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Everything you always wanted to know about France |
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A gentle windrush of Summer - Newsletter 111 From The South Of France Three glasses of red wine - for my health - and walking with dog through the vineyards of early August - no need for dinner, pears along the field borders, juice dripping grapes, handfuls of blackberries from the bushes and making sure the fig and quince will be ready so September walks will be well fed. Feeling and smelling the wind swimishing through the bamboo along the river bank and drawing fingers through path side garlic and anis. Late evening, hot - happy walking hard and fast - the last time it was May and I had heart attacks walking this road, it took longer then to get home. A quick look over my shoulder... For me July 2005 is the start of a new life. It marks the days when a few of the things I have seen develop over the last 50 years begin to form into a crystal which is taking shape from a cloudy liquid. There are over 1,000 articles in our archives at... http://francevoila.com/archives/ Archives Our holiday/vacation rental site is at... http://rentalsfrance.com/ RentalsFrance We advertise holiday villa and gite rentals in most parts of France, established in 1998 we are one of the most prominent and successful villa rentals sites on the Internet - and aim to stay that way. Do browse through our websites and please use the advertising links, they help pay for the site. ======= In this newsletter 1. Extra Council Charges With a Property 2. SIPPS - Pensions and Property Abroad 3. Buy To Let 4. Villa Rental Prices Plunge 5. French Health Care for Expatriates 6. Changing holiday habits hit homeowners 7. Forget the games - think fertility, French are told 8. French ready for a new revolution ======= 1. Extra Council Charges With a Property Dear Tony, I have just received your latest newsletter and send my best wishes for your continued well-being following your heart attacks. I have received your newsletter for many months now, it is always informative and interesting, which is why I wondered if you could answer, what will appear like a very basic question. We completed on our house purchase in December, at the time the Notaire mentioned about the 2 taxes we would pay Fonciere and D'habitite (forgive the spelling!) however, we have today received a bill for 6 months household rubbish collection (as I have translated it) and wondered if this formed part of one of the taxes, as no-one has ever mentioned such a bill could be expected? I do hope that you might be able to answer, or point me to someone who will be able to assist. Many thanks & best wishes Catherine == Hello Catherine The two property taxes, habitation and fonciere, are for every house, but your local Mairie can have additional charges for waste collection and other services - many Mairie supply the water so they will charge for this as well - it is like gas and electricity. If you rent your house you may have several other taxes, CSG, sejoure, tourism etc as well as declaring all income for income tax. You will learn in France that no one ever volunteers information to you - it is "assumed" that you know these things. Bonne Chance Tony ======= 2. SIPPS - Pensions and Property Abroad A hot topic is the opportunity to use the tax benefits of pension funds to be invested in second homes or rental properties - there will be a lot more about this but here is an clear article I saw this week in the UK press... == So how simple will it be to buy a second home through your pension? Copyright Daily Telegraph. Not simple at all, if you were hoping to buy abroad, writes Lorna Bourke. The complexities of foreign tax regimes mean many pension providers may not offer this option From April next year people will be able to invest in residential property through their pension fund. This includes not only buy-to-let properties in the UK, but holiday homes abroad. Wish you were here: Tuscany has property laws similar to the UK's This effectively means that higher-rate taxpayers will only have to fund 60 per cent of the purchase price, the remainder will be topped up by the Government through tax relief. In addition, any income derived from the property can be added to the pension plan and allowed to grow tax-free. There will be no income tax to pay on this rent, which would not be the case if the property was owned outside of a pension scheme. Not surprisingly, pension consultants, mortgage brokers and providers of Self Invested Personal Pensions (Sipps) are being inundated with inquiries from clients wanting to know how they go about buying a holiday home abroad through their pension scheme. "We estimate that around a third of our existing clients will want to do this but that doesn't take into account the number of people who will start up a Sipp specifically to buy foreign property," says David Baker of James Hay Trustees, the biggest administrator of Sipps in the market. He reports a flood of inquiries, not just from those wanting to buy a foreign property, but also from individuals who already own a property abroad, and want to know how to transfer this property into a Sipp, to either use the rental income to boost their pension or to release cash from the scheme. This is