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17 January 2008

EZA 827 Report:




France Politics

French politics – promise of a turning point on the labour market


After several confusing stabs at economic reform, the agreement on labour market reforms reached on 11Jan between employers association and trade unions might be a turning point.
This arrangement is to instil some flexibility in hiring and firing rules and a new emphasis on professional training.
More important, however, is the fact that the government took a backseat in the agreement, which is a fundamental change in hitherto tight state control.
In this respect the agreement also deviates from previous government practice such as the TEPA law (EZA797), and other fiscal measures to secure a balance between demand side and supply side policies.


Asset conclusions: labour market reform may be a positive turning point for stocks and the euro after disappointing (and superficial) business and fiscal reforms so far.



© EZA

Documents associated with this article

EZA827.pdf


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