BlackRock Becomes a Symbol for Anticapitalist Fervor in France
Suspicions
that the Wall Street giant sought to influence President Macron’s
overhaul of the nation’s pension system have made the company a target
of protesters.
PARIS — The video
shows footprints in blood-red paint tracked by militant protesters
across BlackRock’s French headquarters. Documents litter the floors. On
the walls, black spray-painted graffiti denounces the company as
“criminal.”
Just a few months ago,
BlackRock, the U.S. money-management giant, was barely known to the
general public in France. But as President Emmanuel Macron presses ahead
with a controversial campaign to overhaul the French economy, the
company has become a favorite target for growing anticapitalist
sentiment.
Protesters claim BlackRock
has tried to influence — and stands to profit from — Mr. Macron’s
overhaul of the nation’s pension system. They point to cordial meetings
between Mr. Macron and Laurence D. Fink, the founder and chief executive
of BlackRock. And they fear the huge Wall Street firm — its $7 trillion
under management is more than twice France’s economic output — is
working behind the scenes to pick apart the country’s system of social
protections.
The protests escalated
with the action on Monday morning, when environmental activists who
allege French workers’ pensions could be directed by BlackRock stormed
the company’s offices.
Last
month, trade unions and members of the Yellow Vest movement led a
raucous crowd to the historic Le Centorial building, where BlackRock has
its offices, lighting flares and denouncing what they said was an effort to impose American-style free-market rules on France.
There
is no evidence that BlackRock influenced Mr. Macron to push retirement
savings to it or any other financial giant, although financial firms
could get some business from part of the pension overhaul that
encourages high earners to invest in stocks.
And
BlackRock strenuously denies the claims. “We deplore the fact that our
company continues to be caught up in an unfounded controversy driven by
political objectives,” it said in a statement. “We reiterate that
BlackRock has never been involved in the current pension reform project
and does not intend to be.”
Yet
BlackRock’s role as an adviser to governments and central banks and as a
major shareholder in some of the world’s biggest companies has quickly
made it a symbol in a country that has long been deeply skeptical of
capitalism and the stock market. The social climate here has grown more
tense after recent nationwide strikes to protest the pension overhaul.
BlackRock
has tried to portray itself as an industry leader in responsible
investing. The protesters on Monday cited BlackRock investments in the
French oil giant Total and the construction company Vinci as running
counter to that.
In an influential annual letter to leaders of the world’s largest companies, Mr. Fink said
last month that his firm would make investment decisions with
environmental sustainability as a core goal. On Wednesday, BlackRock
said one of its fast-growing green-oriented funds would stop investing in companies that got revenue from the Alberta oil sands.
Such
actions have done little to placate the company’s growing cadre of
critics in France, where it manages 27 billion euros in assets for local
clients and invests over €185 billion, or $200 billion, in French
equities and corporate and government bonds.
Parliament will start debating next week the bill that aims to overhaul
the nation’s convoluted pension system. Although the system has been
criticized for being too generous, the incidence of poverty among older
people in France is one of the lowest in the world — and far lower than
in the United States.
The
measure seems likely to pass because Mr. Macron’s party commands an
absolute majority, despite attempts by opponents to obstruct the bill
with more than 22,000 amendments. It is expected to move to the Senate
in April.
In the meantime, more
demonstrations have been called, including new strikes and protests on
Thursday. BlackRock is likely to remain a ripe target for frustration.
The
controversy broke open in December when Mr. Macron unveiled details of
his proposal to standardize France’s 42 public and private pension
schemes into one state-managed plan. Critics had already accused the
president, a former investment banker, of favoring the rich with
an earlier measure to reduce taxes on high earners, a step that
resonated in a country where wealth is increasingly associated with
injustice.
Opponents seized on a public BlackRock analyst note
describing pension investment options in France — a sign, they said,
that Wall Street’s biggest asset manager was seeking to profit.
The
document noted that the investment-wary French hold huge piles of
savings in cash, bonds and nonfinancial assets but “disappointingly”
little in stocks. (A recent study by the International Monetary Fund
showed that only 5 percent of French households’ total financial assets
are in stocks. That figure is nearly 34 percent for U.S. households,
according to 2016 data from the Organization for Economic Cooperation
and Development.)
Soon, activists
began circulating photos on social media of Mr. Fink sitting next to Mr.
Macron at a green finance summit in the Élysée Palace in July as proof
of chummy ties.
French media ran articles
highlighting BlackRock’s assessment as a sign that the company is eager
to see France’s state-run pension scheme tilt toward the American
system, where workers often save for pensions through investments.
In
reality, Mr. Macron’s blueprint would instead largely keep France’s
publicly funded pay-as-you-go system in place, a point some trade unions
have recently acknowledged. An editorial on Wednesday in the French
economic magazine Le Point defended BlackRock as being the victim of
“conspiratorial diatribes,” adding that the company was being made into a
“new French scapegoat.”
Opponents insist that Mr. Macron’s plan still opens France to the influence of companies like BlackRock.
They
point to a measure that would cut pension payroll taxes on people
earning more than €120,000 annually — less than 1 percent of France’s
work force — and encourage them to invest in private pension funds.
Addressing
the National Assembly, Olivier Marleix, a conservative lawmaker from
the party Les Républicains, said the proposal would divert money away
from France’s social safety net. “You are offering three billion euros
to pension funds,” he said. “BlackRock’s business will thrive in
France.”
It didn’t help BlackRock’s
image among dissidents when Mr. Macron elevated the president of
BlackRock France, Jean-François Cirelli, a former civil servant who
worked for two previous French presidents, to the rank of officer of the
Legion of Honor, France’s highest order of merit, just as strikes over
the pension changes reached a peak in early January.
The
news lit up social media and triggered a fresh storm of criticism that
the American fund was too cozy with Mr. Macron, and would profit from
the pension changes.
“BlackRock is simply the dark side of the pension reform,” Olivier Faure, the secretary general of the Socialist Party, told French television.
Mr. Cirelli hit back at what he said was “an unfounded and irrational” controversy.
“We
are being used for political ends in a conflict that is not ours,” he
said, adding that BlackRock “is not a pension fund, does not distribute
any retirement savings product and has no intention of doing so.”
Such
statements have not appeased opponents. “BlackRock is an emblem,” said
Benoît Martin, the head of the Paris branch of the militant General
Confederation of Labor union. Mr. Martin said he was among the first
wave of protesters to storm BlackRock France’s headquarters in January.
“You
have Larry Fink meeting with President Macron,” he added. “We’re
concerned about the influence of BlackRock in French politics.”
The
union has called for more demonstrations and strikes to protest the
changes. And BlackRock, Mr. Martin said, is likely to remain a target.
Youth
for Climate France, one of the groups that ransacked the offices on
Monday, said in a statement that the protests were “symptomatic of
capitalism, which is at the origin of these problems.”
“By attacking BlackRock, we’re attacking capitalism,” the group said.
Constant Méheut contributed reporting.
Liz
Alderman is the Paris-based chief European business correspondent,
covering economic and inequality challenges around Europe. She was
previously an assistant business editor, and spent five years as the
business editor of what was The International Herald Tribune. @LizAldermanNYT
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