likely to be where much of the initial demand will come from. According to industry estimates, 2 million Britons currently own a second home in the overseas property market. Datamonitor research shows that, of the total number of overseas properties owned by Britons, 37 per cent are located in Spain and 25 per cent in France and these are the areas on which Sipp providers are likely to concentrate their efforts first. There are an estimated 100,000 existing Sipp holders but the number could easily treble when the new regulations take effect on April 6 next year. A recent survey by the magazine Pensions Management shows that 30 out of 40 Sipp providers offer customers the opportunity to invest in the full range of eligible investments, which currently includes commercial property. The majority of these companies have already decided to widen this to include residential property in the UK, when the rules change in April. But not one has made a firm commitment to offering foreign property. Ian Dawson of the Sipp administrator Wolanski says: "We would like to offer this service, but it could be very expensive. We have had inquiries about buying property in places like China, Peru, Egypt and Costa Rica. Our attitude is likely to be: pay us £5,000 up front and we will check it out for you." Detailed regulations on how pension funds would in practice purchase overseas property have yet to be published, and are not expected until September this year. But already a number of potential difficulties have come to light. One of the major stumbling blocks is that while property assets held in a pension fund will be shielded from tax in the UK, they may still be liable for taxes overseas. For example, property abroad held in a Sipp will be free of UK capital gains tax and there will be no UK income tax on any rental income derived from this asset. However, property owners may have to pay local income, CGT and inheritance taxes. Nigel Bunting of Suffolk Life, another Sipp provider, says: "As Sipp administrators we are having to investigate the tax and legal situation on a country-by-country basis - they all have different tax regimes. Hopefully, we will have something up and running by next April, but at the moment it is far too early to say in which countries we will accept property investments." Part of the problem is that the property will be owned by the pension fund. These are essentially trust funds, but this structure is not recognised in most of Europe. John Lawson of Standard Life says: "There are a number of flies in the ointment, one of the main ones being the problems of owning property through a trust." However, he points out that the Netherlands and Italy recently signed a convention recognising trust funds. This could make Italy an attractive place to purchase a home, particularly as there is no CGT payable on property in this country after five years of ownership and effectively no inheritance tax. Bunting also points out that countries like Cyprus, which have a similar tax and legal regime to the UK, could be major beneficiaries of the new rules - if a Sipp is tax-efficient in the UK, it is likely to tax-efficient in Cyprus. Standard Life does not see the trust situation as insurmountable. "With commercial property we set up a holding company and the pension fund owns the shares in the holding company," explains Lawson. "We can operate a similar structure for foreign properties but it will add to the costs." Another problem, affecting those who already own property abroad, is that if they transfer it into their pension fund they will almost certainly trigger a taxable capital gain. This is because they will have to sell the property and buy it back through the pension fund. And it is extremely unlikely that property owners will be able to dodge CGT by undervaluing the property. The new Finance Act regulations require Sipp administrators to be entirely responsible for complying with the law. If they do not, they are likely to have their status as Sipp administrators removed. Another potential problem is that many people who already own holiday homes in Europe do not declare their rental income - either in the UK or in the country where the property is situated. This is, of course, illegal tax evasion. But since the Inland Revenue admits that it has no idea how many UK residents own properties abroad, the likelihood of the owner being found out are slim. But no pension trustee is going to be prepared to turn a blind eye to tax evasion, so there could be income tax disadvantages in owning through a Sipp as all income will have to be declared. Income tax is generally higher in Europe than in the UK. Another major problem is that in most of Europe there is a purchase tax paid on the value of the property - similar to stamp duty in the UK. In order to minimise the tax paid, under-declaration is widespread throughout the Continent, and buyers and sellers commonly convey property at a declared value of less than 50 per cent of the actual price paid. But here too pension fund trustees, who will technically own these foreign properties, are not going to be prepared to connive with this situation. "Under-declaration will not be acceptable," Lawson warns. "Properties will have to be valued by a qualified valuer and where the property is rented out, managed by a professional