France’s competitiveness indicators continued to deteriorate last year compared to European neighbors, according to an annual report published on Tuesday by the Rexecode Institute, which calls for a continued reduction in production taxes.
the trade deficit has hollowed out 26.7 billion euros between 2019 and 2021to reach a record of 84.7 billion euros this year, recalls the institute in its 15th annual review of French competitiveness.
Rexecode attributes this poor performance more to manufactured goods than to energy prices, a symptom of France’s growing deindustrialisation.
The French market share of goods exports from the euro zone also continued its decline that began in 2020, after several years of calm, with less than 13% of the total. France has recorded the strongest decline in its market share in twenty years, a situation deemed worrying by Rexecode.
And this while the health restrictions have not really been more severe than elsewhere in Europe, also indicates the reputable organization close to employers.
According to the institute, the lull of the previous decade was partly linked to the introduction of cost-competitiveness measures.
Rexecode believes that the reforms at the start of Macron’s five-year term focused more on attractiveness, through reforms on capital taxation and labor law, which however have not materialized so much in the figures today.
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The institute calls first improve France’s cost-competitivenessthrough new reductions in production taxes, taxes which include all taxes paid by companies and not based on their profits.
These taxes, which bring in until 2020 a little more than 70 billion euros per yearhave already t lowered by 10 billion euros by the current government as part of the recovery plan.
They should ideally reach the average level of the euro zone, suggests Rexecode, which supposes a considerable effort of around thirty billion euros, offset by the reduction in public spending. These production taxes now represent more than 3% of GDP in France.