France capable of more than \\\'1pc growth in 2014\\\'

FE Team | Published: January 19, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

PARIS, Jan 18 (AFP): Finance Minister Pierre Moscovici said on Friday that the French economy could grow by more than 1.0 per cent this year, higher than the 0.9 per cent forecast until now, if new government reforms lead to a return in confidence.
"Yes, we can do more than one per cent in 2014. That's our desire," Moscovici told the daily Le Monde.
He said "there is a fundamental psychological element of the economy, if all participants ... can mobilise themselves, confidence can return and investment will accelerate."
France has been looking to ride the general global recovery, with growth picking up after a near stagnant 2013.
However, French President Francois Hollande announced this week the intention to jump-start the economy with 30 billion euros ($41.0 billion) in cuts to payroll taxes and further efforts to balance public finances with 50 billion euros in spending cuts over three years.
With exports set to benefit from the global recovery and consumer spending holding up, Moscovici said the measures were aimed at boosting business investment, which has been the weak element in the economy.
Surveys have shown business confidence to be downbeat in France, and the government has acknowledged recently that it could go no further with its initial policy of raising taxes. Company bankruptcies are also running at a high level, and experts say that profit margins are at exceptionally low levels.
Hollande's "responsibility pact" would offer 30 billion euros in cuts on charges businesses pay for social benefits for their employees over three years in exchange for hiring more employees, although it is unclear how this would work in practice.
It follows a 20-billion-euro tax credit to labour-intensive firms.
"A France which does not invest risks being left behind," said Moscovici.
The minister said the pact did not represent a change in course, as many analysts have suggested.
"We've had a reformist policy from the start, we need to enter a new stage now," said Moscovici.
Hollande's government has announced a number of measures in recent months, including looking at making a fundamental reform of the tax system, a review of the generous unemployment benefits, a drive to simplify regulations and a new body looking at the effectiveness of state spending.