agent, again adding to the costs." If you use the foreign property for your own holidays, you will either have to pay a commercial rent or you will pay income tax on the deemed "benefit in kind". Lawson is hopeful that if the Sipp providers get together they can persuade the EU tax authorities to negotiate reciprocal tax agreements to remove the potential tax liabilities in the countries where many Brits own second homes. But this is not going to happen overnight. Mike Boles, a mortgage broker with Savills Private Finance, which specialises in foreign property loans, points out that under a Sipp arrangement it will be possible to borrow up to 50 per cent of the value of your pension to finance a property purchase. But he says many lenders may be reluctant to arrange such loans. This is because it will be the trustees of the pension fund, or a holding company, that will own the property, not an individual. This creates a great deal of uncertainty for lenders, Boles says. For example, who will be liable if the rental income from the property dries up, and there is not enough cash or easily realisable assets in the pension scheme to pay the mortgage? With so many potential problems with holding foreign property in a Sipp, it will be a struggle for providers to market a viable product. Baker confirms that James Hay has yet to decide whether to offer the option of buying property overseas. "One of the issues is that the detailed regulations have not yet been published and we don't know whether we will have to hold the property in our name in the trust. If we are personally liable as trustees then that will make us cautious." He claims that the increased costs of such deals mean it is unlikely to be worthwhile offering this service to customers with a small apartments in Spain. Only those with more substantial property portfolios may benefit. But as Ian Dawson of Wolanski puts it: "There may be problems but at least it has got people interested in pensions - everyone seems to be talking about it these days." ======= 3. Buy To Let Although property prices on average in France increased by 15% last year, there is still a lot of growth to come. You can seem to get a lot more for your money in Bugaria, but the prices are already rising fast in Croatia and other new markets and these places are completely different to the safe, stable and secure countries like France Spain and Italy. France has a high "comfort factor" and has been the preferred destination for travellers and home seekers since Queen Victoria stayed in Menton 150 years ago. It is barely a handful of years since many of the new "investment areas" were murdering their next door neighbours because they went to a different church, it is 250 years since they did that in France. Interestingly prperty investments are now made both for income now and for future growth. This article gives a lot more detail and shows the change of investment criteria for income. == By Lorna Bourke LONDON (Citywire) - Buy-to-let investors remain remarkably optimistic in the face of a marked slowdown in the property market and have been increasing the size of their portfolios, according to research carried out by the Association of Residential Letting Agents (Arla). The average size of buy-to-let portfolios has risen from 4.9 to 5.7 properties since the previous quarter. This is a steady increase over the past year, from an average of 4.1 properties in June 2004. Arla says that, underlining the stability of the rental market, 97 percent of all respondents report that, although the majority of tenancies agreed are for an average initial period of just over nine months, most tenants stay on for an average total of 17 months. This is surprising since in some areas of London and the South East there is now a glut of rental properties and it is a tenants' market. It is possible that tenants find that they can negotiate a cut in rent in return for signing a new lease, as landlords are anxious to keep good tenants. Residential landlords are split fairly evenly between those who look for both a rental income and capital appreciation (47 percent) and those investing solely to create a nest egg for their future, to be realised nearly 20 years down the line (44 percent). This near 50/50 split has changed only marginally since the last quarter, while only one in fifteen landlords have invested solely for the rental income. The average buy-to-let investor expects to hold properties for 17 years. Traditionally, professional property investors look at yields and invest for income with capital gains being the icing on the cake. However, the lack of concern about rental yields could be explained by the fact that the average experience of buy-to-let investors is only 5.3 years as a landlord, while over 70 percent have two years' experience of residential investment. "One of the significant advantages of buy-to-let to the private rented sector is the long term approach of the 21st century landlord," commented Adrian Turner, chief executive of Arla. "From the beginning we knew that the concept of buy to let attracted the financially mature investor. Once again this is being illustrated by the clear understanding shown of the long-term, contra-cyclical nature of residential property investment. This allows the rental market to act as a safety valve