http://www.zerohedge.com/news/2012-10-07/paris-luxury-apartment-prices-slide-french-1ers-dump-real-estate-avoid-soaring-taxes
Submitted by Tyler Durden on 10/07/2012 20:41 -0400
http://www.guardian.co.uk/commentisfree/2012/oct/05/les-pigeons-francois-hollande-entrepreneurs
Paris Luxury Apartment Prices Slide As French "1%"ers Dump Real Estate To Avoid Soaring Taxes
Back in July, when the news of the French foray into the "fairness doctrine" hit, and we learned of Hollande's plan to tax all those making over €1 million at a 75% tax rate, we said that "we are rotating our secular long thesis away from Belgian caterers and into tax offshoring advisors, now that nobody in the 1% will pay any taxes ever again." We should have also added that we are buying all the available long-dated call options in French real estate firms, with the imminent surge in luxury real estate dumping, once the French "1%" decide they want nothing to do with a regime that is hell bent on confiscating 75% of their annual cash flow at first, and slowly moving toward pocketing the balance of their assets (remember what we said in September 2011: that 30% global tax on all financial assets in a New Normal insolvent, and wealth redistributive world, is inevitable, and it is coming). Sure enough, the wholesale dump of luxury properties has now begun.
AFP writes: "A flood of top-end properties are hitting the market as businessmen seek to leave France before stiff tax hikes hit, real estate agents and financial advisors say. "It's nearly a general panic. Some 400 to 500 residences worth more than one million euros ($1.3 million) have come onto the Paris market," said managers at Daniel Feau, a real-estate broker that specialises in high-end property." But that would mean that in the New Normal real estate is once again merely a credit-bubble dependent, flippable asset: not a long-term housing investment, but merely one in which the pursuit of the greater fool is all that matters (not news to anyone here, but certainly news to all those who actually believe that 'housing has bottomed').
Turns out it hasn't, and just like the stock market, it was simply an alternative asset class for those closest to the ZIRP cost basis, to invest their money until Uncle Socialist comes a-knocking.
A flood of top-end properties are hitting the market as businessmen seek to leave France before stiff tax hikes hit, real estate agents and financial advisors say."It's nearly a general panic. Some 400 to 500 residences worth more than one million euros ($1.3 million) have come onto the Paris market," said managers at Daniel Feau, a real-estate broker that specialises in high-end property.
But if France is a loser, someone has to be a winner. For now it is the traditional real estate money-laundering venues.
The preferred destinations of those leaving are London, New York and Geneva, as well as Canada, Israel and Singapore, said Laurent Demeure, head of Coldwell Banker France.He also noted that Brussels remains a favourite of those older, who have already sold their business interests, and are looking to benefit from Belgium's lighter taxation of trusts to pass on inheritances to their children."Next year to have dinner with friends, instead of a taxi I'll more likely need to take the Thalys for Brussels or the Eurostar to London," joked Demeure, referring to high-speed trains that link the three capitals.He said he is currently receiving on average one request per day to appraise a luxury apartment or home.As a result, in the previous two to three months the price of large Paris apartments had slid by five percent.This is only the beginning as those who think Hollande was only kidding realize the folly of their ways. However, the biggest issue is that the encroaching taxation of the world's 1% by insolvent sovereigns is only just beginning. Very soon a comparable approach to the real estate assets of the uber wealthy will be adopted by virtually every other target of capital flows, just as we predicted a week ago, when we predicted that those countries which had heretofore been encouraging money laundering into domestic real estate, are about to see an about face, and going forward will instead pull a "Hollande" and proceed to tax the bejesus out of anyone with ultra luxury housing recently purchased on the territory of [you name it broke country]. To wit:What the NAR is saying is that for now go ahead and lift every offer on every duplex and triplex off Central Park. Your money is absolutely safe with us... this instant. But the second a broke Europe comes demanding reparations for endorsing 4 more years of Obama (something that was already documented), for destroying the Swiss banking industry, and for keeping the EUR much higher than it would have been had it not been the Chairman's 5 easing episodes, all bets are off.This means all European, Asian, and even local oligarchs may be sweating just a little bit, now that the winds have shifted, and suddenly what was considered safe and untouchable, has become fair game in the great "fairness" redistribution scheme that is the only game left in a broke and insolvent global town.So while for now the French exodus is benefiting the other legacy (and now thoroughly centrally-planned) free market venues, soon, just as in the case of the collapse of Swiss bank secrecy, all nations will realize that the Nash Equilibrium has been broken, and if everyone hikes taxes comparably, there is no place where increasingly more diluted money can escape to.Which ultimately is the endgame as more and more wealth is legally sequestered by the government so that it can be redistributed as a few politicians best see fit.
and one wonders whether Hollande will fold on the 7 percent tax as he did with the capital gains tax.....
