IMF Warns France About Lowering Labor Costs

France must lower labor costs, open up regulated professions, deepen its labor and business reforms and cease tax hikes to get back to growth and bolster competitiveness, the IMF said on Tuesday.

A day after slashing its growth forecast for Germany, the International Monetary Fund said that France was set to contract slightly more than its current forecast and that unemployment would keep rising in spite of the government’s promise to reverse the jobless trend by year-end.

“The number of reforms initiated in the last six months speak well of the government’s understanding that France needs to be reformed,” the IMF’s Mission Chief for France, Edward Gardner, said, adding: “It’s a first step in a long process.”

The Fund urged France to remove constraints on housing construction and push for more negotiations at enterprise level. It also suggested giving the competition authority more power to review all sectors of the economy and push to remove regulatory obstacles.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza