Entries in France (10)


US CEO Berates French Workers’ 3-Hour Days

PHILIPPE HUGUEN/AFP/Getty Images(NEW YORK) -- An American CEO is jostling café au lait cups in France after declining to invest in a struggling French factory because its “so-called workers” get high wages for working three-hour days.

Maurice Taylor, chairman and chief executive of tire company Titan International Inc., based in Quincy, Ill., wrote a letter to French Industry Minister Arnaud Montebourg, declining to buy a Goodyear tire factory that is being closed in Amiens, France.

“I have visited the factory several times,” Taylor wrote in the letter, as reported by Bloomberg. “The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three and work for three. I told the French union workers this to their faces. They told me that’s the French way!”

According to Titan’s website, “Taylor was nicknamed 'The Grizz' by Wall Street analysts for his tough negotiating style.”

He ran for the Republican presidential nomination in 1996.

Titan International Inc. did not return a request for comment.

“The workers of Goodyear would have considered themselves insulted had the author of the letter been someone credible,” the General Confederation of Labor, or CGT union, said in an e-mailed statement to Bloomberg.

Unemployment in France is at a 15-year high and the closing of the plant means the loss of another 1,173 jobs.

Copyright 2012 ABC News Radio


What Would France’s 75% Tax Rate Look Like in US?

iStockphoto/Thinkstock(NEW YORK) -- The French government’s budget presented Friday, which is imposing a 75 percent tax rate for income exceeding 1 million euros ($1.39 million), is expected to inspire a number of wealthy French to move their residency to other countries. The 75 percent rate seems shockingly high, but if it were instituted in the U.S. it would still not be enough to even balance the budget.

How much money would a 75 percent tax rate for people with incomes over $1 million earn in the U.S.?

It’s tough to say, says William McBride, chief economist of the conservative think-tank, The Tax Foundation.  In the “rosiest” scenario of a higher tax-rate, millionaires would continue working, not renounce their citizenship nor find tax shelters, he said.

In France, one’s tax status is mostly based on residency, as opposed to the U.S., which requires all U.S. citizens regardless of residency to file with the Internal Revenue Service.

If the U.S. were to tax 75 percent of millionaires’ entire incomes, not just their income over $1 million, that would yield around $532 billion in tax revenue, he said.

McBride points out that such a tax rate here would make only a 48 percent dent in the nation’s deficit, which is expected to reach $1.1 trillion this year, the Congressional Budget Office said in August.  And that still would not pay down by one dime the $16 trillion plus national debt.

Again, that is in the “rosiest” situation. In France, the 75 percent tax rate is levied on millionaires' incomes only over €1 million and will last only for two years.

“It’s not as if it comes at no cost. The cost is a huge waste of resources in the form of tax planning, investors leaving the country, or investors who stay will stop investing,” McBride said. “There would be a loss in investment over time due to lower productivity, lower wages for everyone. It would cause massive harm to the economy with little or no gain in revenue.”

The top marginal tax rate in the U.S. has ranged from a high of 94 percent during World War II to 91 percent from 1950 to 1963 then gradually falling to the current rate of 35 percent.

Copyright 2012 ABC News Radio


How Elections in France, Greece Can Affect Your 401(k)

Photodisc/Thinkstock(NEW YORK) -- Voters in Greece and France went to the polls and sent the same message, punishing leaders who pushed through austerity plans -- drastic cuts aimed at saving Europe's economy.  

Why should the U.S. care about rejected austerity measures in Europe?  Economists say it could have an effect on your 401(k).  

Much of Greece's debt, for example, is financed by the major French banks.  The French banks are insured by American banks.  So if the banking system in Europe cracks, says Art Cashin of UBS Financial Services, 401(k)s in the U.S. will be dragged down with it.

"Money flows like water and if a dam breaks someplace, that could flood your home," Cashin told ABC News.

But the results of the rejection of these austerity plans may not be all bad.  According to a Wall Street Journal report, some analysts say voters' rejection of austerity in France and Greece could boost the global economy if governments feel pushed to do more in stimulating economic growth, rather than enforce stiff budget cuts.

Copyright 2012 ABC News Radio


Wall Street on Edge as Markets React to French, Greek Elections

Hemera/Thinkstock(NEW YORK) -- Investors on Wall Street could be in for a rough day on Monday as the market reacts to elections results out of Greece and France.  Stock futures were down ahead of the opening bell.

On Sunday, Socialist candidate Francois Hollande defeated French President Nicolas Sarkozy in the country's presidential elections and vowed to shift how the debt crisis there was being handled.

"Austerity can no longer be the only option for Europe," Hollande said Sunday in his acceptance speech in reference to Sarkozy’s policies to cut government spending.

Meanwhile, Sunday’s parliamentary elections in Greece also cast new doubts on Europe's ability to fix its debt crisis.

After months of violent anti-austerity rioting, many Greek voters ditched the two parties that have led the country for decades, supporting austerity and securing European bailout funds.

According to the exit polls, the radical leftwing party Syriza has made strong gains and the far-right Golden Dawn party has won enough votes to enter parliament. This puts the Greek austerity plan in jeopardy, and, consequently, the Euro zone and global markets.

