“Are the Chambers no longer wanted?”

Jean-François Bernardin, President of the Assembly of French Chambers of Commerce and Industry (ACFCI), is assuredly somewhat tired of waiting for the reform of the CCIs to be ratified by Parliament. Validated last Summer by the Council of State, then by the Council of Ministers, the draft Act is still lying on a desk in the National Assembly. Initially planned for December or January, the vote will now no longer take place before late next Spring.
Admittedly, the Parliamentary agenda is heavy. The 2010 Finance Act has only just been passed, not without consequences for the CCIs, since the suppression of business tax has jeopardised the funding of the Chambers. And then there is all the contradictory work of the reform of regional and local government structures, which falls between a regional fact and a Metropolitan fact, and which has been carried out at the same time as the CCI reform without much, or even any, consultation.  Given the timescale, opponents of CCI reform are taking advantage of the new setback to convey to Parliamentarians their many and varied grievances. “People who do not agree with it nor with each other,” said Jean-François Bernardin with some pique, a few days before the ACFCI general assembly on 10 December 2009.
For the CCI President is not losing sleep over the question of  reform, “it’s strange to see certain people getting in a state about this when in reality, it’s a relatively simple process. The Government, within the framework of the general review of public policies (RGPP), has asked the Chambers to put forward a plan for reform, without which reform will take place without taking account of their opinions. After long discussions, seven CCI Presidents, of whom I was not one, drew up a composite motion and I have noted that, curiously, there are now people against this text although they prepared and voted for it. The text that defined a balance between the territorial Chamber and the regional Chamber. Since we were not able to make our regional Chambers work as a level of resources and where policies are harmonised, most of the Presidents have decided to overturn the system. We therefore all re-voted with the notable exception of the Paris Chamber of Commerce (CCIP) who declared themselves against it. The public authorities know how the network voted, they know the content and they drew up a draft bill from it. As far as I am concerned, we are still presenting a project backed by the majority of Chambers of Commerce.”

Opponents have no alternative project
For Jean-François Bernardin, “the starting-gun has been fired”, and it’s now up to the public authorities to vote for the Act so that CCI elections can be organised after Summer 2010. “The elections have already been postponed for a year because of the reform and we have 5-year mandates, so theoretically this poses legitimacy and burn-out problems for staff and for their successors who are preparing to take over. We cannot ask them to wait indefinitely.” As for opponents to the reform, “they are not in the time-frame”, but above all, “they have no alternative project. Firstly, the  members of the self-proclaimed conference of Presidents, whose real geometry no-one knows, are incapable of presenting a plan since their only plan is one of no change. Secondly, the proposals of the Paris Chamber of Commerce and the Alès Chamber of Commerce are completely contradictory.”
Aware of the problems that changes in a network several centuries old represents, but armed with a majority vote of 105 CCI Presidents for the scenario put to the Government, Jean-François Bernardin also warns of the latent hostility that may reign at the different government echelons. “There is the French President of the Republic’s wish to reform our system. That’s the way it is. And then, the way the Chambers work does not have many admirers in the civil service, it has to be said. Even when certain parliamentarians support us, when the Government raps them on the knuckles, at the last minute, there is no-one there. Personally, I believe in the CCIs, but I also think they will not survive without reform. And as I am a company Director, I think they should be accountable to companies. The world has changed since the 19th century. This is why we have suggested keeping Chambers near their region whilst having a sort of regional cooperative to harmonise policies and allocate resources. We are surely not going to make fools of ourselves by telling the Government we have worked nine months, voted twice, that they drew up a draft bill on the basis of this, sent it to the Council of State, it was adopted by the Council of Ministers, but that in the end we are going to do something different. That’s enough, the Bill will be put to the vote at the end of March and that’s it.”

What is a metropolis?
Nonetheless, there remains the undermining work of the Association of Metropolitan Chambers of Commerce and Industry (ACCIM) that includes the Bordeaux, Lille, Lyon, Marseilles, Nantes, Nice, Paris and Strasbourg CCIs, claiming representation of 38% of the national GDP. The latter, in the context of the RGPP, remind us that following the work of the Balladur-Perben Committee for the reform of regional and local government structures, the biggest urban communities will be given a specific status. Still in their opinion, it would therefore be a good idea that the Chambers representing the economic players of these metropolises also benefit from their own individual allocations to allow them to support the development of these regions and their position in Europe effectively. The expression “metropolitan fact” was uttered against the background of  the CCI reform where the “regional fact” is omnipresent.
In response to the ACCIM, Jean-François Bernardin speaks of confusion between the administrative organisation, the economic facts and problems of reports to the authorities. “Firstly, as regards the form, we were not asked to wait until the reform of local and regional governments was complete to be reformed. Next, as for the content, there is no question of denying the economic usefulness of metropolises. The problem is knowing what consequences this will have for the organisation of government in France and secondarily, for the Chambers of Commerce. What’s a metropolis? What is the metropolitan economic fact? Does it lead to the desertification of the rest of the region or does it pull the rest of the region up with it? We are definitely in favour of the metropolis taking the rest of the region with it. But here, the government and citizens must make a choice. Do we want to empty the rest of France of its wealth for the benefit of two, three, four, five, six or seven metropolitan centres? In a given area, there is a region that pulls and regions that are pulled. Does that mean that the driver is the others’ boss? I don’t think so. The Île-de-France is a metropolis, but it is the region as a whole that is a metropolis, not just Paris. Can you imagine that in a region we are going to say that the authority of the Regional Council for the most dynamic part of that region is going to be taken away for the benefit of the metropolis. No-one can imagine it. But I can see that after putting the metropolises forward as a regional alternative, which for me was completely incomprehensible, they are now being placed at the level of a higher OPCI (public inter-communal cooperation organisation), which is rather more logical, all the same. I am willing to bet that it is the regional level that will emerge from these discussions. The Government itself has made the Préfet of the Region, the boss of the departmental préfets, which is a revolution. All Government departments have now been regionalised.”

