France's bitter upper crust feels the heat of socialism
Paris — ''Adieux Rothschild,'' the headline in Le Monde read. Baron Guy de Rothschild's bitter judgment on President Franccois Mitterrand's socialist France followed. Under Mitterrand we are ''pariahs,'' concluded the head of the family that for almost two centuries has been the symbol of wealth in France.
The looming nationalization of his family bank, Banque Rothschild S.A., prompted the baron's harsh words. It also prompted his hardheaded response: He is moving most of his immense holdings to the more hospitably capitalist climes of New York.
The Rothschilds are not alone. Many well-heeled Frenchmen who are suffering in socialist France, or surely soon will be, are investing heavily across the Atlantic. At home, they are divesting themselves of expensive real estate, scurrying money out of the country, and spending less on fancy restaurants and big cars.
Not that Paris isn't sparkling this Christmas. There are plenty of packed restaurants, busy boutiques, and full theaters and discotheques.
Still, the individual rich and the captains of industry are angry. The socialist leadership has slashed their expense accounts and increased taxes on income, wealth, and inheritance, while tightening foreign currency controls. At the same time, big business is cursing the government's decisions to nationalize 36 banks and 11 major industries while declaring it will spend to create jobs.
Part of the reaction is a bit hysterical.''How can they abandon the model that has made France one of the richest countries in the world?'' demanded Bernard Giroux of the ''Patronat,'' an umbrella organization of French business bosses.
But the bosses are also raising serious doubts about whether the private sector will go along with the government's national campaign to create jobs.
''Their policies are fundamentally contradictory,'' Giroux complained. ''On the one hand they say we must be competitive internationally and create new jobs. Yet on the other hand they say we must pay new taxes through the roof.''
As a result, many wealthy Frenchmen have panicked. The newspapers here are frequently noting arrests at the border of well-to-do trying to get out with their capital.
On Dec. 20, Leonce Boissonnat, former head of the private affairs section of the Banque de Paris et des Pays-Bas, or Paribas, committed suicide. He was one of several Paribas chiefs facing charges of illegally transferring more than $30 million to Switzerland as well as 35,000 pieces of gold to Canada since the election.
Since it was revealed last month that Paribas was trying to evade nationalization by keeping private control over its foreign subsidiaries, the company has been the focus of a public outcry against wealthy businessmen. Justice Minister Robert Badinter brought the indictments against the senior Paribas officials, including former director Pierre Moussa. He has also announced plans to hire thousands of new customs officials and to vigorously prosecute any others who evade the new currency restrictions or taxes.
Badly hit by the government's policies are real estate brokers. After Mitterrand's election the market was loaded with chateaux and other large country properties because wealthy sellers wanted to scale down their assets before being hit by a stiff wealth tax.
The apartment market is tight in Paris so prices have fallen only slightly, but values of large country homes have plunged 30 percent.
''People have money, but they are afraid to buy with this government,'' Begarde explained. Most observers predict the market will get worse next year.
In light of this, it is no surprise that Ronald Reagan's supply-side America has become a haven for tax refugees.
Frenchmen with capital as well as businesses see America as their salvation.