What is Corporate Welfare

Economic and Government Policies France June 25, 2016By: Paul Young, CPA, CGA

1

This presentation is one perspective when it comes to government and economic policies for the France

Paul Young - Presenter

BioCPA/CGA25 years of experience in Academia, Industry and Financial solutionsYoutube Channel - https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg

AgendaGDP GrowthTradeCanada and France TradeGDP / SectorDebt to GDPDeficits/Surplus Business Taxation Banking SectorForeign Direct Investment

GDP / Growth - France

Source: http://www.gbm.scotiabank.com/English/bns_econ/forecast.pdf

http://www.gbm.scotiabank.com/English/bns_econ/forecast.pdf

5

France / Trade

hhttp://www.worldstopexports.com/frances-top-10-exports/

6

France / Trade Export Partners

http://www.countryaah.com/France_Trade_Partners.html

7

Canada and France Trade

Source: http://www.amb-canada.fr/pdf/CF_English_Summary_february_2016.pdf

http://www.amb-canada.fr/pdf/CF_English_Summary_february_2016.pdf

8

GDP by Sector France

http://www.insee.fr/en/themes/info-rapide.asp?id=26

9

Debt to GDP France

http://www.tradingeconomics.com

France even has a favourable demographic outlook, with a birth rate just above replacement level mainly among its immigrant population. They are simply too large to fail.But Italy and France share problems of slow growth, unemployment, poor public finances and structural problems. They have found it difficult to reform and face an increasingly tough political environment.

Source:http://www.independent.co.uk/voices/france-and-italy-next-economic-crash-europe-a7054801.html

http://www.tradingeconomics.comhttp://www.independent.co.uk/voices/france-and-italy-next-economic-crash-europe-a7054801.html10

Surplus (Deficits) / GDP

Michel Sapin, finance minister, said the deficit was 3.5 per cent of gross domestic product in 2015, better than the expected 3.8 per cent. Growth is expected to accelerate this year, to 1.5 per cent, after1.2 per cent in 2015, he said.We ensured in 2015 a deficit reduction that was compatible with a return to growth, Mr Sapin said on Friday. We will continue in 2016 and 2017 to reduce deficits while also funding our priorities, by decreasing taxes and solidifying growth and employment.

Source: https://next.ft.com/content/53a8f202-f267-11e5-aff5-19b4e253664a

http://www.tradingeconomics.com

11

Taxation Policies France

VAT 20%Corporate Tax rate 34.4%Social Security tax 3% of Gross Payroll Income

http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-francehighlights-2016.pdfhttps://www.french-property.com/guides/france/working-in-france/starting-a-business/other-business-taxes/vat/http://taxfoundation.org/article/corporate-income-tax-rates-around-world-2015http://www.pwc.com/gx/en/tax/corporate-tax/worldwide-tax-summaries/assets/pwc-worldwide-tax-summaries-corporate-2015-16.pdf

12

Banking Sector - FranceMoody's Investors Service has changed the outlook on France's banking system to stable from negative, reflecting the gradually recovering domestic economic climate and the banks' strengthened balance sheets.Moody's report, entitled "Banking System Outlook: France," is available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release."French banks have made strides in improving their financial metrics. Asset quality continues to improve, and France's five largest banks currently have a liquidity coverage ratio of above 100%," says Laurent Le Mouel, a senior analyst at Moody's."Absent any confidence shock within the euro area, we expect domestic operating conditions to improve slightly over the next 12 to 18 months, which combined with the ECB's accommodative monetary policy stance will help support spending and investment." Moody's forecasts France's real GDP growth to reach 0.8% in 2015 and up to 1.5% in 2016.In addition, reduced appetite across Europe to provide public support to ailing banks - the overriding factor driving its negative outlook for the French banking system in 2014 - is now fully factored into French banks' ratings: for most French banks, indeed, the impact of reduced government support is offset by a low level of potential losses for senior debt and depositors.Moody's notes that French banks have increased their deposit base against a backdrop of low interest rates. Nonetheless, the significant use of more volatile capital market funding remains a source of vulnerability, partly mitigated by the slightly longer duration of such funding and increased liquidity reserves.The negative impact of low interest rates is being offset by an increase in non-interest revenues from asset management and insurance activities, as well as fees received on the refinancing of housing loans and lower funding costs, says Moody's.Exposure to weaker countries within the euro area and Central and Eastern European countries remains a risk for French banks, although these exposures have decreased, says Moody's. In addition, French banks are now sufficiently well capitalised to withstand substantial losses, in Moody's view, given the sector-wide Tier 1 ratio of 14% at end-2014, up from 13% a year previously.Moody's expects that French banks' level of problem loans will likely stabilise in 2015, with a possible rise in 2016.The rating agency expects underlying profitability trends to remain stable or slightly positive for French banks, on the back of modest revenue growth and efficiency gains through the completion of cost-cutting plans.The improved profitability trend will likely enable banks to further bolster capital ratios in an environment of subdued but accelerating credit growth, says Moody's. It notes that while growth in lending to corporates picked up slightly in early 2015 - with the trend likely to continue in 2016 - the high savings rate of French households, combined with French banks' conservative lending policies, will likely keep credit growth in check.

Source - https://www.moodys.com/research/Moodys-changes-outlook-on-Frances-banking-system-to-stable-from--PR_330718

13

FDI - France

1. https://en.portal.santandertrade.com/establish-overseas/france/foreign-investment14

France Government PM Francois Hollande Francois Hollandes approval rating fell to a record low as his attempts to fight unemployment and improve security draw fire even from his own supporters.Hollandes popularity dropped 4 percentage points in a month to 17 percent in March, the Elabe polling institute said, eclipsing the 18 percent low he set in October. Prime Minister Manuel Valls, who took office in April 2014, also slipped 4 points, to 23 percentNow, with just a year to go until he faces what already seems a near-hopeless quest for re-election, Mr Hollande is confronted by the biggest challenge to his flagging authority to date led by the hardline CGT trade union and its old-style militant leader,Philippe Martinez.The Socialist president has during his term swerved around huge demos against same-sex marriage, a street revolt against high taxes led by the feisty farmers and employers of Brittany and, more recently, a mainly student-led revolt against his plan to relax Franceshighly prescriptive labour laws.

http://www.bloomberg.com/news/articles/2016-03-03/hollande-s-popularity-plumbs-record-low-in-french-opinion-pollhttps://next.ft.com/content/61c5bcae-232b-11e6-9d4d-c11776a5124d15

Contact/other sourcesContact: paul_young_cga@Hotmail.com