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The Lingering Travails of the Loi du Travail

  • While junior doctors strike in the UK, a French general strike is planned on Thursday over proposed labour market reforms.

  • IMF, OECD, Moody’s and HSBC all find that France’s current labour laws are partly responsible for economic underperformance. Yet 70% of the French population still oppose the reforms. 

  • Labour laws are also leading to increasing number of temporary contracts. Since 2000, the proportion of new short-term contracts has increased by 11 percentage points.

  • Without reforms, the competitiveness gap between Germany and France will grow. Germany is the 4th most competitive country while France is 22nd.

  • The Government has already watered down the reforms. Proposals to cap compensation payments for unfair dismissal have been dropped.

  • Further reforms are unlikely after the 2017 Presidential election. Reforms are deeply unpopular and other priorities have risen up the political agenda. 

 Author Daniel Mahoney wrote an op-ed for City A.M. on the issues raised by this bulletin. 

(Image: marcovdz)

Nicolas Bouzou, Daniel Mahoney & Tim Knox - Wednesday 27th April 2016

Daniel joined the Centre for Policy Studies as Head of Economic Research in November 2015. He was promoted to Deputy Director in March 2017. Prior to joining the CPS, he worked in research roles for a number of parliamentarians.

Tim Knox was Director of the CPS from 2011-2017. Before he was Director, Tim was the Editor at the CPS - a position in which he was responsible for publishing papers by every Conservative leader since Mrs Thatcher as well as by hundreds of leading academics and opinion formers.