The French economic situation is fragile and weak, and the image that comes to mind remains that of corrugated iron—even though its slope is slightly better. The French economy stagnated in the second quarter, interrupting a full year of acceleration.
Growth of more than 1% in 2015, positive external factors with the drop in oil prices and the euro, the initial effects of the responsibility pact on businesses, and the introduction of the labor law suggest a more favorable second half of the year, in line with the forecast of 1.5% growth.
However, other factors could negatively affect the future, such as uncertainties related to Brexit. Finally, we cannot rule out the possibility that attacks might eventually depress economic players—even though this has not been the case so far.
Therefore, Emmanuel Macron and Michel Sapin should devote these months to preparing a 2017 budget, the last of the five-year term, which reassures and supports businesses.
This involves three types of decisions.
– Seeking (finally) simple measures to unlock the wait-and-see attitude of SMEs.
– Avoiding fiscal provisions that aim to take back with one hand what the other had given, a deplorable habit of the “balancing” of finance laws.
– Considering the usefulness of an income tax reduction for those who pay very little of it.
