Since the beginning of his long, high-flying career, tech industrialist and former government minister Thierry Breton has grown used to being the man of last of resort, the go-to guy when all seems lost.
Breton’s nomination as France’s European commissioner fits that pattern: on October 10th, Euro MPs stingingly rejected President Emmanuel Macron’s first choice for the job, Sylvie Goulard, sending his Élysée Palace staff scrambling to find a presentable replacement.
On October 24th they announced they had chosen Breton, who has served as CEO of IT multinational Atos since 2009, to head the EU’s huge industrial policy portfolio, one that Macron has ensured encompasses the realms of energy, defence, space and digital.
According to Macron’s office, the second-choice candidate has the right stuff for the job. “Thierry Breton has solid skills in the areas covered by this portfolio, especially industry and digital, since he was economy minister between 2005 and 2007, with responsibility for industry,” a government statement said. “He has also served as CEO of major industrial and defence companies and enjoys a solid reputation as a man of action.”
In a message designed to avert another rejection, the Élysée Palace said the choice of Breton had been discussed with and approved by European Commission President Ursula von der Leyen, whom Breton has known for several years." class="media-center" src="https://static.mediapart.fr/etmagine/default/files/2019/10/25/rtx29mtw.jpg" width="728" height="413" alt="Thierry Breton with Emmanuel Macron, who was then economy minister, in 2016." id="5d1264fd-f70a-11e9-b97b-000c29f3dae3" data-insert="options%5Blegend%5D=Thierry+Breton+with+Emmanuel+Macron%2C+who+was+then+economy+minister%2C+in+2016.&options%5Bformat%5D=100&options%5Bfloat%5D=center&options%5Bhighlight%5D=0&options%5Bmax_width%5D=728&options%5Buse_percent_width%5D=0&options%5Bwidth%5D=728&options%5Bmax_height%5D=481&options%5Buse_percent_height%5D=0&options%5Bheight%5D=481" title="Thierry Breton with Emmanuel Macron, who was then economy minister, in 2016."/>Breton epitomises 'Macronism', in which previously antagonistic liberals and neo-liberals, and intellectuals and technocrats, have teamed up in a quest for modernisation and which advocates multiculturalism and greater European integration. For many Macronists, digital innovation is key to the project’s success.
Breton has moved effortlessly between the public and private sectors. He is plugged into France’s aspirational “start-up nation”, having worked for years in tech firms such as Bull, Thomson, France Télécom, and Atos. He has long backed further European integration, and he gained a reputation as a safe pair of hands by championing austerity and defeating debt when he was finance minister. In short, he ticks all the right boxes.
What is more, he is loyal: Breton threw his weight behind Macron even before the first round of the 2017 presidential election that rewrote the rules of French politics forever. Not a man taken to diffidence, Breton likes to boast that he is the one who “made Emmanuel Macron.”
Old guard stalwart
Despite his “revolutionary” rhetoric about digital innovation and artificial intelligence, Breton is in fact a stalwart of the old guard, of the worn-out right, and of France’s particular strain of capitalism. By flitting between business and politics, he has become a bridge between two worlds where collusion, cliquiness and conflict of interest shamelessly run riot.
Breton is an adoring member of that closed, mostly Parisian, set in which France’s mega-rich, bankers, a few politicians, and top civil servants rub shoulders. Top dogs who for decades have swayed or even dictated French politics on the casual assumption that they know what is best for the country.
This milieu is Breton’s comfort zone: he likes to please and knows how to. He has a knack for speaking in a calculated way that shakes up his audience without going so far as to shock them.
Anointed by Arnault
Breton has never managed to fully conceal his taste for power. He is a leading representative of this moneyed clique. His words carry weight not only because of who he is but also because of what he represents: he has been anointed by none other than Bernard Arnault, France’s richest citizen and the world’s third wealthiest. For years, Breton has chaired the foundation Arnault established in Belgium to oversee his estate, and in that capacity serves as Arnault’s executor.
LVMH, Arnault’s world-leading luxury goods empire, is dear to Macron’s world and has served the president well, providing a home for his former special adviser Ismaël Emelien after the latter’s stint in the Elysée Palace came to a premature end amid the Benalla scandal, involving the president's former security aide Alexandre Benalla.
Was Breton’s induction as custodian of the LVMH empire and of Arnault’s personal fortune a gesture of thanks? In 2005, when Breton was finance minister, Arnault began organising his estate and moving his money to Belgium. He set up a holding company, Pilinvest, a family office that now controls all companies in the LVMH group and into which Arnault moved 90 percent of his shares and then transferred their bare ownership to his children, while maintaining the usufruct (the right to dividends) for himself. To complete the arrangement, a foundation, Proctinvest, chaired by Breton, was created to ensure the integrity of the empire that Arnault built.
