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Good news for the French recovery

In a study published on 2011, April the 11th, 2011, the General Secretary of the OECD (Organization of Cooperation and Economic developments), Angel Gurria announced that the real growth of France should reach2 % in 2011.

In a study published on 2011, April the 11th, 2011, the General Secretary of the OECD (Organization of Cooperation and Economic developments), Angel Gurria announced that the real growth of France should reach2 % in 2011. By raising its previous forecast, the OECD actually meets the figure announced by the French government.

The recovery thus seems here engaged even if it still remains low towards the shock of the recession begun in 2008 which hardly affected both the public finances and the employment in France. The OECD seems all right with the IMF (International Monetary Fund) considering that the economic recovery will be slow. The domestic consumption is penalized by the purchasing power and by the strong unemployment rate especially for the young people and the seniors, the exports suffer from the poor international demand, and it is still so urgent for the public authorities to clean up their finances. On this particular point, the OECD urges France to act very fast on its expenses by improving the efficiency of the public utilities, by mastering the health expenses and by pursuing the engaged reforms on pensions. THE OECD also suggests increasing receipts by reducing the little productive fiscal “niches” and to intend to raise some taxes linked to the environment and the property and even the VAT.

We shall soon know if Paris makes a commitment to follow these recommendations because a new macroeconomic trajectory for the 2011-2014 period must be soon presented. It will be as well the opportunity to define the planned measures aiming to reduce the public deficit at present estimated by Minister of Finance Christine Lagarde at 5.7 % of the GDP for 2011 for 3.7 points to reach the 2 % awaited for 2014. These measures should have in the short term only one objective: act for the employment. Indeed, as underlines it the OECD, in this domain, France has difficulty in paying off the economic shocks, in bouncing after the crises with high social security contributions, a high minimum wage too and a poor social dialog.

Besides and without any doubt, a better rate of employment would strengthen the social cohesion and the standard of living and in the same time would relieve the public finances.

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