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Business

OECD calls for French fiscal restraint

The OECD has hailed an initial French market reform package as being vital for the country's growth prospects. But it added current measures were not enough to effectively cut state spending and reduce joblessness.

In its latest report on the French economy, the Organization for Economic Cooperation and Development (OECD) said Thursday France was in the process of implementing some crucial measures to raise the competitiveness of its industries and make the labor market more efficient.

"The government has

undertaken a series of welcome pro-growth structural reforms

and has more in the pipeline," the organization said.

The report specifically mentioned that Economy Minister Emmanuel Macron had set out a series of steps to open sectors of the economy and soften rules related to opening hours of businesses.

Joblessness still a massive issue

But the OECD warned current restructuring efforts were not yet sufficient. It called for better vocational training and adult qualification programs as the second-largest eurozone nation still struggled to bring down unemployment hovering around 10 percent.

At the same time, the organization called for more fiscal restraint. "Public spending, at 57 percent of gross domestic product, is among the highest in the OECD and imposes a heavy burden on economic performance," the report said.

The OECD said it expected the French economy to expand by 1.1 percent this year, up from an earlier estimate of 0.8 percent. In 2016, it projected France would see its GDP grow by 1.7 percent, with joblessness remaining at current levels.

hg/nz (Reuters, Reuters, dpa)

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