Could the future of the single currency depend on the rubbish collection in one southerly capital? As the TV series The Sopranos showed, there is nothing that attracts organised crime like rubbish collection.
And there is no one who does organised crime like the Italians.
Let us look back to the days of Silvio Berlusconi, Italy’s last elected Prime Minister, who was chased out of office by Angela Merkel and Nicolas Sarkozy five years ago, in 2011. There was a rubbish scandal then, but it was in Naples.
Naples is different, as everyone knows. There is bound to be a scandal there, and it’s bound to be something to do with organised crime.
The rubbish built up on the Neapolitan streets and Silvio promised to do something about it. He did, but as with his other crisis at the time, Alitalia, it was a short-term, face saving fix.
The problem with rubbish is that organised crime gets hold of the dumps, renting them out to higher paying customers such as people trying to hide toxic waste, so that there is no space left for legitimate waste such as yours or mine.
“The situation is very serious. Some business leaders are in a state of quasi-panic,” said Laurence Parisot, head of employers’ group MEDEF.
“The pace of bankruptcies has accelerated over the summer. We are seeing a general loss of confidence by investors. Large foreign investors are shunning France altogether. It’s becoming really dramatic.”
MEDEF, France’s equivalent of the CBI, said the threat has risen from “a storm warning to a hurricane warning”, adding that the Socialist government of François Hollande has yet to understand the “extreme gravity” of the crisis.
The immediate bone of contention is Article 6 of the new tax law, which raises the top rate of capital gains tax from 34.5pc to 62.2pc. This compares with 21pc in Spain, 26.4pc in Germany and 28pc in Britain.
“Let’s be clear, Article 6 is not acceptable, even if modified. We will not be complicit in a disastrous economic mistake,” Mrs Parisot told Le Figaro.
Approximately 200,000 Britons own second homes in areas such as the Dordogne and other parts of France, particularly those serviced by budget airlines.
Now, however, holiday home owners find themselves in the sights of President François Hollande as he seeks to tax the better-off to reduce France’s large budget deficit.
On Wednesday (July 4th), the French government announced it was to increase taxes on foreign-owned second homes. Tax on rental income would rise from 20 per cent to 35.5 per cent, and capital gains tax on property sales would rise from 19 per cent to 34.5 per cent. The extra in each case is being labelled a “social charge”.
A Treasury source said on Wednesday night: “We will need to study the details. But we will of course challenge any proposal which breaches European single market laws and anti-discrimination rules.”
It is understood that President Sarkozy proposed a similar tax increase last year which was also challenged by the British Government.
Mr Hollande will meet Mr Cameron in Washington dc before a g8 leaders’ summit today, days after he replaced Nicolas Sarkozy as French leader.
British diplomats have been left scrambling to build relations with Mr Hollande amid perceptions that Mr Cameron failed to do so before his election.
Mr Hollande and his advisers are said to be “very conscious” of Mr Cameron’s close relationship with Mr Sarkozy, regarding the Prime Minister as having given at least tacit backing for the former president during the election campaign.
Officials in London and Paris said the two men will begin their working relationship with a number of differences.
Mr Hollande has said he wants to withdraw French combat troops from Afghanistan by the end of this year. Britain and America want the mission to continue until 2014.
The annual mass exodus from the French capital sees the city’s inhabitants while away the August heat in the countryside.
But this week many of the biggest earners across the Channel have been mulling a départ which could be rather more permanent.
The toppling of Nicolas Sarkozy by François Hollande, the first socialist president to lead the country in 17 years, has sent ripples of fear through the wealthier arrondissements of Paris.
Their new president may block the eurozone austerity advocated by Germany’s Angela Merkel, but he is not opposed to his richer citizens feeling the squeeze.
Mr Hollande plans to implement a 75pc tax rate on earnings over €1m (£800,000), on top of a 45pc rate for people making €150,000 or more. He is also expected to raise “wealth taxes” on property assets and end his predecessor’s tax incentives to lure bankers back home.
When the last French socialist president, François Mitterrand, was preparing for victory, it was my job as a diplomat to accompany him on a trip to London to call on Jim Callaghan. En route from the airport to No 10, I arranged for him to drop in to Kew Gardens. A mistake. He was so enthralled I couldn’t get him out, and we turned up a trifle late for the prime minister.