for the whole housing sector," Turner said. Almost half of all investors responding to the survey, some 46 percent, live in London and the South East, with almost a fifth, 19 percent, coming from London itself. The Midlands and the South West produced the next highest proportions of respondents at 13 percent each, followed by the North East with 9 percent and the North West with 7.3 percent. Meanwhile property specialist Assetz has put together a dossier of what it describes as 'key investment criteria' in various countries to form a property investment tracker. Assetz is recommending investing in France, where minimum deposit is only 15 percent, advises caution in Bulgaria which is riskier, and warns investors to avoid Florida because of higher interest rates in the US. Assetz says that as France's minimum deposit requirement is only 15 percent it offers investors the opportunity to enjoy significant returns on a minimal initial investment. "Yields are stable at 7 percent or so and leaseback schemes offering lower guaranteed rental income are available at many locations where the government is keen to attract tourism into the area." Assetz claims that with capital gains last year at 15 percent, total returns on cash invested in France are around 92 percent. "Cyprus is also currently a hotspot for overseas investors, with prices in Southern Cyprus rising by 18 percent in 2004 and are expected to rocket further with entry to the Euro beckoning in 2007/8," says the Assetz report. "Rental yields remain at a confident 8 percent with a year-round rental market in some parts of the island, accumulating a total 72 percent return on investment." Investors looking to cash in on the Bulgarian property boom will need a minimum deposit of 30 percent of the purchase price. "Investors should be cautious in Bulgaria's immature market," warns Stuart Law, managing director of Assetz. "Property prices are growing significantly in the more established areas such as the Black Sea coastline and the major ski resorts, but many of the apparently 'bargain' deals citing properties for under 30,000 euro (20,700 pounds) will be located in the more rural areas and are unlikely to enjoy such high growth rates and certainly not high rental yields," Law warns. He points out that although capital gains last year stood at an impressive 20 percent, those considering investing in Bulgaria should be aware that the French and Dutch 'no' votes in the recent referenda on the EU constitution could have affected the country's chances of joining the EU as planned. "If Bulgaria does not join the EU, prices are unlikely to continue to rise at the current rate," says Law. He also warns against investing in Florida. "I would recommend caution in America. The property boom was based on extremely low interest rates, which are now rising in an effort to turn the heat down on the housing market. Buyers are realising a period of instability is pending, which will trickle down to affect the resale market in the States fairly rapidly." Law says that investors who would rather keep their money closer to home would do well to consider a student property, with yields of 8 percent. This is strong in relation to the rest of the UK buy-to-let market, which currently stands at about 5.8 percent. "University towns have enjoyed big rent increases over the past five years, and with Government incentives to boost student numbers to 50 percent of all 18-30s by 2010, this growth rate looks set to continue," says Law. However, all buy-to-let landlords in the UK should be aware of the Homes in Multiple Occupation requirements which come into force in October of this year. This affects all rentals where two or more unrelated people share accommodation and the legislation could affect capital values of buy-to-let properties. === 4. Villa Rental Prices Plunge Rental rates are plummeting Mark Hodson explains how to find a summer bargain - Sunday Times July 17 2005 If you've still not booked your summer holiday, maybe this will tempt you. How do you fancy a whopping 80% discount on a villa with a private pool near Biarritz? I know what you’re thinking. There’s a catch. Except there isn't. If you get in quick, you can snap up a five-bedroom house with a huge pool 14 metres long just a short walk from a sandy beach on the French Atlantic coast. It sleeps 11 and, for the week beginning July 23, the rental-only price is down from £2,675 ... to just £539. This house available through Thomson is one of a raft of attractive properties on offer at knock-down prices this summer. Tour operators are so desperate to offload unsold stock that even during the school holidays you can get huge reductions on villas in destinations such as Tuscany, the Algarve, Andalusia, the Côte d’Azur, Corsica and Sardinia. The reason is simple: so many people have been buying holiday homes that the market is now flooded. Emboldened by the domestic property boom, thousands of Brits have been wading into the market, spending thousands on renovations and then trying to recoup their outlay by renting out their properties. This has caused havoc in the travel industry. Operators had become accustomed to an annual game of musical chairs in which, not long after Christmas, families would book villas for the months of July and August to ensure they didn’t miss out on