Thursday 23 November 2017

Hawk alights in Paris

THE euro area got a new finance minister this week following the appointment of Pierre Moscovici as French finance minister.

Together with Germany's Wolfgang Schaueble, Mr Moscovici faces the huge job of preventing the single currency's disintegration.

At home, Michael Noonan has been studying his bald 54-year-old counterpart in the hope that the Hollande administration will prove less inflexible than that of Nicolas Sarkozy.

Remarks by Mr Moscovici on Thursday about not signing the fiscal compact without the addition of some sort of growth pact have renewed hopes that a stimulus package will be unveiled over the summer.

Cynics note the new government is still campaigning for June's assembly elections, so the Hollande administration is still making promises about stimulus and growth.

But analysts say Mr Moscovici is a hawk when it comes to debt and wants to make his mark by balancing the budget for the first time since 1974.

"We are convinced that public debt is an enemy for the country," Mr Moscovici said at the handover of power from former finance minister Francois Baroin and budget minister Valerie Pecresse.

"Our task will be to reduce deficits and debts. . . and it is to this task we will attach ourselves first," he added in an aside that is likely to have dampened hopes in Merrion Street.

It has been a long road for the bookish and eloquent Mr Moscovici - to a belief in balanced budgets and the top job in the finance ministry for the long-time socialist and youthful Trotskyist.

He was born in Paris 54 years ago to two renowned psychologists, both Communist sympathizers. His father was born in Romania and took refuge in France in 1947 after he supported the Communist party.

The young Mr Moscovici started in politics as a supporter of the Communist Revolutionary League and left it in his late 20s for the Socialist party, where he steadily rose to become one of its leaders and a specialist of European affairs.

Mr Moscovici, like President Hollande, studied at France's elite Institute for Political Sciences and Ecole Nationale d'Administration in Paris. After working for the Socialist party for several years, he ran for deputy in 1997 in the eastern Doubs region.

Shortly after winning the seat, he was appointed European affairs minister by former prime minister Lionel Jospin, the last Socialist in power before Mr Hollande. Mr Moscovici held that position for five years.

He has also twice won a seat at the European Parliament, where he joined the foreign affairs commission and the delegation for relations with the US.

Mr Moscovici, who speaks English, co-heads the lobby group Cercle de l'Industrie, which defends French industry in Europe.

In 2003, he joined his mentor and former teacher Dominique Strauss-Kahn and they founded a social democratic movement called "A Gauche en Europe" (left wing in Europe), a pro-market group.

When Mr Strauss-Kahn left France for the IMF in 2007, Mr Moscovici took charge of the Socialists' social democratic wing. He remained one of Mr Strauss-Kahn's biggest supporters until the IMF chief's arrest in New-York in May last year.

It was at this point that Mr Moscovici switched his support to Mr Hollande -- becoming his campaign chief in December.

While he only recently joined the Hollande camp, the two men co-authored a 1991 book on economics that criticised the market reforms of the then-Socialist government.

Mr Moscovici was constantly at Mr Hollande's side during the campaign, hammering home the Socialists' commitment to balancing the budget within five years by raising taxes on the rich and big companies.

Some had thought that Mr Moscovici would be named foreign minister. He was well qualified after gaining field experience as European affairs minister between 1997 and 2002, a period spanning the euro's creation. It also led him to play a role in thrashing out the Nice Treaty.

A cigar lover who often sports a three-day stubble, Mr Moscovici had coveted the prestigious post of foreign minister, but lost out to party heavyweight Laurent Fabius.

Mr Fabius, who was prime minister in the mid-1980s, broke ranks to campaign against a referendum on a new EU referendum in 2005 in France.

Mr Fabius is not expected to play much of a role in European affairs with both Mr Hollande and Mr Moscovici sharing responsibility for Europe. Mr Moscovici's dual role means he will play a key role in determining Ireland's future.

Analysts say Mr Moscovici's

expertise in European affairs will prove valuable as France and Germany grapple with a crisis that threatens to destroy the European Union.

They also note that one of his first jobs will be ironing out the detail of a French tax on financial transactions, passed in the last days of the Sarkozy regime and bitterly opposed by the Irish and British governments.

The French tax -- due to come into force from August -- will also form the basis of a broader attempt to introduce something similar for the rest of Europe -- creating a sticking point between Dublin and Paris.

Critics say that Mr Moscovici, while ambitious, lacks the warm personal touch that helped propel Mr Hollande to the presidency.

Mr Moscovici has admitted that his passion for hand-rolled Havana cigars has ruffled feathers among Socialist colleagues.

"A cigar can be negative when you are building a political image," he once told a French magazine. "Within the Socialist party, they find me pretentious because of my Havanas."

The cigar, long a cipher for capitalism, is also a reminder that Mr Moscovici is more keen on fiscal discipline than Mr Hollande, which is why his first words on taking office were that "public debt is an enemy of the country".

Quite what the cigar-smoking, philosophy and economics postgraduate will make of Mr Noonan's bluff style and off-the-cuff wisecracks about feta cheese and the European crisis remains to be seen.

The Limerick man may well find the three-day stubble and bookish manner not to his taste, but he will do everything he can to hide it.

Mr Moscovici may be paid less than Mr Noonan but he is now a significant player in Europe and his decisions could well decide this country's future if the present crisis escalates and the markets turn their attention from a broken Greece to a vulnerable Ireland.

Irish Independent

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