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France could nationalize big companies if necessary: finance minister
- gigatexal 7y agothis is a step too far... bailouts are preferred to this but if France wants to shoot itself in the foot I guess let them?
- gmm1990 7y agoIf the government is competent the nationalization can be good. French govt already took control of their face mask supply. Ensuring at least more face masks to healthcare providers. It’s hard to argue this specific action hurts the French society. People need to analyze whether specific actions by the government are good or bad for society not if it fits into your ideological narrative
- jmnicolas 7y ago> French govt already took control of their face mask supply. I don't know about that. What I know is that they sent all the production to China and Iran a month ago and now that we critically need masks there are none to be found even for medical professionals deemed 'not essentials'. We're talking about a government that allowed elections to happen 3 days ago then quarantined the whole country today ...
- ceejayoz 7y ago> What I know is that they sent all the production to China and Iran a month ago and now that we critically need masks there are none to be found even for medical professionals deemed 'not essentials'. That may wind up being the right call. China's ramping up production dramatically; the goodwill engendered may be to France's benefit.
- megous 7y agoWhy is it hard to argue that? In my country, the ban on private sales and mismanagement of forced central supply of protective gear lead to serious issues. Hospitals are asking for donations of protective masks and respirators from private citizens, because they can no longer buy them on the market, and are running low on their stock, and central distribution is a huge bottleneck, and any mismanagement there affects the whole country, not just one company or one hospital. It's actually a big fiasco. Noone can buy anything, and government is constantly apologizing and telling people to just wear whatever. Tomorrow it will be required to wear protection in order to do shopping, and noone can buy it, so people are shopping with scarves over their faces. I sewed up something together from a handkerchief, so that I could do groceries today. It's pitiful. Distributed supply means distributed failure (here and there). Central supply, means failure on the national level.
- sputr 7y agoPreferred ... for whom? Owners? Sure. People footing the bill? Hell no. If we (taxpayers) are footing the entirety of the risk than we're also be taking the entirety of the profits (if any). Why do you expect the public to NOT play by the capitalist rules? Low-term ownership of non-critical companies by government is usually a bad idea. Sure. But isn't it better to nationalize, save and then, when the market is good, sell it for a profit (or break even) than just ... give out high-risk money hoping you get it back? Besides ... if a company was going to collapse without government intervention that means it's irrelevant to the current owners anyway since they have already failed and lost everything. The fact society managed to stop that from happening with extraordinary measures is irrelevant to that fact. Don't get me wrong: I'm all for private enterprise. But I hate people who turn from "no government handouts for the poor" to "Companies need government handouts!" the second it's convenient.
- jariel 7y agoThe French government (as with most European governments) has a closer relationship with industry that we see in the Anglosphere, so this is not quite a surprise. That said, it's good timing on the announcement because it's more a signal than anything. 'We will not hesitate' is pretty strong language, indicating faith in those institutions that are, at least for now 'too big to fail'.
- lez 7y agoI would really like to see new laws (or deleted old ones) in order to increase safety for such unexpected conditions. It feels something is terribly wrong with the world and the basic laws of capitalism, now that it turns out many companies don't pile on stuff, and go out of business in a matter of weeks when supply is lagging behind.
- ceejayoz 7y agoSomething like "you have to have 6 months worth of payroll in a fund before you can do stock buybacks" would be a nice bit of regulation.
- whatshisface 7y agoDon't we want people who do too much stock buybacks to lose their businesses to be replaced by people who are more sensible? Putting all these guardrails on would just make sure insufficiently conservative CEOs never lose their jobs.
- ceejayoz 7y agoSure, if you don't care at all about the employees and customers affected by industry-wide collapses of companies all doing the same "goose the stock" tactic. Are there any examples of companies using "we can pay our employees for six months" as a competitive advantage on Wall Street you can point to? Industry self-regulation in this regard has a pretty dismal track record.
- 7y ago
- godzillabrennus 7y agoGovernment motors worked out okay for taxpayers in the USA. Not sure France is going to relinquish control though. They seem to like central planning / high unemployment over there.
- toomuchtodo 7y agoTaxpayers and GM workers and pensioners.
