Hollande sticks his neck out in a bid to revive France's ailing economy

French president François Hollande has laid out his bold plans to revitalise the economy.

France's president, Franois Hollande, launched a bid to revitalise his country's ailing economy this week. His responsibility pact' is supposed to encourage businesses to create jobs in return for a reduction in notoriously high labour costs. He promised businesses €30bn in payroll tax cuts by 2017.

Companies will no longer have to pay charges to fund family welfare programmes, which would reduce the average total wage bill by just over 5%. This comes on top of a previous €20bn tax break for firms.

He also reiterated his commitment to cut spending by €15bn this year, and by another €50bn over the next three years. "That's a lot, and it's never been done before," he pointed out. He also plans to lower corporation tax.

What the commentators said

Still, "the new philosophy aimed at trying to cut spending is welcome", said the FT. Shrinking the state will be crucial if France wants to avoid long-term bankruptcy. The good news is that Hollande has plenty of room for manoeuvre.

There are three years to go before he faces the voters again, while the opposition is in disarray. He must now "summon up the will needed to recast France's future".

Good luck with that, said Wiwo.de. Pushing through structural change in France will take nerves of steel. Little has been done since the 1990s, when the government attempted to tackle civil servants' pensions. A three-week strike put paid to that. If Hollande can live up to this week's rhetoric, he will deserve a place in the history books.

Recommended

Why there is still life in the energy bull market
Energy

Why there is still life in the energy bull market

A green power initiative on the Galapagos Islands demonstrates how the renewable energy transition will need to be supported by fossil fuels for some …
4 Nov 2022
Eurozone inflation hits 10.7% in October
EU Economy

Eurozone inflation hits 10.7% in October

Inflation across the eurozone hit 10.7% in October. What does it mean for your money?
1 Nov 2022
The end of cheap money hits the markets
Stockmarkets

The end of cheap money hits the markets

Markets have swooned as central banks raise interest rates, leaving the era of cheap money behind.
28 Sep 2022
Investors are still in denial about inflation and interest rates
Global Economy

Investors are still in denial about inflation and interest rates

There are worrying signs that inflation is becoming embedded in the economy, but many investors are struggling to adjust to the new reality.
23 Sep 2022

Most Popular

Is it cheaper to leave the heating on low all day?
Personal finance

Is it cheaper to leave the heating on low all day?

The weather is getting colder and energy bills are rising, but is it really cheaper to leave the heating on low all day or should you only turn it on …
1 Dec 2022
Radiator vs electric heater – which is cheaper?
Personal finance

Radiator vs electric heater – which is cheaper?

We compare the costs, pros and cons of radiators and electric heaters and see which one will help keep your energy bill as low as possible.
28 Nov 2022
The pros and cons of smart meters – should you switch?
Personal finance

The pros and cons of smart meters – should you switch?

A smart meter can help you keep tabs on your energy usage, but is it better than a regular meter? We take a look at smart meters vs regular meters.
2 Dec 2022