New French Government Pushing for Market Reforms to Create Economic Flexibility
Overtime, France has developed one of the strictest labor markets in the world. In other words, companies must meet a host of regulations set by the government itself. This has often been described as the biggest drag on the country's economy that has seen some negative performance in the past. International companies and investors alike have critiqued France on their strict labor market, citing this as the reason for poor economic performance at times. France's government is heading these challenges as they move forward with several changes to provide increased leniency and freedom within the economy.
In an interview with CNBC, former governor of the French National Bank, Christian Noyer, said that he expects France's economy to become one of the most flexible market in Europe besides the United Kingdom. This is a powerful statement as the current regulations and laws put France at one of the most constricted markets in Europe. That projected time change would an impressive turn around for the country. France's new president, Emmanuel Macron announced plans to decentralize what is known as 'collective bargaining'. He intends to place this responsibility and decision into the hands of individual companies rather than maintaining it at the national level. He hopes this will alleviate some of the barriers keeping French companies from profiting in the future.
Echoing the President's sentiments, Premier Edouard Philippe planned to have negotiations with trade unions throughout the country in order to break ground on the planned reform bill for the labor market. The labor unions themselves may pose the biggest obstacles to the economic and labor market changes that France's new government wishes to create. After all, the unions have a responsibility to protect the workers' righters. Union leaders are encouraging the government not to rush the negotiations in order to ensure a smooth transition and complete discussion.
However, the French government intends on making changes as quickly as possible in order to boost their economy. France has their eyes set on generating business with London and the UK at large because of their large economies and proximity. In fact, HSBC bank has already pledged to send 1,000 workers from London to Paris at the start of these market changes. While the future is still unknown, it seems the French government is moving towards a more flexible economy in an attempt to become a global actor in the world market.
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