French Prime Minister Jean-Marc Ayrault travels to Canada looking for investors France is pursuing a series of ambitious reforms to fix its economic woes and strengthen the struggling European Union, French Prime Minister Jean-Marc Ayrault told a Bay St. crowd on Thursday. Europe’s second-biggest economy has been teetering in and out of recession after the global collapse in 2008. To the dismay of the EU, the debt-laden French government announced last month it would not meet its promised plan to reduce the deficit by 3 per cent and instead set a 2 per cent target for 2013. Ayrault, who was appointed by President François Hollande in 2012 to lead the government, put a positive spin on France’s strategy to modernize antiquated labour and public policies while at the same time trimming €60 billion from the budget by 2017. “France has undertaken a vast set of reforms to get back on the path to growth through a restructured pact between heads of companies, employees and public authorities,” Ayrault said at the Empire Club on his first official visit to Canada. The French also want the super rich to pay more taxes, a move that caused actor Gerard Depardieu to move to Russia after Hollande unveiled a plan to increase the top rate of income tax in France to 75 per cent for those who earn €1 million or more. France’s economic issues could threaten the stability of the euro if it does not pull out of its slump. Change has not been easy. The French unions supported Hollande’s election and it is those same unions that now must agree to change in order to make the economy more competitive. Labour reforms, including making it easier to hire and fire workers, are supported by three of five of the biggest French unions. The amendments are set to go to Parliament this month. A ray of light came last week from the Bank of France, after it announced the country has narrowly avoided slipping into another recession. Economic growth is expected to be 0.1 per cent in the first quarter. “Our primary asset is that we belong to the European Union,” Ayrault noted. Ayrault conceded he knows North Americans perceive the European efforts to fix the EU have often been seen as “too slow, too hesitant.” “As you know, one of the challenges facing all Europe is the management of deficits. It is for this reason that my government is implementing a strategy for a rapid return to a balanced budget,” said Ayrault. Last May, French voters turfed former president Nicholas Sarkozy in favour of Hollande’s anti-austerity agenda, but once Hollande took office he had no choice but to institute reforms. The €2-trillion French economy contracted in the last three months of 2012, government debt is nearly 90 per cent of GDP and unemployment hovers at 10 per cent. Among young people, unemployment is nearly 25 per cent. A key part of the French strategy is contained in 35 concrete measures, one being reducing taxes on companies by an annual value of up to €20 billion to support the creation of new jobs. Ayrault added he “fully supports” a Canada and EU free trade deal, currently being negotiated. “You understand my presence among you is part of a long tradition of friendship that I wanted to honour. Above all, I hoped to show you that France is a country on the move, open to the world.” Source: http://www.thestar.com/news/world/2013/03/14/french_prime_minister_jeanmarc_ayrault_talks_up_economy_european_union.html
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