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French Want Action on Economy

French Want Action on EconomyFrench Want Action on Economy

Corsican nationalists have won a historic and unexpected victory in France’s regional elections, gaining two seats short of an outright majority on the island.

The Pe a Corsica (For Corsica) list won more than 35% of the votes in the second round of polls on Sunday, giving it 24 of the 51 seats in the local authority council, Yahoo reported.

Nationalists, who joined forces with those seeking independence from French control for the runoff vote, are now the Mediterranean island’s main political force.

The National Front has grown more popular. That owes something to growing concerns over refugees and security in the wake of the Paris attacks. But it mainly reflects widespread dissatisfaction with the government’s failure to bring the economy out of its doldrums. And to this, France’s rulers–as well as its main republican opposition–must pay attention.

Unemployment in France stands at more than 10% (compared with 6.3% in Germany), and nearly a quarter of French youth are unemployed. This year, the French economy is expected to grow only 1.1%, Bloomberg reported.

The solution to this stagnation is a matter of common sense and great urgency, yet until now, politicians have only tinkered at the edges of labor-market policies. What’s needed is wholesale reform of the country’s Napoleon-era employment code, which imposes excessive burdens on employers and discourages job creation.

Non-wage labor costs are too high; employers are responsible for a burdensome range of benefits. And firing workers is prohibitively expensive, making it hard for employers to adapt to changing market conditions. A series of French governments have indicated a willingness to make changes–indeed, the current Socialist government has made a more earnest effort than the center-right one did under Nicolas Sarkozy–but their actions have been modest.  

France’s leaders must now make a choice. The path of least resistance would be to ignore the lessons of this election, or even to take a page from Le Pen’s populist playbook. The better response would be to enact the kind of changes that can create economic opportunity for French citizens.

 Retail Sales Drop

French retail sales fell the most in eight months in November with department stores taking the hardest hit after the Islamist State-claimed attacks in Paris, a survey from the Bank of France said, Reuters reported.

The French central bank’s monthly retail index fell 1.1% in November from October to the lowest point since March after the shootings and suicide bombings that left 130 people dead in the second high-profile attack this year in France.

With security a major concern on shoppers’ minds following the attacks, department stores, which include famed institutions like the Galeries Lafayette, saw their sales fall 4.3%.

Meanwhile, online retailers saw theirs surge 3.2% heading into the crunch holiday season.

 

Financialtribune.com