OECD Economic Surveys: France - Volume 2003 Issue 11 (OECD by OECD. Published by : OECD Publishing

By OECD. Published by : OECD Publishing

This 2003 variation of OECD's periodic monetary studies of France comprises unique good points on public expenditure administration and regulations to elevate strength output.

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

Example text

How to co-ordinate such reductions represents a real challenge given the decentralised nature of public expenditure in France; reforms to improve the authorities’ capabilities in this regard are discussed in Chapter III. The extent of fiscal consolidation that will be required is illustrated in Table 4. To be prudent, the first set of results builds in only half of the structural gains modelled in Table 4. The second set of results shows the expected impacts of a 2 per cent of GDP reduction in the pension financing requirement by 2020.

Generally, these programmes have been criticised for yielding limited improvements in the employability of participants. In this context, the Cour des Comptes was especially critical of so-called consolidated employment contracts (Contrats d’emploi consolidé, CEC), which “appear to be attributed in an effort to lower the rate of unemployment”. 6 per cent of participants found work with a permanent contract. On the other hand employers – principally local governments, hospitals and schools – are satisfied given the heavy subsidisation of these jobs (8 500 euros per head or 44 per cent of the labour cost of a worker paid at the SMIC).

6 68 76 93 117 133 C. 6 67 66 66 66 66 D. 5 64 55 50 50 52 Note: Productivity growth is output per hours worked; employment rate is portion of workforce aged 15-64 employed; ageing costs are the increase in pension and health care costs and deficits and debt are expressed as a per cent of nominal GDP. Source: OECD. The preceding simulations give a notion of the extent of additional savings that will be required. The rationale for reducing spending and finding margins for efficiency is not to meet some arbitrary goal, but rather to ensure that future © OECD 2003 Overview of economic developments and challenges 49 generations will be able to enjoy improved levels of services and living standards at economically sustainable levels of taxation.

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