the best properties. So the game has been reversed: there are now too many chairs and not enough players. Tour operators are panicking. Thomson, which recently surprised industry observers with its decision to sell holiday homes through some of its high-street shops, is drastically cutting the number of villas it offers for rent. Next year it says it will streamline its entire villa programme across Europe. This may be the last summer when holidaymakers see 80% discounts, it says. However, Richard Downes, managing director of Iglu, one of the UK’s largest villa agencies, thinks prices for renters will stay low, explaining: More and more are being built and renovated all the time. He says that over the past six months he has been inundated with requests from owners keen to rent out their properties. He now plans to set up a new wing of the company to let owners advertise villas direct to the public. The result: yet lower prices. As prices tumble, the quality of villas increases. Downes says many renters now regard heated swimming pools and ensuite bathrooms as minimum requirements rather than added extras. Owners are happy to comply. People want their holiday homes to look good, so they’re spending a lot of money on them and renters are benefiting, he says. The best of the bargains this summer are in France and Spain. This is partly because of their popularity among British buyers and partly because in the case of France prices tend to be quoted without flights (either accommodation-only, like the Thomson example above, or including a short Channel crossing from Dover to Calais), so a large drop in the villa price has a greater effect on the overall quote. However, even in destinations further afield, where flights take up a bigger chunk of the overall price, it is possible to find hefty high-season discounts of up to 40%. === 5. French Health Care for Expatriates Several international surveys have described French health care as among the best in the world. This is available to everyone resident in France - French national or foreigner and whether salaried, working as an independent artisan or professional, unemployed or retired. For more information... CMU or Universal Health Cover The enactment of Couverture Maladie Universelle (CMU or Universal Health Cover) in January 2000 means that all resident in France are obliged by law to join the State Health system. In local terms, this means affiliating to the CPAM or Caisse Primaire d'Assurance Maladie. There are penalties for residents who do not join, although such penalties have yet to be enforced. The Value of CMU CMU is important for expatriates, whatever their country of origin, but especially so for EU citizens. All EU countries have highly developed systems of social security, paid out of general taxation. Among other functions, EU social security ensures that no one is denied access to proper medical treatment for want of money. The Advantages of CMU Many national systems lack choice - and patient service - so these State offers are often supplemented or replaced by Private Medical Insurance (PMI) schemes. Overseas PMI suppliers can be expensive and have considerable disadvantages compared to the French system of national health assurance: Nearly all exclude pre-existing medical problems Few are comprehensive, most excluding GP fees, prescription charges for drugs and pills, and dental and optical care Premiums are high, and rise rapidly with age, and companies can refuse insurance if the claims experience is poor. None of these drawbacks apply to CMU and its associated Sante Complementaire or Top-Up insurance. The Basic System of CMU Like others, France uses taxation to fund health care for residents but unlike Britain for example, France operates an insurance system. This is a mixed system with the bulk of cover coming from State assurance, and top-up cover coming from mutuelles or private health care insurance companies. All medical facilities are part of the State system but you choose your own doctors, specialists, medical or hospitals. You pay directly for medical treatment. Up to recently, you would receive in return a feuille de soins, a brown receipt form offered by doctors, pharmacists and hospital staff. This is recognised by Caisse Primaire d'Assurance Maladie (CPAM) as a legitimate medical payment. More commonly now, your Carte Vitale (attesting membership of CPAM) will be register your treatment and payment, and reimbursement will be automatic. You are reimbursed by CPAM according to your income level and the Tarif de Convention (or approved treatment cost) currently in force. If you have a Carte Blanche or top-up insurance card from your chosen mutuelle with its sante complementaire, your treatment will be recorded and the appropriate balance reimbursed. What CMU Provides The CMU decrees that on average 70% of the cost of medical treatment will be reimbursed to you and your family but the exact figure received depends on: the treatment needed and its costs and the income of the patient. It is the interaction of these two factors that determines the specific level of CPAM repayment: 1. The agreed price of the treatment is set by the Ministry of Health and known as Tarif de Convention. Repayments range from below 60% of this amount to full repayment of 100%. This is the level for: major