With revolution sweeping across the Arab world, it seems almost indecent to talk about the latest round of politique politicienne in France, but I am a man of duty. And I don't much like Jean-François Copé. Still, I have to say that as a political poker player, he rivals Sarkozy when it comes to keeping his name in the news. His latest move is to propose an increase in the VAT, ostensibly as a way of reducing (eventually) social contributions (a payroll tax) in order to reduce French unit labor costs and thus, he claims, make French firms more competitive with German rivals. Whether such an analysis of France's competitive position can withstand scrutiny I'm not prepared to say at this point, but as a communications strategy it certainly makes sense: Copé looks like a hands-on, activist leader not afraid to break with his own president's policy (or to get out ahead of it: remember that Sarko has promised tax reform for later this year, and a revision of social contributions as part of a broader package of reforms seems likely).
Indeed, Christine Lagarde was the first governmental voice to leap into the breach to protect her president--and most likely to protect the reform package that she is no doubt working on at this very moment. Lagarde insists, probably correctly, that an increase in the VAT at this point will harm the consumer-spending-driven recovery. But the fact remains that Copé has stolen her thunder. If a reduction of the CSG and/or increase of the VAT is part of the ultimate reform package, Copé will take the credit, and if it isn't, well, he can still take credit for being a maverick unafraid to buck the party consensus. Bien joué. But I still don't like the guy.