The Economic reforms undertaken by French President Nicolas Sarkozy are expected to create sweeping changes in the French Economy. The reforms, as the president points out, have been undertaken to put France on the fast growth track. The French economy, of late had been plagued by numerous problems. A slow growth rate, huge unemployment, lack of incentives to investors coupled with power yielding labor unions had all attributed to a stagnant French economy.
The current reforms have undertaken create a dynamic laissez-faire economy while still attaching importance to the public sector. The focus is to augment productivity, increase purchasing power and savings and attracting investments from domestic and international investors.
Some of the key aspects of the reforms are:
Loosening the 35 hour work-week. This is a major policy change and has been opposed strongly by labor unions in France.
However a standard 35 hour work-week was not being conductive to productivity and a big turn off for investors.
Tax cuts for investors. Certain tax cuts would act as incentives to investment.
Reduction in number of public employees/civil servants. Only 2 out of 3 civil servants who retire will be replaced. The number of civil servants would be reduced by 22700 overall and 11200 only in the education sector.
The power of France's labor unions will be curbed.
The economic reforms of France would also do away with standardized pay scales and introduce performance reviews and merit-based pay.
