World Economy

French Consumer Confidence at 10-Year High

France’s economy is being hamstrung by red tape and complex labor laws.
France’s economy is being hamstrung by red tape and complex labor laws.

French consumer confidence last month hit its highest level since August 2007, statistics showed Tuesday, as more people had a positive outlook about their future earnings as the country elected a youthful president with a reformist agenda.

Coming in at 102 points, the consumer confidence index broke its long-term average of 100 points for the first time since the global economic crisis struck in the second half of 2007, the French national statistics agency Insee said, AFP reported.

The Insee survey questioned consumers about their perceptions of their personal finances and the general economy. French consumers’ confidence about their personal outlook jumped by four points to reach its long-term average for the first time since September 2007.

 While the figure for those who judge it a good time to make big purchases dropped by seven points, it still remained above its long-term average, said Insee. The survey also found a boost of optimism about the outlook for the economy as a whole, with a jump of five points to a level unseen since August 2007. Insee noted a boost of optimism in this indicator has been observed during previous presidential elections.

 Emmanuel Macron swept a runoff election in May to become France’s youngest president at the age of 39, leading a new centrist political party that aims to overcome the left-right political divide seen as having hobbled the country’s efforts to reform and modernize.

 Concerns about unemployment, which rose to record levels under Macron’s predecessor Francois Hollande, were at their lowest level since June 2008.

 The consumer confidence index is an important indicator of future spending by consumers, one of the most important drivers of economic growth.

 Labor Law

French Prime Minister Edouard Philippe on Tuesday set down the timetable for the program to change France’s labor laws, one of President Emmanuel Macron’s key election pledges.

Philippe was put in charge of a caretaker government after Macron took office on May 14, ahead of legislative elections on June 11 and 18.

Speaking on France 2 television, Philippe said the post-election parliament would be presented in July with a bill empowering the government to approve labor reform by executive order. The proposed clauses in the reform will be published “by the end of the summer,” he said, promising that the text “will include the fruit of our discussions” with unions and employers.

Macron, a centrist former banker, says France’s economy is being hamstrung by red tape and complex labor laws.

On the campaign trail, he pledged to overhaul regulations and reduce the weight of the French state to free up business activity. Under his plan, bosses would be allowed to negotiate working conditions directly with their employees rather than being required to honor industry-wide agreements. There would also be a ceiling for compensation determined by labor tribunals for unfair dismissal.




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