Newly elected French socialist President Francois Hollande told GM’s partner PSA Peugeot Citroen to renegotiate a plan to lay off 8,000 workers. However, Hollande admitted he could not halt Peugeot. Hollande promised government money to “encourage consumers to purchase French-made, environmentally friendly cars,” Reuters reports. Soon he will admit he cannot do that either. The “French made” part is sure to get his government in trouble with the EU.
According to the report, Hollande ruled out another round of cash for clunkers. The past one, introduced during the 2009 financial crisis “had cost the taxpayer dearly and had often been spent on foreign-made vehicles,” Reuters quotes Hollande.
Bloomberg reports that the French government will “announce measures on July 25 to boost French car sales and prop up the entire auto sector.”
No details on the support plan are available. “We will create a plan which costs as little as possible to the taxpayer and is as effective as possible,” Reuters quotes Hollande. Any attempts to favor one EU partner’s industry over other countries is sure to attract the attention of Brussels. Brussels is keeping an eye on Paris, due to past episodes of support for the French by the French.
Ignoring Brussels, at least initially, is a well-known populist ploy in Europe. When Brussels complains, the populists can wring their hands, blame the grinches in Brussels, shrug, and continue as if nothing happened.