Attali Commission - A Plan for the Liberation of France

One of the most important reports in decades on the future of France has been presented to the French Government, but will its recommendations ever see the light of day? The Attali Commission on Economic Growth was set up by President Sarkozy following his election in May 2007. The Commission is an iconoclastic group of 40 members of the éminence grise of France, who were told by the President to go away and come up with a programme of action to improve the level of competitiveness of the French economy. The report of the Commission was finally unveiled last week, at a ceremony in which President Sarkozy and his leading Ministers were present. When the Commission was created, President Sarkozy somewhat imprudently and presumptuously stated that he would implement their recommendations. When the day of reckoning came last week, he gave a general welcome to the report, but he also made it clear that he did not accept two of its key recommendations (abolition of administrative counties and removing the 'principle of precaution' from the Constitution), and that implementation of the other recommendations would be subject to achieving a wider consensus. He was probably right to hedge his bets for the general reaction to the report has been the usual cacophony of negatisivm whenever the prospect of change is in the air. Not only has this opposition come from the usual suspects of trade unions and professional groups, but it is clear that there is a lot of concern within his own UMP party, which will cause him to sleep lightly at night. One of the most controversial proposals is to increase the level of immigration, in order to meet labour requirements. Against the backdrop of the proposed introduction of a quota system for immigration, and a commitment by the President to deport each year around 25,000 illegal immigrants, it will be interesting to observe just how he deals with this one. He was noticeably silent on it at the release of the report. Another controversial proposal is one to end controls on certain trades and professional occupations, notably those of taxi drivers, avocats, bailiffs, notaires, hairdressers, and chemists. There have already been howls of protests from all of these groups, so expect some moderation of the proposals to take place if the idea does ever see the light of day. One of the central tax proposals of the Commission is to transfer employer and employee social security costs onto the general system of taxation. More specifically, by a hike in the rate of social welfare levy and VAT. Once again, the President is going to find himself in great difficulty in implementing this proposal. As one of the central promises of his election campaign was to increase the standard of living of households, it is difficult to see how this can be squared with any increase in domestic taxation. More generally, there is also concern about a lack of coherence in the report, and its failure to address the underlying need for a greater level of investment in the economy. Many of the recommendations are rightly about tackling the regulatory indigestion under which the country suffers but, whilst the report is clear about the destination, the route to get there is less obvious. If your French is up to it, you can read the report here