2009 OECD Economic Surveys: France 2009

image of OECD Economic Surveys: France 2009

The French economy has not escaped the severe recession gripping all developed countries, but it should be less deep than elsewhere due to powerful automatic stabilisers. Nevertheless, the crisis will leave public finances in a serious condition. This 2009 edition of OECD's periodic survey of the French economy includes chapters covering coping with recession, labour market reforms, restoring French competitiveness, and strengthening competition.

English Also available in: French

Strengthening competition to boost efficiency and employment

Despite the great progress France has made in opening its markets for goods and services, and in strengthening the overall framework for competition, there are still regulatory barriers to entry in many sectors, particularly in retail trade and various professional services. This chapter traces the most significant changes that have been made in competition policy in recent years, and looks at the main challenges. In terms of the competition framework, an important step was taken with the creation of a new Competition Authority, which now exercises substantial powers that were previously in the hands of the Ministry of the Economy. In the retail trade sector, the amendments to the Economic Modernisation Act have moved further along the path of reform that began some years ago, without lifting the prohibition on resale below cost (RBC), but easing the conditions of negotiation between suppliers and retailers. While these changes should help lessen upward pressure on prices, particularly for “brand name” products, it would be necessary to repeal the Royer-Raffarin laws on commercial zoning to encourage the development of large retail outlets while ensuring greater competition in the many areas where largescale retailers are concentrated. Moreover, there are relatively high regulatory barriers to entry in many professional services, including legal services and healthcare. OECD indicators show that the restrictive nature of regulation in certain professions varies greatly from country to country and suggest that French entry barriers and restrictions on practice in many cases exceed what is necessary for adequate consumer protection. In the case of telecommunications, one of the main challenges for government is to promote broader access to high-speed Internet service through prompt deployment of a fibre optics network, while at the same time trying to repeat the successful development of ADSL in terms of competition and investment. Finally, the emergence of real competition in the retail market for gas and electricity is constrained by several obstacles, the most important of which is the presence of regulated prices along with market prices. 

English Also available in: French

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