Jean Peyrelevade knows all about working with an activist state. He used billions in government aid to bring Crédit Lyonnais back to life after the bank identified a staggering Ff135 billion ($24.4 billion) in dud assets in 1995. Today he acknowledges President Nicolas Sarkozy’s activism in attacking the credit crisis but argues that the leader’s economic policies are driving the economy into the ground. In his book Sarkozy: L’Erreur Historique (Sarkozy: The Historic Error), published in late August, the 69-year-old investment banker at Gruppo Banca Leonardo in Paris says the president is eroding the country’s wealth by offering individual tax breaks rather than relief for overtaxed companies struggling to pay salaries. “Sarkozy has enormous energy and charisma that is used successfully on problems such as fashioning a European response to the current financial crisis,” Peyrelevade tells Institutional Investor. “But he lacks an appreciation of long-term challenges.” He calls on Sarkozy to cut the top corporate tax rate from 35 percent to 25 percent and raise the top income tax rate to 50 percent from 40 percent. Note: Peyrelevade is an economic adviser to centrist opposition leader François Bayrou, who aims to correct what he deems another historic error by defeating Sarkozy in the 2012 elections.
