â€œThe situation is very serious. Some business leaders are in a state of quasi-panic,â€ said Laurence Parisot, head of employersâ€™ group MEDEF.
â€œThe pace of bankruptcies has accelerated over the summer. We are seeing a general loss of confidence by investors. Large foreign investors are shunningÂ FranceÂ altogether. Itâ€™s becoming really dramatic.â€
MEDEF, Franceâ€™s equivalent of the CBI, said the threat has risen from â€œa storm warning to a hurricane warningâ€, adding that the Socialist government of FranÃ§ois Hollande has yet to understand the â€œextreme gravityâ€ of the crisis.
The immediate bone of contention is Article 6 of the new tax law, which raises the top rate of capital gains tax from 34.5pc to 62.2pc. This compares with 21pc in Spain, 26.4pc in Germany and 28pc in Britain.
â€œLetâ€™s be clear, Article 6 is not acceptable, even if modified. We will not be complicit in a disastrous economic mistake,â€ Mrs Parisot toldÂ Le Figaro.
An alliance of private organisations in France has issued a protest entitled â€œState of Emergency for Businessâ€, warning that confiscatory tax rates threaten lasting damage to the French economy.
Mrs Parisot said the policies border on economic illiteracy: â€œThe idea of aligning taxes on capital with those on wages is a profound economic error. It is scandalous that the French have been left in such economic ignorance for years.â€
French business has called for â€œcompetiveness shockâ€ of business tax cuts to claw back lost ground against Germany. Instead, it faces an extra â‚¬10bn (Â£8.1bn) of business costs from the budget unveiled in September.
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