www.oecd.org/economy/surveys/economic-survey-france.htm

OECD

OECD Economics

2015 OECD ECONOMIC SURVEY OF FRANCE

Growth and jobs

Paris, 2 April 2015

2

3

Well-being is high

http://dx.doi.org/10.1787/888933192276

Source : OECD (2014), OECD Better Life Index , www.oecdbetterlifeindex.org.

Better life index, 2014Index scale of 0 to 10, from lowest to highest level of life quality

0 1 2 3 4 5 6 7 8 9

10Income and wealth

Jobs and earnings

Housing

Work and life balance

Health status

Education and skillsSocial connections

Civic engagement andgovernance

Environmental quality

Personal security

Subjective well-being

France

OECD

4

Income inequality is moderate

http://dx.doi.org/10.1787/888933192276

NORDNKCZEFINBELSWENLDAUTDEUIRLPOLFRA

1. Latest available year.Source: OECD, Income Distribution and Poverty Database.

0

5

10

15

20

25

30

35

40

45

0

5

10

15

20

25

30

35

40

45

NOR DNK CZE FIN BEL SWE NLD AUT DEU IRL POL FRA KOR CAN ITA NZL AUS GRC PRT ESP GBR USA

Gini index after taxes and transfers, per cent¹

5

But per capita growth has been weak for some time (I)

http://dx.doi.org/10.1787/888933192276

ITAFRAGRCDNKPRTBELFINESPCANDEUNLDUSA

Source : OECD, National Accounts and Economic Outlook 96 Databases .

0

1

2

3

4

5

0

1

2

3

4

5

ITA FRA GRC DNK PRT BEL FIN ESP CAN DEU NLD USA AUT NZL SWE CZE NOR GBR AUS IRL POL KOR

Annualised real per capita GDP growth, 1990-2014% %

6

But per capita growth has been weak for some time (II)

Source : OECD, National Accounts and Economic Outlook 96 Databases .

-5

-4

-3

-2

-1

0

1

2

3

4

5

1990 1994 1998 2002 2006 2010 2014

France

OECD

Annual % change

90

100

110

120

130

140

1990 1994 1998 2002 2006 2010 2014

France

OECD

Index, 1990=100

Real per capita GDP growth

7

And unemployment is still high, especially for youths

Source: INSEE.

0

4

8

12

16

20

24

28

0

4

8

12

16

20

24

28

2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Unemployment rate

Total Youths (15-24)

As a percentage of the labour force As a percentage of the labour force

http://dx.doi.org/10.1787/888933192282

8

Main findings

o Boosting medium-term growth will require continuing and deepening structural reforms.

o High public spending has led to high taxes, including on labour.

o The labour market remains inflexible.

o The low-skilled and unemployed lack training opportunities.

o Weak competition, notably in some services sectors, hurts growth.

9

Key recommendations

o Implement additional structural reforms to improve the outlook for growth.

o Make targeted reductions in public spending to cut taxes in the medium term.

o Redouble efforts to reduce complexity, notably of the labour code and lay-off procedures.

o Improve the quality of vocational education, concentrating it on the neediest.

o Move faster to eliminate economic rents and privileges to boost employment, equity and competition.

The challenges

11

Activity continues to stagnate

http://dx.doi.org/10.1787/888933192282

Source: OECD, Economic Outlook 96 Database (and updates).

-8

-6

-4

-2

0

2

4

6

8

-8

-6

-4

-2

0

2

4

6

8

2008 2009 2010 2011 2012 2013 2014

Real GDP growthYear-on-year percentage change

France Germany United Kingdom United States

12

Business investment is weak

http://dx.doi.org/10.1787/888933192282

Source: OECD, Economic Outlook 96 Database (and updates) .

-20

-15

-10

-5

0

5

10

15

-20

-15

-10

-5

0

5

10

15

2008 2009 2010 2011 2012 2013 2014

Business investmentYear-on-year percentage change, volume

France Germany United States

13

Export performance has not improved

1. Difference between export growth and export market growth, in volume terms.Source: OECD, Economic Outlook 96 Database (and updates) .

-4

-3

-2

-1

0

1

2

3

90

100

110

120

130

140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Export market shares and the current account balance

Export performance¹ (left axis) Current account balance (right axis)

Index 2010=100 As a percentage of GDP

http://dx.doi.org/10.1787/888933192282

14

Public debt is still rising

http://dx.doi.org/10.1787/888933192324

1

Source: OECD, Economic Outlook 96 Database (and updates) .

