France urged to step up reforms

France must step up efforts to reform its labour and tax systems to spur economic growth and create jobs, the European Commission said.

“In some policy areas reforms are progressing, but there remains uncertainty on their expected outcomes and their effectiveness,” the commission, the European Union executive, said in a 34-page report released yesterday in Brussels.

“Therefore, continued decisive implementation and, where appropriate, adaptation remain necessary, but also further reform efforts are needed.”

The report comes a day after French prime minister Manuel Valls announced a series of measures aimed at boosting growth in the euro area’s second-largest economy, including easing firing rules and allowing Sunday openings for shops.

The drive to change economic norms comes against a backdrop of anaemic growth over the last three years, record joblessness and a budget deficit that is rising for the first time in five years.

The EU says France is still lagging behind on improving its public finances.

The Finance Ministry in Paris said the budget deficit will decrease to 2.7% of gross domestic product in 2017 from 4.1% of GDP this year.

The Brussels-based commission urged France to cut its minimum wage to boost employment, criticising the government for the “limited progress” it has made “to reduce rigidities in the labour market,” according to yesterday’s report.

“A more ambitious approach seems warranted,” it said. The commission’s economic growth forecast for France stands at 0.7% for this year and 1.5% for 2016.