France: Business environment at a glance

(EIU Viewswire Via Thomson Dialog NewsEdge) COUNTRY VIEW

FROM THE ECONOMIST INTELLIGENCE UNIT

Policy towards private enterprise and competition

2006-07: Pace of privatisation programmes slows as the scope for further sell-offs of state assets diminishes.

2008-10: Opening of gas and electricity markets to full competition. State aid and barriers to foreign takeovers of domestic companies cause friction with the EU.

Policy towards foreign investment

2006-07: Favourable official attitude towards foreign direct investment qualified by support for "national champions" and persistent obstacles to foreign takeovers of domestic companies.

2008-10: Possible erosion of barriers against foreign takeovers, as a result of commercial pressures and EU law.

Foreign trade and exchange controls

2006-07: Resistance to further reforms of the EU's common agricultural policy.

2008-10: Qualified support for multilateral trade liberalisation, but opposition to full liberalisation of trade in agriculture and cultural programmes.

Taxes

2006-07: Weak public finances force pause in programme of income tax cuts. Resumption of income tax cuts in 2007.

2008-10: Possible reform of wealth tax and of tax treatment of foreign managerial personnel working in France.

Financing

2006-07: Possible involvement of Euronext (of which the Paris bourse is a member) in cross-border consolidation of stock exchanges.

2008-10: Growing competition between financial firms to provide capitalised pension funds (plan d'epargne retraite populairePERP).

The labour market

2006-07: Shelving of any further attempts at labour market following widespread opposition to introduction of a new working contract for young workers.

2008-10: Attempts to raise the rate of participation in the labour force. Continued skills shortages despite persistently high unemployment.

Infrastructure

2006-07: Extension of high-speed rail link (TGV) to Strasbourg.

2008-10: The national railway, SNCF, remains in state hands.

Copyright 2006 Economist Intelligence Unit