France to reform or fall behind rest of Europe, says IMF

On the 4 June 2013 the International Monetary Fund (IMF) urged France to lower its labour costs and halt tax hikes to boost both growth and its competitiveness. Unless the country introduces economic reforms the gap between France and its European neighbours would widen, the IMF reported.

`We see deep structural issues affecting growth potential in France due to loss of competitiveness,' said Edward Gardner, the chief of the IMF's mission to France.

The previous week, the European Commission had given France two more years to bring its budget deficit from 3.7 percent of gross domestic product at the end of 2012 to 3 percent, the EU threshold.

The Spiegel International reported on the 5 June 2013 that as the economy and European influence of France is weakening, the country needs drastic overhaul.

• Primary Source

IMF, 03.06.13: France: 2013 Article IV Consultation—Concluding Statement http://www.imf.org/external/np/ms/2013/060413b.htm

ESO: Background Information: France must cut spending and reform pensions, says EU http://www.europeansources.info/record/france-must-cut-spending-and-reform-pensions-says-eu/

BBC, 04.06.13: IMF urges France to introduce fresh economic reforms http://www.bbc.co.uk/news/business-22771881

ESO: Background Information: Brussels gives seven states more time to fix budgets http://www.europeansources.info/record/brussels-gives-seven-states-more-time-to-fix-budgets/

Spiegel Online International, 05.06.13: Bonjour Tristesse: The Economic and Political Decline of France http://www.spiegel.de/international/europe/economic-decline-in-france-the-failed-leadership-of-hollande-a-903732.html

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