surgery major diseases such as cancer disability and other long term care; this is especially important as this can be a prohibitive cost if arranged through PMI. 2. The income levels of you and your family. There are taxable income levels below which 100% of the Tarif de Convention is reimbursed, based on your status as a single person/couple/couple with dependants. Tariffs for these categories can be supplied by the CPAM offices. What CMU Will Cost No payments are due from low-income singles, couples or families (tariffs available from CPAM). Low-income families, including many retired expatriates, are entitled to a free top-up policy. For people above the minimum income levels, the contribution (cotisation) is 8% of the difference between the appropriate family threshold level and taxable income - marked on the French income tax return in the row with two asterisks as relevant fiscale de revenu. CPAM will make these calculations. Expatriates who have come to live in France, whether working or not, need to prove their income to CPAM. This is most easily done with a French tax return. However these tax returns are submitted one year in arrears, in February each year, so those who have not declared themselves as tax residents need to show evidence of income. This can be another country's tax return, or evidence of income such as payslips, pension statements, or earnings from capital such as bank deposits, coupons from government bond holdings or share dividends. === 6. Changing holiday habits hit homeowners Holiday homeowners have a concern over changing holiday habits and second-home ownership. Britons now choose more short breaks and fewer main holidays in the UK the lure of low-cost air fares now embedded in the nation’s psyche making the often strict Saturday-to-Saturday policy of a holiday let look less attractive. Also damaging is the huge increase in the number of people buying a second home. Many of those people are happy for Aunty Betty, sisters, cousins and numerous friends to stay there, nd most will stay for nothing. But even if they pay something, they are all people who are no longer renting from the main holiday-home sector. Then there is planned intervention by the Government, which intends to create a rural housing commission this summer with a remit to devise ways of curbing the spread of second homes. Aimed partly at easing pressure on first-time buyers priced out of the market by second-home investors, it will consider the introduction of new planning controls and higher rates of council tax on second-home and multiple-home owners. Stepping into this situation for the first time are Brian Burrows, an architect and builder, and his wife Elaine Moran, a former residential home manager. Last October they decided to leave the West Midlands, their home for 40 years, for the Western Highlands of Scotland to convert a lock keeper’s cottage into a home and an adjoining holiday let. We wanted to make the place very comfortable and didn’t do anything on the cheap, says Elaine. Their investment seems to have paid off; after their Easter opening, one guest, a retired banker from Melbourne, rated the cottage in the top three among dozens he had rented across Europe. Seeing his comments in the visitors’ book was like reading a good school report, says Elaine. But viewing the cottage after their sixth guests left four adults and two small children from Leeds was worse than being summoned to the head teachers study. The damage, estimated at more than £500, reduced Elaine to tears. It included an iron burn on the carpet, cigarette burns on two duvets and a bedside table, a broken table lamp and a soiled mattress which had to be replaced. Brian says: It was pretty hard to face after all the effort we had put in. But you just have to keep your faith in human nature and hope you never have another family like them. Although some owners now request a security bond from holidaymakers, John Hutchison, property manager of English Country Cottages and Country Holidays, which offers 12,500 properties for rent in Britain and Ireland, says his organisation has resisted the trend. It is a big turn-off for the consumer and instead we advise homeowners to take out appropriate insurance. The British market is still fairly buoyant, unlike the downturn in France as a result of the growing number of British second-home owners there. He also believes that the changes in pension regulations due to take effect next April, allowing residential property to be part of a pension plan, will reinvigorate the market for new owners === 7. Forget the games - think fertility, French are told The Guardian The French are trying to find reasons to be cheerful. They are being urged to consider all the good things France has going for it in order to dispel the pessimism which has pervaded the country. These include the TGV, the health service, happy family life "demonstrated by its rising birthrate" and provincial cities such as Marseille, Lyon, Toulouse and Bordeaux. The loss of the 2012 Olympic games to London and the rejection of the European constitution provided two sharp blows to French morale, and high unemployment, a stagnating economy and dissatisfaction with political leaders, particularly President Jacques Chirac, have done nothing to lighten the gloom. Now Le Parisien newspaper