Hollande's visit loaded with hopes

Now Hollande is being forced to admit that there is no magic wand to reinvigorate the ailing French economy. He is facing difficult decisions on how to reduce public expenditure.

Worse, his government is being mired in its own corruption scandal.

In his first year in office, unemployment in France has risen to 3.2 million, the highest level in 15 years. Debt has climbed above 90 percent of GDP and the promise to reduce the deficit this year to 3 percent of output has been shelved. With little or no growth there is no alternative but to cut public spending. According to its own assessment, France needs to cut 60 billion euros ($78.27 billion) in spending by 2017.

Hollande's dramatic drop in opinion polls is partly because of his failure to bring about economic growth and partly because of ministerial scandals. Recently, one of his closest ministerial confidants, Jerome Cahuzac, admitted that he had hidden 600,000 euros in a Swiss bank account, after having repeatedly denied it. He was forced to resign and is now being investigated for tax fraud.

Now the president has decreed that ministers should reveal details of their personal wealth in an effort to regain public trust. Each of France's 37 ministers is required to publish details of their personal finances. The list of assets includes details of bank accounts, life assurance policies, property and other expensive items such as cars, art works and antiques.

In an effort to raise money, Hollande promised to tax the rich. But many have fled to neighbouring Belgium or, in the case of film star Gerard Depardieu, to Russia. These proposals are now in abeyance.

The question of corruption and transparency in government is part of the G20 agenda, and Russian President Vladimir Putin, too, has urged his ministers to reveal details of their private wealth.

Chinese leaders have made clear their concerns over the growing rich-poor gap and the dangers of untrammelled corruption. Social media are already playing their part in highlighting the expensive lifestyle of some officials. Perhaps China will also consider cracking down on tax evasion.

Neither French nor Chinese like paying taxes but public services must be financed from some source. How to deal with corruption and prevent tax evasion could well be the most interesting part of the Hollande-Xi talks.

The author is director of the EU-Asia Centre.

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