20

30

40

50

60

70

80

90

100

0

1

2

3

4

5

6

7

8

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Public deficit and debt, 1990-2014As a percentage of GDP

General government deficit (left axis)

General government debt, Maastricht definition (right axis)

15

To address these challenges, speed up the pursuit and

implementation of ambitious structural reforms

16

Full implementation of structural reforms will pay off

Source : OECD (2014), France, Les réformes structurelles : impact sur la croissance et options pour l'avenir,OECD Publishing.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2020 2025

Impact of major structural reforms engaged between 2012 and October 2014

Impact on GDP (%)

Reforms engaged

Reforms announced

17

Make green growth a priority

http://dx.doi.org/10.1787/888933192487

Raise environmental taxes, notably on diesel, to reduce pollution

USACANOECDESPSVKFRACHEPOLBELDEUPRTIRL

Source : OECD, Environmental Taxation Database.

1. 2011 for Belgium, Greece and the Netherlands; environmental taxes cover taxes on energy products (including electricity, petrol, diesel and other fossil fuels), automotive vehicles, transportation, waste management, substances that deplete the ozone layer, and other environment-related taxes.

0

1

2

3

4

5

0

1

2

3

4

5

USA

CAN

OECD ES

P

SVK

FRA

CHE

POL

BEL

DEU

PRT

IRL

GBR

SWE

AUT

EST

GRC

CZE

HUN

ITA

FIN

NLD

DNK

SVN

Environment-related tax revenues, 2012¹As a percentage of GDP

Lower public spending substantially in the medium term

19

Focus budgetary consolidation on public spending

http://dx.doi.org/10.1787/888933192332

KORCHEAUSIRLUSAESTCANSVKISRPOLCZENZL

Source: OECD, Economic Outlook 96 Database .

0

10

20

30

40

50

60

0

10

20

30

40

50

60

KOR

CHE

AUS

IRL

USA

EST

CAN

SVK

ISR

POL

CZE

NZL

JPN

ESP

GBR LU

X

DEU

ISL

NLD

NOR

GR

C

SVN

EU15

HUN

PRT

AUT

ITA

BEL

SWE

DNK

FRA

FIN

Government spending2014, as a percentage of GDP

20

High spending means high taxes

http://dx.doi.org/10.1787/888933192342

Source: OECD, Revenue Statistics Database.

30

35

40

45

50

55

30

35

40

45

50

55

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Trends in tax revenuesAs a percentage of GDP

France Germany Sweden Canada

21

The share of public employment is high

Ensure the number of civil servants matches underlying needs

Reform the job mobility rules for public employees

http://dx.doi.org/10.1787/888933192332

CHEJPNGRCMEXNLDKORDEUNZLAUSPRTAUTCZE

Source: OECD, Economic Outlook 96 Database .

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

CHE

JPN

GRC

MEX

NLD

KOR

DEU

NZL

AUS

PRT

AUT

CZE IRL TUR ITA USA

SVK

POL

LUX

ESP

GBR

EU15 SVN

BEL

CAN

HUN

FRA

EST ISL FIN SWE

DNK

NOR

Share of government employment2014, as a percentage of total employment

22

Better control local government operating spending

Reduce the number of local governments and strengthen the role of “intercommunalités”

Rationalise the allocation of responsibilities among all levels of public administration

Eliminate all “general competence” clauses

http://dx.doi.org/10.1787/888933192332

Source: INSEE.

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Local government spendingAs a percentage of GDP

Operating spending

Investment spending

23

Better control social spending (I)

http://dx.doi.org/10.1787/888933192363

MEXCHLKORTURISRESTISLCANSVKAUSUSACHE

Source: OECD, Social Expenditure Database.

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

MEX CH

LKO

RTU

RIS

RES

TIS

LC

AN SVK

AUS

USA

CH

EC

ZEPO

LN

ZL IRL

OEC

DG

BRN

OR

HU

NJP

NLU

XSV

NG

RC

NLD

PRT

DEU ES

PSW

EAU

TIT

AD

NK

BEL

FIN

FRA

Government social spending2014, as a percentage of GDP

24

Better control social spending (II)

Hold down health-care spending: Close small, under-utilised public hospitals, Continue making greater use of ambulatory surgery and generic

drugs, Encourage doctors more to limit their prescriptions.

Ensure that public pensions play their part in reducing public spending as a share of GDP: Modify the parameters of complementary pension schemes, Narrow further the specific features of special pension regimes.

Modify the parameters of unemployment benefits: Plan to reduce their maximum duration when growth picks up, Tighten their conditionality on effective job search or training.

Reform the labour market

26

Restrain labour market duality

http://dx.doi.org/10.1787/888933192402

Simplify and shorten layoff procedures, for example by reforming the labour courts

Improve training and guidance (see below)

Source: OECD (2014), Labour Force Statistics Database.