has produced a three-part series to put a sourire (smile) back on French faces. "There are reasons to hope, more numerous than one would imagine," the paper declared. "While the French are often arrogant, they also like big depressions and running themselves down. There are certainly reasons to despair ... unemployment has undermined French society for 30 years, parents feel that their children are not doing as well as them ... factories close ... Europe works badly ... the political class is often supported locally but judged incompetent, deaf, and even corrupt nationally. Has everything become so black in this beautiful country of France?" it asks. The paper gives a number of reasons to be cheerful. Family life is happy, reflected in the fact that the country has the highest birthrate in the EU with 1.88 children per woman. The French live to a grand age, 76.7 years for men and 83.8 for women, one of the highest life expectancies in the world. Its public services are the envy of the world, Le Parisien says, citing the TGV high-speed train, the motorway network, telecommunications and electricity systems and the health service. The paper claims that France has the second biggest agricultural sector in the world. Then there are its provincial cities, which help to attract 77 million tourists every year - more than anywhere else in the world "and boosting the economy by 35bn euro annually". The depression in France has not been helped by the relative success and prosperity of its traditional rival, Britain. Yesterday, the likely future presidential candidate Nicolas Sarkozy rubbed salt into national wounds and managed a dig at President Chirac by telling members of the UMP governing party that Margaret Thatcher and Tony Blair were his heroes. "In the 1970s Britain; was finished and no longer counted on the international scene. Who could have guessed that in 30 years Great Britain would become a beacon in the world?" === 8. French ready for a new revolution Chirac the focus of discontent in a country riddled with self-doubt and not in the mood to party on Bastille Day... Kim Willsher in Paris The Guardian Today should be Jacques Chirac's big moment. As the standard bearer of France's republican tradition he oversees an impressive parade on Bastille Day. Horseguards, soldiers, pilots, police officers and firemen will march down the Champs Elysees accompanied by as much hardware - tanks, rocket launchers and fighter jets - as France's military might can muster. But, even in his Bastille Day best, Mr Chirac cannot ignore the fact that France is deeply fed up, and with him above all. The latest poll shows that only 32% of French people have confidence in the president, while the Parisien newspaper said this year's July 14 celebrations "smell like the end of Chirac's reign". That France is not in the mood to party is clear. But this is more than a nation in economic and political depression. It is a crisis that some analysts believe could turn violent. Commentators evoke May 1968, when students rioted through the streets of Paris setting up barricades and tearing up paving stones to hurl at the police. Everyone got angry, went on strike and then went back to work or study. It did not change much, but it remains a seminal moment of that generation. Many believe France has another crisis coming. For 30 years the country ignored warnings that its system needed an overhaul, that it could not sustain its massive public expenditure, enormous bureaucracy, expensive public services, high taxes and crippling social charges. Paradoxically, French people often say they want changes, and then bring the streets to a standstill when their politicians try to introduce them. Instead of pressing ahead with difficult reforms, ministers have all too often taken the soft option of retreating. "The French do not change things by consensus, they change things by conflict," said Pascal Perrineau, a professor at the Paris Institute for Political Science. "The French model is no longer accepted as universal because it doesn't work. The French are at a crossroads. They know they must change and adapt to a more liberal, global world, but they are hesitating and it may well be that they need a push. From time to time a man of history, like Bonaparte and de Gaulle, comes to force us to accept change, but we have a revolutionary history which makes this period particularly risky." But what exactly is wrong? Why is the home of a 35-hour working week, long holidays, generous benefits, fine gastronomy and TGVs riddled with self-doubt? Rejection of the European constitution by French voters in May, and the failure of Paris to secure the 2012 Olympic Games hit the country hard. Accusations that London had "cheated" led to more self-flagellation: "We don't even know how to lose gracefully," said a morose Frenchman. But the French were already demoralised. The constitution and Olympic failures simply tapped into a deeper malaise about what it means to be French in the 21st century. Mr Chirac personifies this discontent. What, the French ask themselves, has the president ever done for them? Charles de Gaulle restored pride in post-war France, François Mitterrand left an impressive cultural legacy - the Louvre Pyramid, the National Library, the Bastille Opera house. Sleaze and scandals Mr Chirac will be