'Les Pigeons' shooed off a key François Hollande policy with worrying ease
The French government has revealed a soft underbelly in yielding to a group of angry French web entrepreneurs
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President François Hollande. Photograph: Martin Bureau/AFP/Getty Images
If there is one thing the French government can't stand hearing these days, it is that they hate entrepreneurs. So much so that they just did a U-turn on a tax they had planned to implement on capital gains. It only took a few days of intense online campaigning from a collective of web entrepreneurs for the ministers of budget and the economy to repeal a measure nobody had thought particularly shocking, and which was at the centre of François Hollande's presidential programme. Indeed, it looks though as if the French government has yielded to the power of social networks.
A week ago, French web entrepreneurs set up a Facebook group calledLes Pigeons, aiming to defend entrepreneurs' rights. They now have 53,000 followers and counting. Their nickname comes from a French expression: a "pigeon" is a chump. In other word, French entrepreneurs don't want to be treated like chumps, easily fooled and easily abused.
At the heart of their fronde, as some have called it, is their outrage at Hollande's pledge to bring capital tax in line with income tax. At present, if an entrepreneur wishes to sell their company, or stocks, they will pay 19% tax on capital gains (to which is added 15.5% of social security tax). The new government had planned instead to follow the different strata of income tax: in theory, the bigger the capital gain, the bigger the tax (with a maximum 45% taxation).
This didn't go down well with entrepreneurs such as Marc Simoncini, founder of online dating website meetic, and Jean-David Chamboredon, head of an internet investment fund, whose opinion piece published in economic daily La Tribune gave momentum to the Pigeon movement. They proclaim that such a measure will kill internet start-ups, and to justify their campaign, they keep on quoting a survey by McKinsey stating that 20% of jobs in France are created in the internet sector.
In just a few days, web entrepreneurs' wrath spread on social networks and the original chump pun became a formidable lobbying force. And since we're in France, virtual protest has also had to materialise into a street demonstration. Les Pigeons called a protest this weekend in front of the National Assembly.
Everybody was taken by surprise by the viral blitzkrieg: the government, the traditional media and even Sarkozy's party, which could only gave its seal of approval after the battle took place. However, for many socialist MPs, it also looks as if what started as a childlike prank has got out of hand. For many on the left, there is no justification for Hollande's government to treat web entrepreneurs differently from other entrepreneurs, as is going to be the case. Besides, the entrepreneurs' anger is based mostly on fantasies: the dreaded taxation would only concern a tiny minority of them. Retiring entrepreneurs or those who reinvest their capital gain would for instance be exempted.
The pigeons' recriminations have even frightened some French entrepreneurs, such as Stéphane Distinguin, who confided in Libérationthat he sees them as a kind of Tea Party lobby, made of big egos and demagogue entrepreneurs who think that bullying and intimidation are the way forward. The chumps' shouting has certainly worked, let's hope that the French government will think carefully next time it considers giving in on measures for which it was elected.
http://www.guardian.co.uk/business/2012/oct/05/french-steelworkers-blockade-industry
French steelworkers warn blockade is a last stand to save the industry
ArcelorMittal gives government two months to find a buyer before it shuts last blast furnaces in historic industrial region
French trade union members blockade the ArcelorMittal steelworks in Florange, north-east France. Photograph: Jean-Christophe Verhaegen/AFP/Getty Images
In a valley lashed by wind and rain in the industrial heartland of north-east France, steelworkers blockading the local foundry see their action as a last stand to save their jobs, their factory, their region's economy – even the entire French steel industry.
As thunderstorms raged in the area this week, the symbolism was potent: the picket-line bonfire hissed and went out. The tent where protesters had taken refuge from the elements ditched its concrete anchors and threatened to blow away. "Let go of nothing," someone shouted as men grabbed tent poles. The others laughed.
There is little humour to be had these days outside the ArcelorMittal steelworks in Florange, where the "temporary" closure of two blast furnaces was declared permanent on Monday, with the loss of 629 jobs. Bitter jokes and anger are directed at the Indian-born, British-based Lakshmi Mittal, owner of the world's largest steelmaking company. "That man is a predator," said Edouard Martin, head of the CFDT union at Florange where he has worked for 32 years. "He's not an industrialist, he's a financier."
