While INSEE is to publish on Thursday its monthly report on the economic situation of France, the OECD presented its latest economic study to boost growth and employment in the country . A report followed closely by French Finance Minister Michel Sapin.
“France has many assets,” said the OECD. “But the potential GDP growth slowed in part because of the crisis; the economic recovery has been disappointing; and unemployment is high and continues to rise. ”
The protection granted to workers on a CDI contract created “a barrier to mobility”.
The OECD said that the biggest challenge to face France was reform of the labour market, in order to promote job creation. The protection offered to employees in indeterminate employment contracts is a barrier to labor mobility despite advances permitted by the reforms of collective redundancy procedures and the establishment of contractual termination procedure.
To reform it, they propose to “simplify and shorten dismissal procedures and further reduce the fiscal and social wedge, that is reform and reduction of taxes.”
Another problem that needs attention is public spending. “At 57% of GDP, it is too high,” said the organization, adding that “several weaknesses in product markets also affect economic performance.”
The OECD provides several ideas such as reducing the number of municipalities , close some small public hospitals, and use more day surgery and generic drugs. Change the settings of supplementary pensions to ensure their sustainability in the context of the negotiations between the social partners in 2015 and continue reducing the specific characteristics of special pension schemes. Change the settings of unemployment allowances regime, including their duration and make it conditional that claimants are actively seeking employment or training.
The OECD also recommends to “intensify efforts to reduce the complexity of the labour code, standards and regulations imposed on businesses, the structure of regional and local governments, and tax and pension systems.”
To improve the competitiveness of the economy and the business environment, the OECD proposes to “appoint an independent institution a full review of all the regulations in place,” “continue simplifying complex procedures for opening large surfaces, “and” continue to liberalize regulated professions by limiting the fields of activity over which they have exclusive rights. ”
The OECD also calls for “providing a quality education and professional training for those who need it most,” attracting “highly qualified teachers in vocational schools and providing more individualized support for students whose skills base are deficient. “