remembered more for the sleaze and scandals that have mired his decade in power. Bereft of direction, the Chirac presidency will go down as the era of broken promises, or "words, words, words" as one analyst put it. Angela Faragasso, who runs a bar in the ethnically mixed area of Menilmontant in Paris, believes the country's problems date from April 21 2002, when French voters put Jean-Marie Le Pen of the Front National into the second round of the presidential election. "We didn't vote for Chirac because we wanted him as president but because we didn't want the other guy as president. It wasn't a real choice," she said. Most people were horrified by Mr Le Pen's success, but many voted for the extreme right and left in the first round "to make a point", to give the political elite a good kicking. Instead it was an unrivalled example of shooting yourself in the foot. Mr Chirac made fighting unemployment a mainstay of his manifesto, but one in 10 of the population is unemployed while an estimated quarter of all youngsters are jobless. The celebrated but hugely expensive health service is almost bankrupt. Farmers complain they are being squeezed out by unreasonable and incomprehensible demands. Small busi nesses say there is no incentive to succeed. Isabelle Coulet, 45, who recently set up AIM, a film production company, says employing staff in France is out of the question when social charges mean paying another 60% of an employee's salary to the state. "I'm French and I want to stay in France so I pay my taxes and charges and I'm hyper-honest about it. But I can understand why people cheat or go abroad. The current situation in France is catastrophic," she said. The gloom and scepticism is worsened by a sense that the political elite clings to power and privileges with scant regard for ordinary voters. This was highlighted by recent scandals over luxury grace and favour apartments given to politicians and civil servants. Stephane Rozes, assistant director of French opinion pollsters CSA, said: "The French look to their leaders to take control, but in the last few years they've done nothing but pass the buck. They say it's not our fault, it's because of Brussels or globalisation or whatever. People feel the politicians enjoy privileged positions but refuse to assume their responsibilities." Mr Rozes said polls indicated they would accept change if it was of general benefit "but not if it's for individual profit". Aziz Senni, 28, who runs his own taxi firm in the suburbs of Paris, is a Frenchman of Moroccan origin who employs around 80 drivers."I'd certainly take on more but I can't afford to. For every euro they get in their pay packet I have to pay another euro to the state. "Unemployment is the biggest problem especially among youngsters from immigre families. These young people find their olive skin a real handicap here and a lot of them don't have much hope of getting jobs.That's why people like me start up our own businesses." The sense of crisis has seeped out of the corridors of power, through the cities and towns into "la France profonde", where France's famously strident farmers also feel unloved. Rural heritage "Nobody seems to give a hoot if we produce anything or not. In fact they're prepared to pay us not to produce anything," said dairy farmer Francois Fihue. "We're proud of our work and don't want to be paid for not doing anything. We just don't know what French society, what French people, want from us. They go on about France's agricultural and rural heritage, then they sue us because the cock crows too early or the tractor makes too much noise or our farms are too smelly." It is hard to find anyone feeling cheerful. Rebecca Martin, a 25-year-old former Sorbonne student from Britanny, said she and her student friends were pessimistic about their job prospects."There's a growing feeling that there's no point studying because you won't get the job you want. I shouldn't say it but the French are basically lazy. They want to get paid more for fewer hours and keep their benefits and jobs but they don't want to work." Three years ago Maxime Brunerie, described as "emotionally disturbed and with neo-Nazi links", took a pot-shot at Mr Chirac as he was reviewing the troops on Bastille Day. This year with another 22 months of his mandate to run he has been fending off political snipers - many of them from his own ranks - even before the ceremony begins."Chirac is weak and Chirac has weakened France," said Richard Liscia, director of the health industry newspaper, Le Quotidien de Medecin. "When France voted "non" to the constitution they voted for a question that wasn't asked: Do you like Chirac?" I really do try to reply to all mail, most are questions about property or living in France. I publish comments in this newsletter which I believe are of interest and may help find answers to questions put by others wanting to come to France. By linking the points I make to our weblog at http://www.fblog.com FBlog I hope readers will go to the adverts which help support our overheads. Our business is our advertising sites for property and rentals at http://rentalsfrance.com/ RentalsFrance http://francevoila.com/ France voila Please make use of these sites for rentals and sales (and do visit the adverts). |
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