French President Jacques Chirac has proposed ways of making the country’s economy more competitive.
In a New Year speech, Chirac responded to business leaders’ complaints that high taxes and social charges and strict labour rules make them less competitive:
Chirac said: “Companies that distribute benefits fairly between their employees, in the form of profit sharing or higher wages, and their shareholders will benefit from a reduced rate of corporate tax 20% in five years.”
Currently the tax on corporate profits in France is 33.3%. In Germany it is 38.6%, in Italy 37.3%, British tax is 30% while in Ireland it is just 12.5%.
The average throughout the EU is 25.8%.
Chirac said France must face up to competition from
fast-growing economies such as China and India by giving French companies the tools to compete.
The measures he proposed could only take effect after April’s presidential election. Chirac has still not said if he will stand for re-election.