- magwa101 7y agoFor the US: Pump money into Amazon/FedEx/PostMates delivery services. Keep restaurants open and tap them into the food supply chain. Close all stores except to delivery services. UBI and universal health care starts now.
- youareostriches 7y agoThis is a far, far better response to bankruptcy of essential industry than the bailout of 2008.
- refurb 7y agoCan you expand on that? Nationalization to me isn't that different from a bailout, the government (and thus taxpayers) foot the bill. With nationalization I guess the government can exert greater control over how the company is run, but is that necessarily the best way to provide oversight?
- youareostriches 7y agohttps://thenextsystem.org/learn/stories/crisis-next-time-planning-public-ownership-alternative-corporate-bank-bailouts https://thenextsystem.org/learn/stories/crisis-next-time-pla... Among other things, nationalization would all but eliminate institutional resistance to, and subversion of, public policy and regulations.
- AnimalMuppet 7y agoWhich is a good thing, provided that public policy is good and wise. That's not a given, though...
- vonmoltke 7y agoGovernment departments exhibit "institutional resistance to, and subversion of, public policy and regulations" all the time. Why would a govenrment-owned corporastion be any different?
- spaginal 7y agoNo, Venezuela is a poignant example of what nationalization does to companies and industries. They simply bog down in eventual corruption and massive inefficiency to the point of stopping or limping along. The counter opposite example is China and their industries, but that implies an even worse kind of relationship that greatly exploits people and their labor.
- csomar 7y ago> Le Maire also welcomed a decision by France’s financial markets authority to ban short-selling during trading on Tuesday on 92 French stocks and said the measure could be extended up to a month if necessary. This is peak retardation by people who do not understand how the economy/markets work. French companies have lost lots of their competitiveness due unions, legal barriers, high taxes, etc... A recession/crisis would force these companies either to shutdown or restructure making them stronger in the future and letting the economy run on its own. If the government has failed to pass previous reforms, why would they think they'll successfully save these companies?
- iamaelephant 7y agoHave you ever considered that you have terminal America Brain and that your particular economic theories haven't exactly proven robust or even helpful for the past century?
- ogre_magi 7y agohttps://ourworldindata.org/grapher/world-population-in-extreme-poverty-absolute https://ourworldindata.org/grapher/world-population-in-extre...
- elliekelly 7y agoWhy is "extreme poverty" the appropriate metric? I'd be curious to see the same graph but for the number of people living in "poverty".
- amelius 7y agoWhy is extreme poverty still an issue to begin with?
- rukittenme 7y agoBecause its the natural state of all life on earth. Its the condition every living thing has to struggle against. It can be fought individually, it can be fought collectively, but it still has to be fought and even then you are not guaranteed success. Think of all the people in conflict areas who could live a decent life were they allowed to simply be in peace. Think of all the people who have lived good lives and then been displaced by horrific natural disasters. Its not an issue of economics. Its just a fact of reality.
- tarkin2 7y agoPlease stop downvoting arguments you disagree with. There are a few bad posts, simply calling someone an idiot, etc. Good: downvote. But a lot are being downvoted because they express arguments that are disagreed with.
- Funes- 7y ago>But a lot are being downvoted because they express arguments that are disagreed with. In my experience, that's always going to happen with voting mechanisms on comment sections. I tend to have disagreeable or extreme views on most subjects, and while I try to be considerate and not show any rudeness in my comments, I still get a lot of downvotes from time to time.
- kjakm 7y agoI know this opinion gets thrown around a lot but after coming back to HN after a few years away the discussions have changed a lot. I feel in the past the downvote mechanism was used less frequently and debates were possible without them. It's still far better than a lot of discussion boards and like all communities growth creates change but as a heavy user in the past (I think I hit the top 100 users at one point) it's definitely much more 'reddity' now depending on the subject.
- Funes- 7y agoI honestly don't know why there's a downvote function to begin with. I cannot downvote (yet?), but I wouldn't use it if I could. In the case that I disagree with someone and I happen to be knowledgeable on the subject at hand, I'll write them a reply if I have the time to do it. What downvoting does, instead, is fostering polarization and bias, on top of silencing controversial comments that could very well be absolutely sensible and truthful.
