OECD Says France Must Pursue Greater Reform
The latest survey of France’s economy by the Organization for Economic Co-operation and Development (OECD) has highlighted an urgent need for more reform.
The report highlights policies that are contributing to slow economic growth in France. In particular, it criticizes the “excessive tax burden” and overly complex administrative procedures, which are said to inhibit competition. OECD Secretary-General Angel Gurría said: “Achieving stronger, more inclusive, sustainable growth will require additional reforms that substantially improve the outlook for growth and job creation.”
The report recommends encouraging business by reducing the rate of corporation tax. It also notes that many of the extensive regulations, quotas, and tariffs applying in France are anti-competitive and should be eased.
The report is especially concerned with the high level of tax on labor, as France is home to one of the highest burdens in the OECD. It stressed that tax cuts in this area are of paramount importance and should be funded by reductions in public spending. Other measures to aid employment should concentrate on vocational training: a broadening of the payroll tax base; and improved tax incentives for training and apprenticeships.
