PARIS (Reuters) - France has taken gradual steps aimed at reforming its economy over the last decade, helping to underpin a recovery that is now taking root, even if opposition politicians say it is too little too late.
While financial markets might indicate the country is facing a perilous period of turbulence and uncertainty as the presidential election nears, the underlying economy is telling a different story. For main story click
The following is an overview of the main reforms France has carried out over the past decade.
The flagship reform of Francois Hollande’s presidency is a payroll tax credit scheme that aimed to reverse a steady decline in French companies’ international competitiveness.
With current presidential candidate Emmanuel Macron as his main economic advisor, Hollande introduced the measure in 2013, hoping it would hold down rising French labor costs.
Under the scheme - known as the Tax Credit for Competitiveness and Jobs, or CICE - companies can seek a tax credit of 6 percent of their wage bill. This covers only lower salaries worth up to two-and-a-half times the minimum wage.
Corporate profit margins have begun to recover under the scheme from a more than 30-year low and a government sponsored study found in September that 50,000-100,000 jobs had been created or saved in 2013-2014 as a result of the program.
Late in his five-year term, Hollande moved to tackle the rigidity of France’s labor code after having little success bringing down the unemployment rate from around 10 percent.
The revamp made it easier to hire and fire, something employers had long called for, while also allowing firms to more easily tailor pay and work terms to their needs.
The reform was only passed after Hollande’s government invoked rarely used constitutional powers to bypass parliament in the face of street protests and a rebellion by left-wingers in his own Socialist party.
As economy minister, Macron piloted the passage through parliament of legislation aimed at cutting red tape in a variety of areas and opening up “closed-shop” professions - where strict qualifications criteria apply - like public notaries, court clerks and driving teachers.
The legislation, which came to be called the “Macron Law”, also loosened rules on when stores could be opened and made it easier for private buses companies to operate, prompting a flurry of new low-cost routes to open up across the country.
The law, which also makes retail banking more competitive by making it easier for consumers to switch banks, has been praised by international institutions and ratings agencies as a step towards boosting flagging growth.
Hollande’s predecessor Nicolas Sarkozy raised the minimum retirement age by two years to 62 in 2010 despite street protests.
Though Hollande’s Socialists opposed the move at the time, once in office, he kept the measure, though he made it possible for people who started their careers at a very young age to retire earlier.
Reporting by Leigh Thomas; Editing by Pravin Char