The point of the story is French insularity. Mitterrand was a passionate arboriculturalist, yet he knew nothing of the glories of Kew. In France, insularity can go along with a romantic nationalism, on Left and Right, and with François Hollande’s victory we are seeing more of that today.
“A policy of national conceit” was how my ambassador in Paris, Sir Nicholas Henderson, characterised French attitudes in the 1970s, and in different conditions that same overweening self-regard is there once again. Socialism is about doctrine, and the economic doctrines of the new president combine two ingredients dear to the heart of the French Left for centuries: nationalism and the revolutionary spirit.
George Osborne tried his best on Marr earlier to be positive about the prospect of François Hollande in the Elysee, echoing the assurances from socialist central that the new French president is not about to rip up the European consensus on tackling debt and deficits. He underlined the Hollande pledge to legislate for a balanced budget by 2017 (though Mr Hollande, it should be pointed out has ruled out changing the constitution). The Chancellor’s argument was that Mr Hollande is stressing growth, but is not giving up on the need for discipline. It was his way of heading off attempts by Labour to capitalise on Mr Hollande’s win. But you just have to look at Twitter to see how the Left is not only cheering Mr Hollande but seeing his win – and his policies – as a victory and an endorsement for Eds Miliband and Balls. For David Cameron, the loss of his friend and a centre-Right ally is bad news for his diplomacy in the EU, but also because it gives the Left in Britain a script to follow about an unpopular government detached from the people by wealth and austerity.
On the same day in Greece, neo-Nazis entered the country’s parliament after national elections that wiped out mainstream parties that had supported austerity measures imposed by the EU.
Accepting his mandate as French president, Mr Hollande threw down the gauntlet to Angela Merkel, the German chancellor, who has made austerity policies a condition of euro membership.
“Europe is watching us. The moment that I was announced president, I am sure in many European countries there was a relief, hope at the idea that at last austerity is no longer inevitable, and my mission is to give to European construction the dream of growth,” he said.
“Europe is watching us, austerity can no longer be the only option.”
His words, just after inflicting a humiliating defeat on Mr Sarkozy, previously the Chancellor’s closest ally, are a call to arms against the economic policies that Germany has enshrined in a eurozone “fiskalpakt” treaty.
Cameron’s austerity drive could be blown off course by the fall of his ally in the Élysée
A conservative leader laid low by bad judgments and unwise friendships, a socialist geek with no charisma riding high in the polls, and a country growing hostile to wealth and the demands of austerity. Sound familiar? Anyone bored by tomorrow’s mix of local and London elections, and specifically Tories who fear that David Cameron is letting the next general election slip from his grasp, should tear their eyes away from their troubles at home and pay attention to the sea-change that is about to overwhelm the centre-Right in France.
If the Prime Minister thinks he’s got troubles, he should call his ami Nicolas Sarkozy, who is about to be ignominiously ejected by a drip-dry Left-wing apparatchik. On Sunday, the French vote in the second round of their complex presidential system. If the polls hold true, Mr Sarkozy will be turfed out and replaced by François Hollande, a placid, indecisive blancmange of a politician – and that’s just what his friends say about him. It will be the first time in more than 30 years that a sitting French president has failed to be re-elected, and only the second time that a socialist has ejected a centre
The job of French president is grim, but someone has to do it. Such was the view of Charles de Gaulle. “My mission seemed clear and terrible,” he once said. “At this moment, the worst in her history, it was for me to assume the burden of France.” François Hollande, the first-round victor in the race for the presidency, is more upbeat.
The Socialist leader, nicknamed “Monsieur Flanby”, after a milk pudding, senses triumph against Nicolas Sarkozy. Adieu, Mr Bling; enter the human blancmange. “Change is afoot,” Mr Hollande tweeted. “Nothing will stop it now.” We shall see. Mr Sarkozy, who will fight to the end to prove him wrong, may yet prevail.
If, however, France elects its first Socialist president since 1988, Mr Hollande will shoulder not only internal problems but also the dreams of those leaders, Ed Miliband included, who hope the centre-Right’s grip on Europe is weakening. Angela Merkel, who has campaigned for Mr Sarkozy, faces possible ejection in the forthcoming German elections.