ARE PRESIDENT Nicolas Sarkozy and his political allies “taking over economic power”, as alleged by the opposition politician François Bayrou?
Or is Mr Sarkozy’s top economic adviser simply the best man for the job of chairman of the huge new bank whose creation by merger is to be announced tomorrow? The marriage of the Banque Populaire and Caisse d’Épargne, two troubled French mutual banks, was negotiated and decided in Mr Sarkozy’s office at the Élysée Palace, “transformed for the occasion into a merchant bank”, as Le Monde newspaper’s editorial remarked sarcastically.
The operation was supervised by François Pérol, the president’s economic and financial expert, deputy chief-of-staff of the Élysée and future chairman of the new bank, which will be France’s second largest, with 35 million customers and 95,000 employees.
The state is in the process of investing up to €7 billion in the new bank, and will hold up to 20 per cent of its capital if the loans are not repaid within three years. In exchange for that participation, the government will name four of 18 board members, and Mr Pérol will take over.
Mr Sarkozy’s intention of appointing Mr Pérol CEO has sparked a political uproar, with commentators again using words like “banana republic” and “conflict of interest”.
If Mr Pérol’s nomination goes ahead, the socialist leader, Martine Aubry, said yesterday, “We’re no longer in a republic”. Mr Sarkozy “must know that he’s the head of state and it’s not his job to appoint the presidents of banks, after appointing press bosses, prosecutors and tomorrow investigating magistrates, or else we’re really changing [the nature of the] state.”
The bank merger is what Libération newspaper called a “schizophrenic bailout”. Mr Sarkozy has so far resisted the idea of nationalising French banks, but state participation in the marriage of Caisse d’Épargne and Banque Populaire looks like partial nationalisation.
“If so, why not demand voting rights and a blocking minority?” Libération asked. “If not, in the name of what can Pérol be parachuted [into the top job]?”
Mr Pérol first worked for Mr Sarkozy at the finance ministry in 2004. In 2007, he left a job at Banque Rothschild advising leading companies on mergers to join Mr Sarkozy’s staff at the Élysée. He was the chief architect of Mr Sarkozy’s €360 billion bank bailout, the €26 billion economic recovery plan, and the plan for the automobile industry.
Mr Pérol’s previous job at Banque Rothschild paid 20 times more than his position at the Élysée, and his appointment is portrayed as pantouflage – the term for civil servants who leave government for cushy jobs in the private sector.
Mr Pérol’s role in overseeing the merger of the two banks, against the wishes of the Caisse d’Épargne, is at the heart of the controversy.
As Mr Bayrou keeps repeating, article 432-13 of the French penal code forbids any official who has supervised, controlled or given opinions on the operations of a private enterprise from taking a job within that company for three years. In the event of doubt, an ethics commission delivers an opinion.
Speaking at the close of a Franco-Italian summit in Rome yesterday, Mr Sarkozy said Mr Pérol’s appointment posed no problem, and has already been approved by the ethics commission.
Their opinion “will be made public and you shall see, yet again, the difference between a controversy and a problem, is that there is no problem”.
Mr Sarkozy said his appointments are always based on “competence, competence, competence”, and noted that “when I appoint someone competent who comes from the left, that interests you less”. He referred to the transfer of Jean-Pierre Jouyet, a Socialist, from the European affairs ministry to the AMF, which regulates financial markets. But as a diplomat here pointed out, the AMF is a government regulatory body, not a private bank.
There has long been a revolving door between government and private sector in France, but Mr Sarkozy promised a “rupture” with old habits and the end of the monopoly held by graduates of the École Nationale d’Administration (ENA) and the grandes écoles. Mr Pérol graduated first in his class at ENA.
Over the next few months, Mr Sarkozy will be able to place his people in top jobs at the electricity company EDF, the Paris transport authority RATP, France Télévisions and La Poste.