Euro Watch

French President, Nicolas Sarkozy is been moving fast, however the question is, can he proceed promptly enough to avoid the ailing economy of France from getting worse? In the last week Nicolas Sarkozy met the Pope at the Vatican City and launched a dialogue to refurbish the labor laws and also led an environment-safety assignment to the jeopardized region of Camargue. However, can the 52 year old French President act fast to keep away France from the sickening economy? Nominated on an oath to break free with the strategies of previous governments, Sarkozy can by now point to some input accomplishments.

Within few weeks of his taking over as President last May, Nicolas Sarkozy implemented a new law permitting the people to work overtime and get paid extra. This was mainly outlawed under the communist inspired limit of 35 hours work in a week law. In a very crucial symbolic success, he even stood to his ground during the railroad and transit workers strikes over his policies to scale back their munificent taxpayer funded pension schemes. As the government arrears were getting worse, Sarkozy barely smashed the ground of other difficulties which were growing more sharply by the day.

It was assumed that the French economy would grow a weaker rise of about 1.9 percent this year in comparison with the EU’s average of 2.9 percent. As the nationalized debts were rising quickly, EU has cautioned that by the year 2009 public finances of France would be the vibrant among the 27 members of European Union. Voters were increasingly worried about the inflation rate which struck at 2.4 percent in November lower to the Eurozone average of 3.1 percent.

However, it is been noticed that in this sluggish economy of the country, most of the business would not like their employees work overtime that will further cut the Presidents promise of making people to work more to earn more. Moreover, a 22 billion dollar tax reduction package endorsement last year has even weakened the government arrears while making minute economic motivation which Sarkozy had anticipated to spark. The latest mortgage interest cuts, for instance, did not succeed to motivate real estate sales that have slowed as of increase in interest rates.

There are several aspects which the French President can do to offer the current economy of the country to boost quickly. For instance, he could release certain restrictions on retailers by letting them to stay open on Sundays and late in the evenings. This move could create almost 500 thousand jobs, although it would be solidly opposed by few of the smaller retailers who would fear to lose their business to some of the bigger competitors who would gain more profits by extending for extra hours.
Eric Chaney, who is the chief European economist for Morgan Stanley said that another priority would be to release the strong anti-layoff regulations of the country. The French President has arranged talks between the unions and employers planning to overhaul the labor laws. However, if these two sides cannot reach to a settlement in quick time, then the government could march in with some of its own suggestions. Eric Chaney added by stating that this would definitely be a big test and if they act quickly it could be possible by end of May or in the beginning of June. Certainly, it is clear that Nicolas Sarkozy’s early race is set to turn out to be a marathon.

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