The object of this elaborate exercise was allegedly to avoid gift and inheritances taxes. In 2013, when Arnault was quietly seeking Belgian citizenship, the French investigative weekly Le Canard enchaîné reported that the corporate arrangement had cut LVMH’s tax bill from 45% to 6%. A veritable scandal broke out. Breton told the paper that he knew nothing about any of it. This was the same Breton who, despite sitting on the board and chairing the audit committee of specialty chemicals producer Rhodia between 1998 and 2002, said he was unaware of any wrongdoing at the company before its meltdown a few years later.
Nevertheless, Breton was a man to be trusted in the Arnault empire. Aside from his role in the foundation, in July 2008 he was appointed to the board of food retail giant Carrefour – in which family holding company Groupe Arnault is a major shareholder – at the same time as Nicolas Bazire, one of Arnault’s closest associates in LVMH. No doubt it was deemed necessary to give Breton – officially at odds with then president Nicholas Sarkozy, whom Breton had taken to task for having allowed France’s debt to slide during Sarkozy’s own brief (2004-2005) stint as finance minister – something to do until he took up a job big enough for him at Atos, from 2009.
The Breton-Sarkozy spat was all for show: the two men share friends, business-world backers and, above all, political vision. It was under Sarkozy’s reign at the finance ministry that the state’s share of France Télécom (now Orange), headed by Breton at the time, fell below 50%, a development very much favoured by Breton.
Breton's liabilities
And when Breton took the helm of the finance ministry in 2005, he continued the process of privatising state utilities set in motion by his predecessor. In the case of Gaz de France (GDF) this entailed a controversial merger with Suez, a formerly state-owned water and power company, so as to ward off a hostile takeover bid by Enel, Italy’s largest electricity firm. Breton’s gambit required getting parliament to sign off on GDF’s privatisation. The plan was given a boost after Sarkozy, who (like the bulk of the political left) had opposed the merger when he was interior minister, flipped in favour of it during the 2007 presidential race that he went on to win. GDF Suez (now Engie) came into being in July 2008 as the world’s second-largest utility.
Critics of the two sell-offs say they have deprived the French state of the power to reshape national energy policy and point to the 50% hike in the consumer cost of gas and 49% for electricity over the past 10 years." src="http://placehold.it/960x360" alt="" id="a6e971c8-f670-11e9-b97b-000c29f3dae3" data-insert="options%5Blegend%5D=&options%5Bhighlight%5D=0" />
Squeaky clean, again
As finance minister, Breton also oversaw the nitty-gritty of privatising France’s motorways in 2005, seen by many as another case of flogging off a public good to greedy private interests, and one repeatedly damned by the state auditor and competition authority. But, true to form, Breton has since managed to disassociate his name from the scandal, leaving former prime minister Dominique de Villepin to carry the reputational can.
Breton has also managed keep his name out of the France Télécom scandal. While there’s no doubt he turned the company around (albeit with considerable financial help from the state), and launched its internet-for-all plan, this came at a heavy cost to the workforce. The first layoffs and restructuring took place in 2003, when Breton was in charge, and accelerated under his hand-picked successor, Didier Lombard, in his quest to boost cash flow and share dividends.
Earlier this year, seven former France Telecom bosses, including Lombard, went on trial on a charge of “institutional harassment” – or bullying – linked to a wave of staff suicides a decade ago as the newly-privatised firm strove to cut a fifth of its workforce. Almost all of those in the dock were among Breton’s inner entourage when he ran the firm.
Similarly, much fanfare has accompanied the stellar progress of Atos, which has emerged as one of the world’s top five global digital services companies under Breton. But this exceptional growth, achieved through buyouts (of Bull in particular) and stock market battles, has relied heavily on state contracts and European aid (to the tune of more than 100 million euros). In 2016, IFRAP, a French thinktank seen by some as the mouthpiece of neoliberal interests, published a paper by Breton in which he called for a European defence and security fund. Atos would do very well out of such an entity.
And Atos had its own collateral damage: in 2015 company managers were told to get rid of undesirable employees and that no older, disabled, or unionised candidates should be appointed to internal job vacancies. Here again, Breton himself, an inveterate champion of raising the national retirement age, escaped criticism.
Next stop Brussels?
If Breton does become France’s EU commissioner, how would he deal with the companies he used to run, companies that one day might well come begging to the EU, or fall under its purview? Would he recuse himself? More broadly, what stance would he take? Certainly, one in favour of digital innovation, stringency, and greater European integration. But he is less likely to tackle inequality and tax havens, or to champion the changes required to meet ecological challenges.
In this regard, Breton would find himself on common ground with former IMF chief Christine Lagarde, who was recently appointed to head the European Central Bank. The trouble is that Breton testified against Lagarde in her trial over a complex case of compensation paid to businessman Bernard Tapie when Lagarde was finance minister. Lagarde was found guilty of negligence in 2016, but escaped a criminal sentence.
While this may be the stuff of grudges, Macronism tends to work its own miracles, overcoming conflicts of interest and business shenanigans. Perhaps it will manage to bury this hatchet too.
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- The French version of this article can be found here.
English version by Anthony Morland