The Organisation for Economic Cooperation and Development (OECD) published a survey on Thursday, urging market-based reforms for France to boost employment and economic growth, and to reduce overspending in its welfare system.

A comprehensive reform of the labor market and the government economic policy are needed in France, the report suggested.

Although a modest economic upturn seems to have appeared in France recently, low growth and, especially, high unemployment still characterize France's recent economic performance, the OECD said.

The French economy is suffering from a range of structural problems, the OECD's report said. Over the past two decades, its public debt as a percentage of GDP has been rising almost without a pause, and the shares of public expenditure in GDP remain among the highest in OECD countries. Control of expenditure has been particularly difficult for the French government in social and health insurance sectors, the report mentioned, and the tax and social security contribution systems are too complicated, thus creating high administrative costs and some distortions to the incentive system.

As a solution, the OECD suggested France continue efforts to control health and other expenditures, and try to calculate and collect people's personal income tax and other taxes in a simpler way.

The OECD report also mentions that though the French government has taken numerous initiatives to encourage growth and employment, many of them will at best have short-term effects, and it is necessary for the government to intensify structural reforms now.

The report pointed out three main challenges France needs to face up to: to ensure medium-term fiscal sustainability while improving the structure of the tax system to improve incentives and reduce costs; to end the insider-outsider duality in the labor market and to increase employment rates among low-skilled workers and other groups by reforming the labor market; to promote competition, stimulate economic growth, and create more jobs by further reforms.

The OECD said that France is highly productive in some ways, but its high deficit spending is hurting, not helping, the government's intention of looking after the elderly.

The 30-member OECD plays a prominent role in fostering good governance in public service and corporate activity. It helps governments to ensure the responsiveness of key economic areas with sectoral monitoring. By deciphering emerging issues and introducing policies that would work, the organization helps policy-makers to adopt strategic orientations. It is well known for its individual country surveys and reviews.

It publishes an economic survey for each OECD country every one to two years.

Source: Xinhua