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02 April 2013

Simplification "shock" in France

Regulation in the spotlight in France, as factor in economic woes. "France has avoided the most severe impacts of the global economic crisis and turmoil in the euro area, but must now take action to boost competitiveness and create jobs, according to the OECD's latest Economic Survey of France." The Survey, presented in Paris by OECD Secretary-General Angel GurrĂ­a to French Minister of Economy and Finance Pierre Moscovici, urges France to attack the pervasive bottlenecks that have limited economic growth and maintained high unemployment over the past decades. "The French economy has tremendous assets and considerable potential, but excessive regulation and high levels of taxation are gradually eroding its competitiveness," Mr Gurria said. See OECD media release, and (posted 28 March) the French ministry of finance website, with the minister's statement.
Mr Gurria's message seems to have been heard: In his television interview on the public channel France 2 on 28 March, President Hollande announced the drastic reduction of the number of administrative procedures, particularly for small and medium-size enterprises, in what he termed a "simplification shock." "Currrently, a small company is obliged to respond yearly to some 3000 requests for information from the administration, yes, 3000!" said the president, who promised: "Tomorrow we will divide that figure by two or by three." This high-level announcement has been widely commented in the media, who also reported, quoting OECD, that the savings to business could reach €60 bn a year, or 3% of GDP.
Speaking on radio on 2 April (today), the minister in charge of public administration reform (Mme Lebranchu) said that this reform drive was different from its predecessors as it was based on the willing participation of the civil service, and not on reducing staff numbers. A site reserved to officials has already collected 1500 simplification ideas from within the administration.

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