Macron Targets French Red Tape as Economic Challenges Grow

(Bloomberg) -- Emmanuel Macron aims to slash layers of bureaucracy that are holding back French businesses as his presidency faces growing economic headwinds.

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Finance Minister Bruno Le Maire will present a bill of measures to cabinet targeting thickets of administrative obligations the government says are a key reason for the economy’s long-term under-performance.

“Too many norms kill growth, discourage entrepreneurs, and run a risk of a relegation of the European economy,” Le Maire said on Wednesday. “Catching up the productivity gap behind the US is one of the most important economic challenges of the coming decades.”

Around 400,000 norms weigh on companies in France after a sharp increase in the last 20 years, with entrepreneurs spending as much as eight hours a week on administrative tasks and the excessive burden costing around €84 billion ($89.8 billion) a year, or 3% of economic output, according to the government.

The so-called economic simplification bill that will head to parliament in June seeks to rekindle Macron’s pro-business reform drive as growth wilts and his centrist political alliance trails behind Marine Le Pen’s National Rally party in polls of voting intentions ahead of European elections.

The French economy barely grew in the second half of last year as inflation battered households and high interest rates weighed on investment, and unemployment has begun to rise.

Those economic challenges have undermined Macron’s efforts to repair public finances after the pandemic, and the country faces the risk of sovereign downgrades at ratings reviews in the coming weeks. Moody’s and Fitch Ratings are both scheduled to update their assessments on Friday.

Le Maire, who has said overbearing bureaucracy is fueling populism across Europe, also pledged legislation every year to continue ridding entrepreneurs of norms and rules that are deemed useless by the business community.

The measures to be presented on Wednesday are based on around 5,500 proposals from a public consultation at the start of the year.

“This simplification plan should open a new era in relations between the state and business leaders,” Le Maire told reporters at the Finance Ministry. “It’s a starting point, not the finish line.”

(Updates with finance minister comments starting in third paragraph.)

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