17/10/2014 - Full implementation of the structural reforms adopted and announced in France would boost potential annual economic growth by one third, or 0.4 percentage points per year over ten years, according to the OECD.
In a report entitled Structural reforms in France: Impact on growth and options for the future, which OECD Secretary-General Angel Gurría will present this evening to French President François Hollande at a meeting between the French government and the heads of international economic organisations, the OECD indicates that the reforms that have been initiated and announced will have a significant effect on productivity and competitiveness. The resulting boost to growth will be partly channelled through a higher employment rate.
Securing these gains will require full implementation of the measures of the Responsibility and Solidarity Pact and the reforms that have been launched to simplify administrative procedures, taxation and sub-national government structures.
OECD Secretary-General Angel Gurría welcomes the reforms that have been launched, but stresses that “the much hoped-for recovery can only gather pace if these reforms are pressed ahead, to continue to restore confidence, achieve increased productivity and improve competitiveness. The structural reforms started in 2012 will have to be intensified to put the French economy on the road to even stronger – and more inclusive – growth.”
It is essential that the French government press on with the measures that are being prepared for regulated professions and the gas and electricity industries. The key points of the law “pour l’activité”, presented on 15 October, support these measures, and also introduce further measures that will have a positive effect on competition, which will in turn benefit consumers, increase labour market flexibility, encourage employee savings schemes, simplify employee shareholding, and modernise state ownership.
In the coming years, these structural reforms should not only be fully implemented but taken further, to continue to reduce the dualism of the labour market, strengthen the finances of the pension system and rationalise public spending. Taken as a whole, these measures will generate synergies, helping to promote confidence and establish the right conditions for investment. They must also be supported by a complete reform of welfare and education policies, a process that has partly begun. In turn, these reforms will promote job creation and solidarity, by improving governance and reducing policy fragmentation.
The OECD stands ready to support the French government’s reform process, to increase growth and improve the quality of life of French people.