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OECD Economic Surveys: France 2005

image of OECD Economic Surveys: France 2005

This 2005 OECD Economic Survey of France focuses on three key challenges faced by France: making the fiscal system sustainable, improving labour market performance, and product market competition. The chapter on the fiscal system includes annexes on ageing and health care expenditure and reforms to the health care system. The chapter on labour markets includes annexes showing the evolution of employment protection legislation and analysing collective bargaining reform of April 2004.

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Assessment and Recommendations

After a weak performance in 2000-03 output growth recovered in 2004, somewhat more strongly than in most euro zone countries. It reached 2¼ per cent but, as in the rest of the euro zone, weaker growth is likely in 2005-06, while unemployment remains stubbornly high, currently around 10%. The origins of poor labour market performance, a central challenge for French policymakers, lie in a combination of measures themselves designed to protect workers, notably a high minimum cost of labour and strict employment protection legislation, as well high tax wedges on labour; a lack of competition in a number...

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