- simias 7y agoI sort of agree, there's already a semi-hidden "flag" feature for guideline-breaking content. Still, the mindset of "I downvote good comments I disagree with" also generally leads to "I upvote bad comments I agree with" and that's not much better.
- Funes- 7y agoMost of them were originally national companies, like BNP Paribas or Renault. Those two were privatised in the nineties. It's the same thing in Spain, and I reckon all around Europe. A shame, if you ask me, that many of them were providing essential public resources (telecommunications, energy, food, banking, etcetera) and eventually underwent a very sketchy privatisation process.
- fgonzag 7y agoThe problem isn't national vs private companies. It's monopolies vs true competition. Any monopoly or oligopoly is inefficient by nature, and tend to become corrupt over time. National companies are monopolies. Incorrectly privatized national companies is just transferring a monopoly from one party to another. Privatization done right can work. But you need to break up the big national companies into smaller regional companies that should be incentivized to expand into each others regions, thus providing competition.
- kzrdude 7y agoPrivatization has in some cases created even larger, multi-national of course, conglomerates, which are more inefficient still. It's not just monopolization that makes companies inefficient, but size, even if the two go hand in hand.
- lozenge 7y agoNatural monopolies can be efficient. Regional companies encouraged to lay duplicate fibre cables, duplicate power delivery or duplicate water or sewer systems, are not efficient. By your reasoning the government is always becoming more inefficient by nature. Odd because the standard of life keeps going up and the % GDP taken in taxes remains steady(ish).
- dzhiurgis 7y ago> Regional companies encouraged to lay duplicate fibre cables, duplicate power delivery or duplicate water or sewer systems, are not efficient. That’s never the case. Power is separated into producers, transmitters and retailers (you only deal with retailers who compete in service and negotiate with producers. Telco’s lease line from national company, negotiate peering and retail to you. Exception is cell telcos... these pay so much in spectrum auctions that almost undoubtedly few millions end up in polichickens pockets.
- kakoni 7y agoIs goverment helping small and medium sized companies in someway?
- ddebernardy 7y agoYes, at least in France. They passed (or merely announced?) a number of measures so that SMEs don't collapse due to treasury problems: postponed/cancelled taxes and contributions, paid time off for the staff without the usual delays, etc. As I understood they took example on what Germany did in 2008, and learned from what worked over there. Whether all countries do the same is another story altogether, but at least in France they might save a good number of jobs (by inflating the public debt, but that's a separate issue).
- MuffinFlavored 7y ago> postponed/cancelled taxes If a business loses 2-3 quarters of revenue/profit due to COVID-19, how will they "make it back" to payback their previously postponed taxes (from the quarter they made little to no money in)?
- rad_gruchalski 7y agoCan‘t speak for France but in Germany companies and self employed pre-pay taxes. Say you made 200k profit gross in 2018, it was your first year of operation. Your tax rate is 42%. We keep it simple, Freiberufler, no Gewerbesteuer. You filed the tax return in May 2019. your tax gets calculated and you have to pay 84k. You will have to pay only in 2020. But here‘s the catch. Finanzamt will assume you operate throughout 2019 at the same level as 2018. so they take 2*84k as a pre-payment for 2019 from you AND every quarter of 2020 they ask you to pay a quarter of 84k as a pre-payment for 2020. I assume they will not ask for those pre-payments. That will help a lot.
- venj 7y agoFrench business owner here. The current goal is to prevent companies from failing to avoid mass unemployment: - If you need to suspend your workers contracts, they are covered by the state. No need to fire them. - all tax collections have been suspended - your credit lines with commercial banks are covered by the state, so you can suspend payments or increase them if needed - The BPI (Public Investment Bank) has an emergency loan available for companies that could run out of cash due to the situation. They are not talking about the aftermath yet but these efforts cost a huge amount of money. My guess is that they will recover money by raising taxes for several years.
- jajag 7y agoCan anyone here say to what degree EU state aid & competition law is going to help or hinder governments over the next few weeks, as they try to shore up rapidly collapsing national economies?
- DeonPenny 7y agoFrance is very known for this. It's not surprising. Doing businesses there can be very fishy sometimes cause of this.
- LatteLazy 7y agoAny Western country can do this.