Making good on her promise of last fall, Christine Albanel, France’s minister of culture and communications, outlined an overhaul of her country’s auction system in an April 2 press conference in Paris. Measures to encourage citizens to collect contemporary art accompanied the reforms.

Albanel’s “renewal plan” was drafted in accordance with President Nicolas Sarkozy’s election pledge to boost the sagging French art market. It was based on 37 proposals contained in the Bethenod Report, recommendations drawn up by a five-person panel led by FIAC co-director Martin Bethenod.

France’s annual auction earnings exceed €1.3 billion ($2 billion), with private sales taking in “probably five times that much,” according to Albanel’s report. Impressive as those figures may seem, she noted with alarm that the auction earnings amount to just 6 percent of global auction income (France recently slipped to fourth in the world’s market ranking, behind China) and that art exports surpass imports in value by a margin of two to one. While enumerating the market’s weaknesses, Albanel claimed to see a “real lust for art” among the French, evidenced by the huge number of visitors to events such as the Paris Biennale (100,000) and FIAC (80,000). To persuade this nation of art lovers to become art buyers, she has suggested monetary incentives, such as tax breaks for those who give works to the state, the possibility of donating artworks in lieu of paying income tax, and interest-free bank loans for young patrons, modeled on the U.K.’s Own Art program. The last notion has been greeted with skepticism. The Paris dealer Daniel Templon sniffs that these loans would “change nothing,” while the French collectors Daniel and Florence Guerlain note that galleries often allow buyers to make payments without interest.

Albanel’s plan to make the French art market more competitive was better received. She is calling for auction regulations to be “eased and modernized” in line with the European Union’s new business-friendly services directive. For the first time, French houses would be allowed to make vendor guarantees; sell works they own; conduct private sales (which now account for around 10 percent of Christie’s and Sotheby’s global turnover); negotiate aftersales transactions without restrictions (currently such deals must be completed within 15 days of an auction, and nothing can be sold for a price lower than the last bid); and carry out estate inventories, a function hitherto reserved for state-appointed commissaires-priseurs judiciaires. Among the proposals that would have the most impact are fiscal reforms that would require the French government to lobby the EU. One is for the droit de suite resale tax to be charged on the profit margin, rather than the total purchase price, and applied to works by living artists only, as in the U.K., instead of extending, as is done now, to artists who have died within the past 70 years. Another key reform would be to slash from 19.6 percent to 5.5 percent the import VAT on artworks less than 100 years old, notably Art Nouveau and Art Deco objects, manuscripts and jewelry. Not addressed by Albanel are the 1 percent social security tax for artists’ welfare, which French firms will still be required to pay, and the restriction against their selling recently manufactured goods like jewelry.

It is not yet clear whether Albanel will adopt any other of Bethenod’s ideas, such as opening and subsidizing new artist’s studios nationwide or upgrading the facilities at the Grand Palais in Paris, the country’s major art fair venue. Also up in the air is how she will react to his swipe at current state support for artists and cultural events. Terming it inadequate but “all too obvious,” Bethenod exhorted the government to “support more but less visibly.”

Despite some grumbling, however, the response to Albanel’s speech has generally been enthusiastic. Hervé Chayette, the president of the national auctioneers’ union symev, sees in it “a very positive change in the government’s attitude to the market.” The National Antiques Dealers’  Union president, Christian Deydier, says it was “the first time we’ve had a report that sets out all the problems facing the market. It shows real determination to do something about the inadequate reform of 2001,” which, among other modifications, allowed firms to set their own buyer’s premium in place of the previous low, mandatory rate and introduced the Conseil des Ventes, the state auction watchdog.

“The measures can only help us develop our business in France,” says François Curiel, the head of Christie’s Europe, “and could breathe new life into the Art Deco market and make the city a major center for jewelry sales.”

Christie’s and Sotheby’s are set to increase their Paris staffs. But the Sotheby’s Paris boss, Guillaume Cerutti, regrets that Albanel did not act on Bethenod’s call for a spokesman to promote the proposals during France’s upcoming EU Council presidency, which begins in July. He also frets that no timetable has been set for implementing the changes. Albanel has merely stated that she wants them “adopted rapidly.” Just what that means in a country whose auction laws were barely tinkered with between 1556 and 2001 remains to be seen.

"Market Uplift" originally appeared in the June 2008 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's June 2008 Table of Contents.