The positive effects expected from the Macron Law show that France must pursue its structural reform initiatives | WPN World People News

In a note presented to French Economy Minister Emmanuel Macron　on September 18 (only available in French), the OECD estimates that five sets of measures in the Macron Law – the reform of regulated professions, the extension of Sunday and evening trading, the opening-up of passenger coach transport, the simplification of redundancy rules, and easier procedures for obtaining a driving licence – could potentially increase France’s GDP by 0.3% over 5 years and by 0.4% over 10 years.

Other provisions in the law, currently be unquantifiable using existing tools, could also have a positive economic impact. The note, presented by Secretary-General Angel Gurría during a visit by Mr Macron’s to the OECD, also says the synergies between the effects of the reforms and a resulting increase in confidence will be just as important the continuation of the reforms in the future.

These additional results will consolidate the effects of the reforms undertaken since 2012, which, in October 2014, the OECD estimated would boost GDP by 1.5% over 5 years and by 3.5% over 10 years.

“In the context of a fragile global economy, the Law for Growth, Activity and Equality of Opportunities shows that each economic sector can and must help enhance the dynamism of the French economy,” said Mr Gurría. “There can be no exceptions and the reforms need to be reinforced.”

In a speech to mark Mr Macron’s visit, Mr Gurría said it was vital that regulations be adapted to new forms of entrepreneurship and to new technologies if France were to remain at the productivity frontier.

The OECD note stresses the importance of continuing to improve competitiveness and entrepreneurship while reinforcing people’s skills and protecting the most vulnerable.

Mr Gurría added that sustained efforts were required to curb public spending so as to reduce the burden on jobs, investment and growth.

The OECD also underlines the need for the French labour market to evolve. The reforms of social dialogue rules and willingness to simplify the labour code are welcome, it says. Measures to reduce the duality of the labour market and facilitate employment in SMEs and start-up will also be important.

Ongoing work to focus social expenditure more closely on the most vulnerable should be extended and support to jobseekers strengthened.

Labour market reforms should be complemented by ambitious reforms in education and training. OECD reports have revealed that although the education system is sound, too many young people and adults in France have very weak numeracy and literacy skills. The French system is also not effective at reducing socio-economic inequalities.

The note also mentions the need for effective implementation of the territorial reforms launched in 2014 and encourages the development of further related initiatives to improve efficiency at the different levels of governance.

Source: Organisation for Economic Co-operation and Development