:1009080706050403020100Economic policy of

France

Gocha Sharvashidze

Guram Arsenashvili

Gogita Gelashvili

Key Topics

General figures about France economic General overview

Economic policy of France

Labor Market Policy Tax Policy

Budgetary policy

Fiscal policy of France

General Figures Current situation if France

C.Trade Balance (EUR) Data

C. GDP per capita (EUR) Data 2010 2011 2012 2013 2014

62.2

62.4

62.6

62.8

63

63.2

63.4

63.6

63.8

64

62.8

63.1

63.4

63.7

63.9

2010   2011   2012   2013   2014  1,900

1,950

2,000

2,050

2,100

2,150

1,997

2,058

2,086

2,1182,134

2010   2011   2012   2013   2014 31000

31500

32000

32500

33000

33500

31,819

32,632

32,921

33,27333,380

2010 2011 2012 2013 20140

0.5

1

1.5

2

2.5

1.7

2.32.2

1

0.62010 2011 2012 2013 2014

1.92.1

0.3

-0.5

-1.2

2010 2011 2012 2013 2014

53.5

-76.6-70.6

-62.3-53.5

A. Population of France

B. GDP (EUR bn) Data

A. Inflation Data

B. Investment Data

• A chaotic, stop-and-go approach

General Overview

• Deficits, debt and unemployment rates have failed to meet targets

• Taxes and other social contributions are high, but do not cover state expenses.

 Economic Policy

• France faces a bleak economic outlook. • public debt is growing and is 95% of GDP

France recorded a Government Budget deficit equal to 4 percent of the country's Gross Domestic Product in 2014

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How successful has economic policy been in providing a reliable economic framework and in fostering international competitiveness?Economic policy fully succeeds in providing a coherent set-up of different institutional spheres and regimes, thus stabilizing the economic environment. It largely contributes to the objectives of fostering a country’s competitive capabilities and attractiveness as an economic location.Economic policy largely provides a reliable economic environment and supports the objectives of fostering a country’s competitive capabilities and attractiveness as an economic location

Economic policy somewhat contributes to providing a reliable economic environment and helps to a certain degree in fostering a country’s competitive capabilities and attractiveness as an economic locationEconomic policy mainly acts in discretionary ways essentially destabilizing the economic environment. There is little coordination in the set-up of economic policy institutions. Economic policy generally fails in fostering a country’s competitive capabilities and attractiveness as an economic location.

FISCAL POLICY

improve unemployment rates;

control inflation;

stabilize business cycles;

influence interest rates in an effort to control the economy.

Through fiscal policy,

President Hollande was elected on a campaign to eliminate the budget deficit through higher taxes on the wealthy, while maintaining government spending.

The French economy still experiencing weak growth rates

In most English-speaking countries (e.g. UK, USA, Canada) income tax and social taxes are calculated on an individual basis. In France, they are calculated on a family basis.

Tax rates in France are different and generally higher than most other countries.

There are a number of tax loopholes and exemptions specific to France.

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3

VAT (or sales tax) Property tax and habitation tax; Income tax Capital gains tax Social taxes (CSG, CDRS)

France has various taxes, such as:

Inheritance tax Gift tax Wealth tax Corporate and Business taxes Assorted other taxes

Tax Residency

Taxes and social contributions amount to 48% of GDP, one of the highest levels in the OECD

Tax Policy

Nonetheless, tax revenues do not cover costs, as public spending is high 57% of GDP

TAX POLICY

• The government increased value-added tax, increased income taxes, introduced additional levies on companies’ profits and adopted a “super tax” on the wealthiest individuals

Socialist President Francois Hollandedid as he promised and slapped a 75% tax rate on millionaires

• Youth unemployment • France Unemployment Rate

• controversial labor market reforms

Project is supposed to introduce more flexibility in the job market in exchange for better health services and training for workers made redundant

Labor Market Policy

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Successful strategies ensure unemployment is not a serious threat.

Labor market policies have been more or less successful.

Strategies against unemployment have shown little or no significant success.

Labor market policies have been unsuccessful and rather effected a rise in unemployment

How effectively does labor market policy address unemployment?

ALLPPT.com _ Free PowerPoint Templates, Diagrams and Charts

BUDGETARY POLICY The Hollande government’s major

mistake connected to budget.

The 2015 budget foresees expenditure cuts but fails to respect the 3% deficit limit set up by European rules

What about chances?

To what extent does budgetary policy realize the goal of fiscal sustainability?

 Budgetary policy is fiscally sustainable.

Budgetary policy achieves most standards of fiscal sustainability.

Budgetary policy achieves some standards of fiscal sustainability.

Budgetary policy is fiscally unsustainabl

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