French shipping billionaire Rodolphe Saade said his company is ready to contribute more tax to help repair France’s stretched public finances, indicating that resignation may be setting in among some of the country’s wealthiest citizens to a shift in government policy.
“If there is a solidarity contribution by companies that generate profit, CMA CGM would pay its part,” he told reporters Monday. “We’ll do what we need to do, but as for me, my role as CEO and chairman is to make sure that CMA CGM continues to grow.”
Faced with widening budget deficits, France’s new prime minister, Michel Barnier, indicated on Sunday that he will make the country’s biggest companies and wealthiest individuals pay more tax. He’s under pressure to find quick solutions to the country’s fiscal challenges, as his freshly appointed government must present a budget bill for 2025 to Parliament in the coming weeks.
Barnier will likely miss an Oct. 1 deadline to submit the plan, and aides have indicated that the process could be delayed by around a week.
The uncertainty over how France will tackle runaway deficits has rattled financial markets, pushing up the country’s borrowing costs relative to other European countries. The yield premium of French debt compared with Germany rose to the highest since August at one point earlier Monday.
Tax-the-rich policies would mark a significant shift in France seven years after President Emmanuel Macron came to power pledging to repair France’s relationship with business. One of his first steps was to shrink the scope of the country’s wealth tax and put in a flat levy on capital, earning him praise from the business community and reproach from detractors who dubbed him the “president of the rich.”
Still, France remains the European country with the highest tax revenues as a share of economic output. Barnier said focusing new levies on the rich and large multinationals would be part of a strategy to avoid broad-based increases in taxation on working people and the middle classes.
Even as many of Macron’s centrist lawmakers have vowed to stick to his mantra of not raising the tax burden, a drumbeat of support is growing for a change of tack.
Earlier Monday, Bank of France Gov. Francois Villeroy de Galhau put his weight behind Barnier’s proposals, so long as any increases are “targeted and fair.”
Barnier, whose conservative Republicans party has traditionally taken an anti-tax stance, hasn’t yet detailed how his government would structure fiscal policy. He may give more hints on how he wants to approach tax during a general speech to the National Assembly on Oct. 1, when the new parliamentary session opens, according to his team. A government meeting is planned for Friday in preparation.
In an interview with the Parisien published late Monday, the head of the French business lobby Medef said he is ready to discuss an increase in corporate taxes, as long as the French government makes “far greater efforts than it is asking of companies” and that tax increases “do not halt the momentum of investment and job creation.”
“The state of public finances worries me, but France already has one of the highest tax rates in Europe,” Michelin Chief Executive Florent Menegaux said on Le Figaro TV on Sunday ahead of Barnier’s comments. “We can continue to increase taxes, but we would weaken the country’s competitiveness.”
Saade’s family controls the world’s third-largest shipping company, which registered record profits during the pandemic, and has one of France’s biggest fortunes. He has frequently traveled with Macron when the president has taken executives on foreign trips to drum up business and investment.
While Saade was stoical when faced with the possibility of a bigger tax bill, the executive rejected any push by the French government to change a European Union regime under which shipping companies pay levies on the basis of tonnage rather than revenue. The system was designed to allow European companies to compete against Asian counterparts, he said, and any unilateral change by France would be unfair.
“We want to invest 85% of our profits,” he said. “The more we earn, the more we invest.”
Saade was speaking during a press conference about an investment by the company to acquire Brazilian port terminals.
The Saade family is worth about $34 billion, according to the Bloomberg Billionaires Index. Most of that is derived from a controlling stake in CMA CGM, which was started by Rodolphe’s father, Jacques.