OECD sees French reforms boosting GDP growth 0.3 percent points per year
PARIS (Reuters) - The OECD prodded France on Friday to step up the pace of its reforms, though it estimated that those already in the pipeline would gradually deliver tangible economic growth gains.
Various proposed reforms could boost the country's average growth by 0.3 percentage points annually over five years, the Organisation for Economic Cooperation and Development said.
The OECD's approval of President Francois Hollande's reforms, particularly a planned cut in payroll tax, will be welcomed by the unpopular government as it battles to rein in its finances in the face of anaemic growth.
Over 10 years, the reforms' boost to economic growth could reach 0.4 percentage points, the research body said in a report just before Hollande was due to visit its Paris headquarters.
Such gains would be a far from negligible boost for the euro zone's second-biggest economy, which the OECD estimates will grow only 0.4 percent this year and 1.0 percent next year.
However, the OECD said the growth boost depended on quick implementation of the proposed reforms, which include phasing out 30 billion euros (23.88 billion British pounds) in payroll tax on companies.
The OECD said it was also crucial to go ahead with plans to introduce competition into professions currently enjoying monopoly-like status, which have already triggered protests from notaries and pharmacists.
The government unveiled a draft of the reforms this week in which it flagged plans to let more stores open on Sundays, allow more competition in the legal professions and in pharmacies and loosen rules around inter-city bus transport.
With the government battling to get unemployment down from 10 percent, the OECD said France should go further and faster than recent labour market reforms allowing some flexibility.
The organisation also urged the government to remove regulatory barriers to competition in the gas and electricity distribution networks, which the Socialist government so far has shown little interest in doing.
(1 US dollar = 0.7801 euro)
(Reporting by Leigh Thomas; Editing by Brian Love and Robin Pomeroy)
