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France likely to reject shock therapy

Monday, November 05, 2012 - 01:08

Nov.05 - Former aerospace boss, Louis Gallois' proposals for the economy, which include raising VAT, and hacking 30 billion off payroll contributions, have been pre-empted by President Hollande. Joanne Nicholson reports

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Louis Gallois' report on competitiveness wasn't comfortable reading for the French government. The industrialist wants "shock therapy" to get the economy back on track. (SOUNDBITE) (French) HEAD OF REPORT LOUIS GALLOIS, SAYING: "I suggest 22 main measures to stop this decline, stop this stall, support investment. I call this a competitiveness shock - a confidence shock." The former boss of aerospace group EADS suggests slicing 20 billion euros off employers' social contributions and 10 billion off those paid by workers. In return - he says - taxes must be raised. (SOUNDBITE) (French) HEAD OF REPORT LOUIS GALLOIS, SAYING: "I think that we need true mobilisation - and I'm not afraid to say - true patriotism, we need for the "Club France" to work collectively, we need for the "Club France" to engage in this recovery." France is struggling with rampant unemployment and an austerity budget. Industry leaders say shouldering some of the world's highest labour charges puts them at a disadvantage. But after the proposals were leaked, President, Francois Hollande ruled out shifting the tax burden from employers to households.

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France likely to reject shock therapy

Monday, November 05, 2012 - 01:08

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