This presentation is prepared for the subject of Economic policy. (Budapest Business School - Hungary)

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Economic policy of France
Gocha Sharvashidze
Guram Arsenashvili
Gogita Gelashvili

2. Key Topics
 General figures about France economic
 General overview
 Economic policy of France
 Labor Market Policy
 Tax Policy
 Budgetary policy
 Fiscal policy of France

3. General Figures
Current situation if France
C.Trade Balance
(EUR) Data
C. GDP per capita
(EUR) Data
62.8
63.1
63.4
63.7
63.9
62.2
62.4
62.6
62.8
63
63.2
63.4
63.6
63.8
64
2010 2011 2012 2013 2014
1,997
2,058
2,086
2,118
2,134
1,900
1,950
2,000
2,050
2,100
2,150
2010 2011 2012 2013 2014
31819
32,632
32,921
33,273
33,380
31000
31500
32000
32500
33000
33500
2010 2011 2012 2013 2014
1.7
2.3
2.2
1
0.6
0
0.5
1
1.5
2
2.5
2010 2011 2012 2013 2014
1.9
2.1
0.3
-0.5
-1.2
2010 2011 2012 2013 2014
53.5
-76.6
-70.6
-62.3
-53.5
2010 2011 2012 2013 2014
A. Population of
France
B. GDP (EUR bn)
Data
A. Inflation Data
B. Investment
Data

4. • A chaotic, stop-and-go approach
General Overview
• Deficits, debt and unemployment rates
have failed to meet targets
• Taxes and other social contributions are
high, but do not cover state expenses.

5. Economic Policy
• France faces a bleak economic outlook. • public debt is growing and is 95% of
GDP
France recorded a Government Budget deficit equal to 4 percent of the country's
Gross Domestic Product in 2014

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How successful has economic policy been in providing a reliable economic
framework and in fostering international competitiveness?
Economic policy fully succeeds in providing a coherent set-up of different
institutional spheres and regimes, thus stabilizing the economic environment. It
largely contributes to the objectives of fostering a country’s competitive
capabilities and attractiveness as an economic location.
Economic policy largely provides a reliable economic environment and supports
the objectives of fostering a country’s competitive capabilities and attractiveness
as an economic location
Economic policy somewhat contributes to providing a reliable economic
environment and helps to a certain degree in fostering a country’s competitive
capabilities and attractiveness as an economic location
Economic policy mainly acts in discretionary ways essentially destabilizing the
economic environment.There is little coordination in the set-up of economic policy
institutions. Economic policy generally fails in fostering a country’s competitive
capabilities and attractiveness as an economic location.

7. FISCAL POLICY
 improve unemployment rates;
 control inflation;
 stabilize business cycles;
 influence interest rates in an effort to control the economy.
Through fiscal policy,

8. President Hollande was elected on a campaign to
eliminate the budget deficit through higher taxes on
the wealthy, while maintaining government spending.
The French economy still experiencing weak growth rates

9. In most English-speaking countries (e.g. UK, USA, Canada)
income tax and social taxes are calculated on an individual
basis. In France, they are calculated on a family basis.
Tax rates in France are different and generally
higher than most other countries.
There are a number of tax loopholes and
exemptions specific to France.
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 VAT (or sales tax)
 Property tax and habitation tax;
 Income tax
 Capital gains tax
 Social taxes (CSG, CDRS)
France has various taxes, such as:
 Inheritance tax
 Gift tax
 Wealth tax
 Corporate and Business taxes
 Assorted other taxes
Tax Residency

10. Taxes and social contributions amount to 48% of
GDP, one of the highest levels in the OECD
Tax Policy
Nonetheless, tax revenues do not cover costs, as public
spending is high 57% of GDP

11. TAX POLICY
• The government increased value-added tax, increased income taxes, introduced
additional levies on companies’ profits and adopted a “super tax” on the
wealthiest individuals
Socialist President Francois Hollandedid as he promised and
slapped a 75% tax rate on millionaires

12. • Youth unemployment
• France Unemployment Rate
• controversial labor market reforms
Project is supposed to introduce more
flexibility in the job market in exchange for
better health services and training for workers
made redundant
Labor Market Policy

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Successful strategies ensure unemployment is not a serious threat.
Labor market policies have been more or less successful.
Strategies against unemployment have shown little or no significant
success.
Labor market policies have been unsuccessful and rather effected a rise
in unemployment
How effectively does labor market policy address
unemployment?

14. ALLPPT.com _ Free PowerPoint Templates, Diagrams and Charts
BUDGETARY POLICY
 The Hollande government’s major
mistake connected to budget.
 The 2015 budget foresees expenditure
cuts but fails to respect the 3% deficit
limit set up by European rules
 What about chances?

15. To what extent does budgetary policy realize
the goal of fiscal sustainability?
Budgetary policy is fiscally sustainable.
Budgetary policy achieves most standards of fiscal sustai
nability.
Budgetary policy achieves some standards of fiscal sustai
nability.
Budgetary policy is fiscally unsustainabl
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