Budget reduction before the reform
Although disagreement between a handful of Chamber Presidents, including the most powerful, and the rest of the network seems deep-rooted, the question of CCI resources following the suppression of business tax has rallied the troops. They heaved a sigh of relief when the idea of an allocation to the Chambers was abandoned, yet the 2010 Finance Act still has to provisionally determine the level of their funding for the next year at least. Two weeks before the final vote on the Finance Act, we already knew that the Chambers would have to face a reduction in their budget for 2010, and even for 2011 and 2012. For the President of the ACFCI, “the Government has said that the resources of the Chambers for 2010 would fall by -5% because the RGPP Committee is thought to have declared that 3 x -5% was needed. We do not even know if it is -5% excluding the tax burden or -5% plus or minus inflation. In the worst-case scenario, this means that it is about -6.5% a year over three years, that is to say -20% in all. Strangely, the Budget Minister has said he would ask for -10% for State bodies. Why –10% for State bodies and -20% for the Chambers? Is it because we no longer want the Chambers? In this case, they should state this clearly. It is a mixture of ignorance that could be interpreted as disdain and it is not positive for the reform. I remain disappointed with the Parliamentary debate. We have explained several times that we are in agreement with the reform, agree to suffer, agree that things should be shaken up, but we should be left to do it at a rate that is compatible with intelligent functioning. I still do not understand the Government’s position, since we are introducing reform to improve the cost-effectiveness ratio. It would be more intelligent to wait for the reform of the Chambers to reduce the budgets. The risk: if we have a dictate on our resources, it is to maintain the tool and reduce production. I had understood that the RGPP was not to abolish departments, but to re-organise them so that they cost less. We are in the process of re-writing for, I hope, several decades to come if not for a century, the future of a fairly specific French system that France has spread all over Europe. I think that this regional community of companies corresponds very well to a search for balance on the part of the French who agree with this enterprise on condition it is integrated into a more collective vision.”

Are French Chambers abroad under threat?
Since this interview with the President of the ACFCI, the 2010 Finance Act passed in Parliament, has fixed the reduction in the CCI budget at 5% when the tax revenue of the Chambers represented less than 20% of their 2009 budget, 4% for less than 35%, 3% for less than 50% and 2% for more than 50%. And what of inflation? It is true that the more outside revenue the Chambers have such as their concessions or industrial zones, the more their tax revenue will be reduced in 2010. No-one knows yet if 2011 and 2012 will be subject to the same budget reductions, but there is nothing to indicate that they will not. As for the form this tax revenue that is to replace the additional tax on the business tax (TATP), the text states that 40% of it will be made up of an additional tax to the corporate land tax and the remaining 60% of an additional tax to the value-added tax companies pay.
These reductions ranging from between 2% and 5% will therefore have varied impacts according to the profile of the Chambers which are very diverse in budget terms. Big Chambers such as those in the metropolises will be subject to -5%, other smaller Chambers or those entirely financed through tax such as the regional chambers of commerce and the ACFCI will only be subject to -2%. The reduction will represent 500,000 euros of the budget of the French Assembly of Chambers (around 25 million euros). This will reassure Jean-François Bernardin a little since he forecast a cut of 1.2 million euros in the case of a -5%.
However, at the time of our encounter, the President of the ACFCI was struggling to make savings. According to his calculations, only a potential saving of 100,000 euros a year seemed possible, on condition that an “austerity plan” was implemented aimed at colour photocopiers and other secondary expenses. No job cuts either, since there is no natural departure for the next three years and the staff benefit from a special status that provides for the payment of salaries for three years after redundancy. Moreover, Jean-François Bernardin does not see “in the name of what superior interest of the nation we would make a social workhorse in the Chambers of Commerce which have not increased their tax burden in 20 years and who are not in debt.” He continues, “I have already written to the Institut de l’Entreprise to tell them I was not sure I would be able to continue to pay contributions for them. Then, we have a large budget that represents the subsidising of the French Chambers abroad (CCIFE). This is not blackmail, but when I look at the list of budgets I can legally cut in the short-term, if I do not want to place myself in a situation of deficit, I come up against the CCIFE subsidy that amounts to 1.2 million euros. I have already told the public authorities that this would be absurd at a time when France must advance on the international stage. People think the Chambers are rich and that there is grist for our mill, but in fact this just shows a lack of understanding of the case.”
Sources close to the ACFCI state that even a reduction in tax revenue of 500,000 euros could nonetheless bite into the subsidies allocated to certain French Chambers abroad. Others are already talking of China or India, but our editorial team have not been able to confirm this  to date, and most importantly, the decision has not yet been taken.
The beginning of 2010 still seems problematic for France’s CCIs.