Paris (AFP) – French President Emmanuel Macron staged his first major rally Saturday in his re-election race, promising France more “progress” and “solidarity” over the next five years, but his campaign saw a leap in speed.
It has been dubbed “The McKinsey Case,” named after an American consulting firm that was hired to advise the French government on the COVID-19 vaccination campaign and other policies. A new French Senate report questions the government’s use of private advisors and accuses McKinsey of tax evasion. The issue energizes and irritates Macron’s rivals as they halt campaigning ahead of the April 10 first round of presidential elections.
Macron, a centrist who has been at the forefront of diplomatic efforts to end the war in Ukrainehas a comfortable lead in opinion polls so far over far-right leader Marine Le Pen and other rivals.
“We are here to make it possible to realize a project of progress, independence and future for France,” Macron told a crowd of about 30,000 people in a stadium that usually hosts rugby matches. “I see difficulties in making ends meet, insecurities … and so much more to do to defeat extremism.”
Speaking to those who see “all their paychecks go to petrol, bills and rent” as the war in Ukraine has driven up food and energy prices, Macron promised to allow businesses to give a tax-free bonus to employees of up to 6,000 euros ($6,627) as soon as this the summer.
He also promised to raise minimum pensions to 1,100 euros ($1,214) per month for those who worked full time – up from around 700 euros now. He said the retirement age should be gradually raised from 62 to 65 to fund the plan.
His supporters welcomed him and chanted “Macron, President!” “A year, two years, five more years!” The renunciation of the three-color French flag.
But for those trying to sack Macron, the word “McKinsey” has become a rallying cry.
Critics describe the 1 billion euros the French government spent on consulting firms like McKinsey last year as the privatization and Americanization of French politics and are calling for more transparency.
The French Senate, where the opposition conservatives have a majority, published a report last month Investigation of government use of private consulting firms. The report found that state spending on such contracts has doubled in the past three years despite the mixed results, and warned that it could create a conflict of interest. Dozens of private companies are involved in the consulting, including giants such as Ireland-based multinational Accenture and French group Capgemini.
Even more damning, the report says McKinsey has not paid corporate profit tax in France since at least 2011, but has instead used a “tax optimization” system through its Delaware-based parent company.
McKinsey issued a statement She said she “respects the French tax rules that apply to her” and defended her work in France.
McKinsey advised the French government on its COVID-19 vaccination campaign, which was initially halted but eventually became among the most comprehensive in the world. External advisers have also advised Macron’s government on housing reform, asylum policy and other measures.
The Senate report found that such firms generate less revenue in France than in Britain or Germany, and indicated that spending on external consultants was higher under former conservative President Nicolas Sarkozy than under Macron.
Budget Minister Olivier Dusupet said state money spent on consultants was about 0.3% of what the government spent on public service salaries last year and that McKinsey earned only a fraction of it. He accused campaign rivals of inflating the issue to boost their rankings.
However, this issue is detrimental to Macron.
Macron, a former investment banker who was once accused of being “the president of the wealthy,” saw his ratings rise when his government spent huge sums to protect workers and businesses early in the pandemic, and vowed to do “whatever it takes” to soften the blow. But his opponents say the McKenzie case raises fears that Macron and his government are beholden to vested interests and out of touch with ordinary voters.
Everywhere Macron goes now, he asks about it.
“In the past few days, I’ve heard a lot talking about an American company evading taxes,” Macron said at a rally on Saturday. “I want to remind those who show their frustration that they have used[consulting firms]” in the local government as well.
He also noted his government’s struggle to make sure companies pay their fair share of taxes.
“Minimum tax in Europe, we fought for it, and we did,” he said.
France is pushing for speedy implementation in the 27-nation European Union of a 15% minimum corporate tax, which more than 130 countries agreed on last October.
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