OECD Economic Surveys: France - Volume 2003 Issue 11 (OECD Economic Surveys)

This 2003 edition of OECD's periodic economic reviews of France includes special features on public expenditure management and policies to raise potential output. Table of contents......Page 5 Basic statistics of France......Page 8 Assessment and recommendations......Page 10 Growth has been slow in 2002 and early 2003......Page 24 Figure 1. Recent economic trends......Page 25 Table 1. Quarterly gross domestic product......Page 26 Figure 2. Reduced supply-side tensions......Page 27 Inflation and labour market tensions have eased......Page 28 Figure 3. Business sector indicators......Page 29 Figure 4. Price developments......Page 30 Figure 5. Wages, labour costs and competitiveness......Page 32 Figure 6. Employment and unemployment......Page 33 Macroeconomic policy was relaxed......Page 34 Figure 8. Monetary conditions......Page 35 Table 2. General government accounts......Page 37 Box 1. Recent measures affecting taxes......Page 39 The short-term outlook......Page 38 Fiscal policy in 2003 and 2004......Page 40 The challenge of ageing to long-term fiscal sustainability......Page 41 Figure 9. Long-term debt dynamics......Page 42 Box 2. The government’s proposed pension reform......Page 44 Improving potential output could improve prospects......Page 43 Figure 10. Employment rates......Page 45 Substantial spending cuts are required......Page 46 Table 3. Fiscal sustainability and structural reform......Page 47 Table 4. Impact of spending reform on fiscal sustainability......Page 49 Action is required soon......Page 48 Low youth employment following 30 years of decline......Page 52 Figure 11. Trends in youth employment......Page 54 Table 5. Employment programmes for youth under 26 years of age......Page 55 Box 3. Evaluating the employment impact of the 35 hours legislation......Page 60 Figure 12. Minimum wages......Page 63 Figure 13. SMIC, take-home pay, labour and employment......Page 64 Figure 14. Harmonising minimum wages and low-wage worker social security reductions......Page 66 Table 6. Expected change in labour costs for minimum-wage workers......Page 67 Making work pay for older workers......Page 69 Figure 15. Older worker employment rates......Page 70 Table 7. Early-retirement schemes and older-worker employment......Page 71 Figure 16. Financial incentives of retirement schemes......Page 72 Policies to promote Research and Development and innovation......Page 75 Box 4. Proposed measures to support the creation, financing and efficiency of small and medium enterprises......Page 76 Tax policy and the attractiveness of “site France”......Page 80 Table 8. Legal corporate income tax rates......Page 82 Table 9. Inflation of name brand versus in-house products......Page 84 Corporate governance and regulation......Page 85 Progress in reducing the role of the state in the business sector......Page 87 Box 5. The State as entrepreneur......Page 88 Some aspects of sustainable development......Page 91 Box 6. Policy integration across sustainable development areas......Page 92 Climate change......Page 93 Table 10. Main indicators: climate change......Page 94 Table 11. Greenhouse gas emissions and sectoral indicators......Page 95 Table 12. Long run marginal costs of power generation......Page 98 Reducing water pollution......Page 99 Figure 17. Water quality of rivers and streams......Page 101 Figure 18. Nitrates in underground aquifers......Page 102 Figure 19. Financial costs of water pollution......Page 103 Summary......Page 104 Table 13. Overview of progress in structural reform......Page 105 Spending in international comparison......Page 112 Figure 20. Public expenditure......Page 113 Table 14. Major current government outlays......Page 115 Figure 21. General government primary expenditure by economic category......Page 117 The challenges ahead......Page 114 Budgetary processes and arrangements across levels of government......Page 118 Table 15. Organisation of the public sector in France......Page 119 Box 7. Fiscal relations between levels of government......Page 120 Figure 22. Expenditure shares by level of government......Page 121 The State budget......Page 122 Table 16. Preparation of the State budget......Page 123 Sub-national governments......Page 125 Social protection......Page 126 Box 8. The social security system......Page 127 Box 9. Special social security financing funds......Page 130 Improving the authorities’ control over expenditure......Page 131 Table 17. Fiscal consolidation in the OECD......Page 132 Figure 23. Slippage in multiyear targets......Page 134 Figure 24. Asymmetric response of expenditures to the economic cycle......Page 135 Box 10. Incomes of the elderly......Page 139 Table 18. Performance indicators: sustainable retirement income......Page 141 Box 11. Main difference between public- and private-sector pension schemes......Page 143 Table 19. Official estimates of pension fund balances......Page 144 Managing fiscal consolidation in the social security system......Page 146 Figure 25. Range of activity of social security schemes......Page 149 Improving the oversight and efficiency of public expenditure......Page 148 Box 12. Decentralisation......Page 153 Summing up......Page 155 Box 13. Summary of recommendations......Page 156 Glossary of acronyms......Page 159 Notes......Page 161 Bibliography......Page 167 Annex I. Long-term fiscal simulations......Page 172 Annex II. Chronologie of main economic events......Page 174