0

10

20

30

40

50

60

70

80

AU

S

GB

R

DN

K

NO

R

OE

CD

JPN

GR

C

CZ

E

CA

N

BE

L

IRL

AU

T

FIN ITA

DE

U

NL

D

SW

E

FR

A

PR

T

ES

P

PO

L

SV

N

B. Youths (15-24)

0

5

10

15

20

25

30

AU

S

GB

R

BE

L

NO

R

DN

K

AU

T

CZ

E

GR

C

IRL

OE

CD

ITA

CA

N

DE

U

JPN

FIN

SV

N

FR

A

SW

E

NL

D

PR

T

ES

P

PO

L

A. Total

Share of employment under fixed-term contractsAs a percentage of total dependent employment, 2013

27

Lower further the tax wedge and the overall cost of labour

http://dx.doi.org/10.1787/888933192393

Shrink the tax wedge in line with public spending cuts

Avoid any discretionary increase in the minimum wage

IRLCANUSAGBROECDNLDDNKESTESPSVKPRTGRC

Source : OECD, Taxing Wages 2014 .

1. Including employer contributions. The measures of the fiscal and social wedge are computedby assuming that the CICE tax credit would ease the same wedge by 4% of the gross salary, for wages lower than 2.5 times the minimum wage (SMIC).

0

10

20

30

40

50

60

0

10

20

30

40

50

60

IRL

CAN

USA

GBR

OECD NL

D

DNK

EST

ESP

SVK

PRT

GRC

SVN

SWE

FIN

ITA

FRA

AUT

DEU

BEL

The tax wedge, 2013Assessed at 100% of average wage, as a % of total remuneration for work¹

28

Strengthen vocational education and training for those who need it most

Implement a system of quality assurance

Ensure that the regions have the capacity and funding needed to guide candidates

Clarify the responsibilities of the parties involved and align them with control over funds

http://dx.doi.org/10.1787/888933192492

Source : OECD (2013), Skills Outlook 2013 Database.

0

10

20

30

40

50

60

0

10

20

30

40

50

60

Low Medium High Low Medium High

Adults' proficiency, 2013

France

OECD

Numeracy Literacy

% %

29

Develop apprenticeships as from high school

http://dx.doi.org/10.1787/888933192439

Attract highly qualified teachers

Give them credit for professional experience outside of teaching

Provide more individualised support for students in difficulty

Ensure business mentors have pedagogical training

Source: Ministry of National Education, DEPP.

0

50

100

150

200

250

300

350

400

450

0

50

100

150

200

250

300

350

400

450

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Number of apprentices by level of diploma, thousands

Secondary education, short programmesSecondary education, long programmesTertiary education

30

Strengthen competition

31

Continue to simplify the business environment

Implement the measures proposed by the business simplification committee

Charge an independent institution with the task of examining all regulations

http://dx.doi.org/10.1787/888933192453

CANNZLUSAGBRAUSDEUDNKJPNCHLFINNLDNOR

1. 2008 for the United States.Source : OECD (2013), Product Market Regulation Statistics .

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

CAN

NZL

USA

GBR

AUS

DEU

DNK

JPN

CHL

FIN NLD

NOR IRL

CHE

SWE ITA EST

SVK ISR

ESP

AUT

CZE ISL

KOR

GRC

PRT

FRA

SVN

BEL

HUN

Administrative barriers to starting up corporations, 2013¹From most (0) to least (6) favourable to competition

32

Further reduce barriers to competition in retail trade

Simplify approval procedures to open large stores

End restrictions on loss-leader selling and the dates of discount sales

Liberalise shop opening hours while guaranteeing negotiated offsets

http://dx.doi.org/10.1787/888933192748

SWESVNKORNZLNLDCHLCHEAUSISLESTIRLCZE

1. 2008 for the United States.Source : OECD (2013), Product Market Regulation Statistics .

0

1

2

3

4

5

6

0

1

2

3

4

5

6

SWE

SVN

KOR

NZL

NLD

CHL

CHE

AUS ISL

EST

IRL

CZE

DNK

GBR

PRT

NOR

HUN

SVK

JPN

AUT

CAN

GRC

FRA

DEU FIN

ESP ITA

ISR

BEL

Regulations in the retail trade sectorIndex scale from 0 to 6, from least to most restrictive

2013¹ 1998

33

Continue to open regulated professions to competition

http://dx.doi.org/10.1787/888933192463

Limit the activities over which they have an exclusive right

End regulated prices in potentially competitive sectors

Gradually relax quotas

1. 2008 for the United States.Source : OECD (2013), Product Market Regulation Statistics .

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

SWE FIN CHE

CHL

DNK

GBR

AUS

NOR

USA

NZL IRL

NLD ISL EST ITA ESP

JPN

SVK

GRC

AUT

KOR

CZE ISR SVN

PRT

DEU

FRA

BEL

HUN

CAN

Regulation of architectural, accounting and legal services, 2013¹

Index scale from 0 to 6, from least to most restrictive

Codes of conduct

Barriers to entry

More information…

www.oecd.org/economy/surveys/economic-survey-france.htm

OECD

OECD Economics

34

Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.