The not-so discreet class war of the French financial elite



The Robin Hood Tax made the front page of the Financial Times at last yesterday morning. But disappointingly, it reported the opposition of France’s central bank chief, Christian Noyer.

As the interview with him, deeper in the paper, shows, Noyer is a class warrior deeply at odds with the views of the French electorate.

He advocates deeper and deeper cuts in state spending and ‘labour market reforms’ that are code for worsening workplace rights – but protecting the bloated finance sector at all costs.

He said of government budgetary policy:

“The effort must now be focused entirely on expenditure. There must be an acceleration of the reduction in expenditure – that means a reduction in absolute terms.”

The prominence given to Noyer’s views is becoming par for the course in the financial sector and its house journals.

There was no such front page splash when the German elections returned a Bundestag where all four remaining political parties are in favour of a Financial Transactions Tax, and the ejection of the anti-FTT FDP led to the Robin Hood Tax gaining centre stage in the coalition talks.

The top French banker displays a staggering lack of perspective.

Five years after his mates on the different planet of high finance trashed the global economy and cost hard working taxpayers trillions in bank bailouts, Noyer suggests a broadly-based FTT would:

“Trigger the destruction of entire sections of the French financial industry, trigger a massive offshoring of jobs and so damage the economy as a whole.”

Perhaps he expressed similar views about the impact on French manufacturing. But don’t count on it.

Noyer’s position is hardly even news. The French financial sector, finance ministry and central bank have always been opposed, even though the only actual problem they can point to is the impact on the ‘repo’ market. He says:

“The most important concern … [is] … the risk of the total drying up of repo markets. … the risk in terms of financial stability would not be negligible.”

That problem could be solved by making minor changes to the way debts are insured overnight and so on. Most repo transactions are in fact speculative, not the vital hedging elements of the financial markets their advocates claim.

But why solve the problem when you can use it to smash the entire tax and save your financial fat cat pals billions in bonuses?