Martin, whose father worked at Gandrange, a neighbouring steelworks bought by Mittal in 1999 and closed in 2009, added: "I'm sick of hearing people say: you are a historic industry but one from the past, you have to move on, do something else.
"I say: you don't need cars or washing machines or TGV trains? Try driving a microchip down the motorway."
The ArcelorMittal plant at Florange has become the symbol of France's industrial decline and a litmus test for the future of steelmaking in Europe.
In the Vallée de la Fensch in the Moselle, whose rich iron-ore fields once made it the jewel of France's industrial crown, and where – for this reason – the earth is soaked with German and French blood spilled in conflicts over the last 140 years, Florange is the last steelworks standing. It's an industrial crisis that has echoes of the privatisations and plant closures that all but wiped out British steelmaking and coalmining in the 1980s and 90s. Unemployment in this area of France is already above the 10% national average, and the Florange plant, which supplies the car industry, has been hit by a fall in demand for new cars. Peugeot Citroën caused outrage in July when it announced it was cutting 8,000 jobs and closing a production line in suburban Paris, but it followed a first-half loss of €700m (£560m) and a 20% fall in sales in Europe in the first quarter.
Mittal is not shutting the entire site, but the so-called "hot line", the blast furnaces, where the iron ore is melted to produce steel, and the neighbouring coke plant.
Today the two furnaces, closed "temporarily" last year, are idle. The nearby heating stoves are on hold, emitting wisps of smoke into the grey sky. "It's a sad sight," says Maurice Nicotra, 47, surveying the abandoned plant. "It's dead here now. Mittal told us he would put money into our steel industry, but look where we are."
France's Socialist president, François Hollande, who visited Florange during his election campaign this year, and Arnaud Montebourg, the minister for industrial renewal, have taken up arms on behalf of the steelworkers and pledged to find a buyer for Florange's furnaces. However, Mittal, who blames falling global demand for steel and high production costs for the closure, has given them just two months to do so, at a time when Hollande is grappling to reduce the public deficit by €30m and reverse rising unemployment that has topped three million.
"We're all afraid. Over the years all the plants have closed here. If this one goes it won't be easy to find work," said Cyril Colpin, 31, a third-generation steelworker employed at Florange since 1999. "It's not that we don't make money here, it's that we don't make enough money for Mr Mittal. It's about maximum profit, not people."
Colleague Ben Khachei, 38, employed at Florange for 15 years, agreed.
"We're attached to steelmaking in this region. We identify with the industry. There are people here whose family have worked in steel for three or four generations. When Mittal took over the plant he promised he'd invest and preserve our jobs. We just want him to keep that promise. What can I say to a man motivated by money? I can only say, behind this steelworks are workers, families, a whole region. I can also say we will always need steel." While agreed on the need to save Florange, the plant's main unions, the CFDT and Force Ouvrière, disagree over how.
Walter Broccoli, the local Force Ouvrière secretary general, "doesn't believe for one minute" that the Hollande government will find a buyer and wants the plant nationalised. "We want the government to declare steel a strategic asset for the country like electricity and petrol and requisition it," he said. "Oh, and not give a penny to Mittal."
He added: "They call us dinosaurs but the steel industry here has always been at the forefront of new technology. I'm not optimistic. I think we're already condemned, but we have to fight to save Florange because if we don't the whole valley will suffer the consequences."
Back in the leaking tent, Martin says protesters will maintain the blockade. "All eyes are on Florange. People are watching our battle to see what happens. They know if we lose, there are no guarantees for anyone. We're a historic industrial area, but for 40 years they've treated us like sheep as they shut our factories. This used to be the jewel of French industry. We had crises but survived them because we were willing to adapt to the market and we produced good quality steel.
"If we lose this battle, it's a bad sign for the rest of Europe's steelworks and will boost the multinationalists who will think they can do anything they want."
He added: "People say we are more expensive than Chinese workers. It's true. But those same people forget they're also more expensive.
"Everything and everyone is more expensive in France than in China, so what are we to do – close down Europe and go elsewhere where everyone is paid $80 a month? It's not about pay, it's about the society we live in. Go tell that to Mittal."
Henri Blaffard, a vice-president of ArcelorMittal Europe, told the local Républicain Lorrain newspaper the closure was due to a "serious crisis in Europe" that had led to a 25% reduction in demand for steel.
"We cannot produce when there are no orders," he said. "The overcapacity in Europe is recognised by everyone the markets expect us to adapt."
He said the steel company had invested €2bn in other French plants at Dunkirk and Fos "because they were more competitive".
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