Already overseas, stocks have reacted poorly to the news.  European and Asian markets were down on Monday.

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Copyright 2012 ABC News Radio


Oil Prices Hit Nine-Month High

Comstock Images/Thinkstock(NEW YORK) -- Oil prices have risen following Sunday’s announcement by the Iranian oil ministry of a halt in oil exports to Britain and France in response to the European Union’s sanctions on the nation in January.

Oil prices hit a nine-month high reaching $105 a barrel and could increase further if Iran proceeds with its threat to halt oil exports to other European nations. Gas prices have increased to 18 cents a gallon in the past month.

"The increase in price is a direct result of European importers of Iranian oil looking round to find alternative sources," said Professor Paul Stevens from Chatham House, reports BBC.

However, the increase in price is also attributed in part to an improvement in the economies of China and the United States.

Copyright 2012 ABC News Radio


Moody's Downgrades Six European Countries, Warns Three Others

Scott Eells/Bloomberg via Getty Images(LONDON) -- Moody's downgraded the credit ratings of six European countries on Monday and warned that three others, including Britain, could be next.

The credit ratings agency cut Italy's grade to A3 from A2, Spain's to A3 from A1, Portugal's to Ba3 from Ba2, Malta's to A3 from A2, Slovakia's to A2 from A1, and Slovenia's to A2 from A1.  All six countries were also given negative outlooks.

Meanwhile, Moody's gave negative outlooks to the United Kingdom, France and Austria, meaning that the countries could lose their AAA ratings in the future if the economy remains weak.

Monday's downgrades and warnings are a reminder that the region continues to be plagued by debt problems.

Copyright 2012 ABC News Radio


S&P to Downgrade France's 'AAA' Credit Rating

Datacraft Co Ltd/Getty Images(PARIS) -- Standard & Poor’s downgraded France's credit rating Friday from AAA to AA+, French Finance Minister François Baroin confirmed.

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Copyright 2012 ABC News Radio


Fitch Places Six Eurozone Countries on Ratings Watch

Photo by David Ramos/Getty Images(PARIS) -- On Friday, the credit ratings agency Fitch put six European countries on a downgrade watch list, causing further threat to the Eurozone which has been facing a debt crisis.

Despite affirming France's triple A rating, Fitch downgraded the country's outlook from stable to negative which could mean a ratings downgrade in two years.

Belgium, Spain, Slovenia, Italy, Ireland and Cyprus were placed under Rating Watch Negative with the probability of a downgrade at the end of a review in Jan. 2012.

Fitch said the region's crisis has been on a negative decline since July causing concern about the financial stability of member nations.

"In the absence of a 'comprehensive solution', the Eurozone crisis will persist and likely be punctuated by episodes of severe financial market volatility," said the agency in a statement.

Copyright 2011 ABC News Radio


Wall Street Report: Stocks Surge, Dow Up 400 Points

Mario Tama/Getty Images(NEW YORK) -- The Dow Jones industrial average finished up 423.37 points, or 3.95 percent, to 11,143.31 on Thursday. The Standard & Poor's 500 Index shot up 51.88 points, or 4.63 percent, to 1,172.64. The Nasdaq was up 111.63 points, or 4.69 percent, at 2,492.68. U.S. stocks moved sharply higher Thursday after nearly a week of steep losses over debt fears here and in Europe.

Investors reacted positively to a bit of good news among the gloom: New U.S. claims for unemployment benefits dropped to a four-month low last week, the government reported Thursday. Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 395,000, the Labor Department said, the lowest level since the week ended April 2.

Tech giant Cisco turned in an earnings report with better-than-expected sales, sending the shares up 17 percent. CEO John Chambers reported "solid progress" on the networking equipment firm's turnaround effort.

The markets here and abroad were also buoyed by an announcement that French President Nicolas Sarkozy and German Chancellor Angela Merkel will meet in Paris next Tuesday to discuss euro zone governance and other international issues.

Investor worries over French banks have weighed on the stocks over the past two days.

Copyright 2011 ABC News Radio


French Finance Minister Working with U.S. to Avoid Second Near-Collapse

Photo Courtesy - ABC News(WASHINGTON) -- French Finance Minister Christine Lagarde says she's hopeful that the proper mechanisms have been put in place to prevent another near-collapse of the worldwide financial system.

"We've been working really hard in the last two months to put in place what our leaders decided was needed: an alert control system, a supervisory system, discipline in the markets," the minister said in an exclusive interview with ABC News. "But it's a constant job because markets are very agile and they reinvent new schemes."

Lagarde spoke to ABC following a meeting with her U.S. counterpart, Treasury Secretary Timothy Geithner.

“In terms of growth versus austerity, it's the policy that we've adopted in pretty much all European countries [that] we need to address both issues. If we do not reduce the public deficit, it's not going to be conducive to growth,” she said.

“People worry about public deficit. If they worry about it, they begin to save. If they save too much, they don't consume. If they don't consume, unemployment goes up and production goes down. So we need to attack that circle from the deficits," Lagarde said.

Recently named to Forbes' list of 100 most powerful women, Lagarde is the only female finance minister in the Group of Seven industrialized countries.

Copyright 2010 ABC News Radio

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