precision.
Louis Gallois argues that this transfer is made on a year or two "if fiscal constraints or the desire to limit the impact on the household demand imposed", but no more so as not to dilute its effects.
The government is being delivered against an increase in the standard rate of VAT, the bulk of the effort (about two-thirds, or 20 to 22 billion) will be financed by an increase in CSG, said he.
According to the website of the weekly Le Point, the government, which will meet on Tuesday at a seminar on the subject, consider using a tax credit to reduce the burden on businesses of twenty billion.
Point also believes that it would be ready to return part of its decision not to increase the standard rate of VAT, which may be increased from 19.6% to 20% in 2013.
"I do not comment on rumors or leaks," said Pierre Moscovici. Minister for Relief productive, Arnaud Montebourg: "The decisions are not finalized. We will make tomorrow. We are working on all the assumptions."
Louis Gallois diagnosis from a severe drop accelerated French industry, whose share in the value added of the French economy fell to 12.5% ​​in 2011, which places France in 15th area euro.
"The French industry has now reached a critical threshold beyond which it is threatened with disintegration," he wrote.
He stressed that the decline 10000000000 employee contributions limit the impact of an increase in the CSG on the purchasing power of employees. In any case, it refers to the consultation on the financing of social protection arrangements that transfer.
He also believes that reducing public spending will eventually take over for a share of taxes.
Advancing the figure of 30 billion, or half of the margin loss of French companies since 2001, he said he wanted to combine both a "critical mass" of economic constraints and "absorption system tax within a short time. "
In his mind, if the decline in payroll must provide a "lifeline" for businesses, it should be clearly oriented investment and innovation, not to the distribution of dividends or salary increases.
To facilitate the flow, it also offers a limited reduction of corporate income tax for reinvested earnings and taxation of share buybacks, which according to him is that dividend distributions "disguised".
It suggests measures to stabilize the legal and tax rules, to improve relations between large firms and subcontractors and support for innovation and further research on techniques for exploiting shale gas.
It also offers improved corporate governance, such as the automatic granting of double voting rights to shareholders holding their shares at least two years.
To meet capital requirements of midsize (ETI), he advocates including the creation, within the new Public Investment Bank (BPI) shares without voting rights but better paid.
This report was supported by the right-wing opposition and has been criticized by the Communist Party, while employers' organizations invited the government to act quickly.