Friday, January 25, 2008

Sarkozy Claims to Back Attali Commission's Liberalization Plan: But Rejects Recommendation to Scrap Precautionary Principle!

Sarkozy backs liberalisation plan [???]

By Ben Hall in Paris

Financial Times

January 23 2008 20:04

President Nicolas Sarkozy on Wednesday gave his backing to a far-reaching plan to liberalise the French economy and raise its trend rate of growth to 3 per cent within five years.

Mr Sarkozy said he supported “in the main” the conclusions of a commission chaired by Jacques Attali, the economist and former socialist presidential adviser, and would convene a ministerial committee next month to decide which of the measures to put in place first.

The Attali commission produced 316 proposals to liberalise sheltered sectors of the economy, cut the cost and improve the flexibility of the labour market, and streamline public administration.

“If some people have been alarmed by the contents of your proposals, I find them rather reasonable in the main”, Mr Sarkozy said as he received the report from Mr Attali.

The president signalled his support for opening up regulated services, such as taxis, to greater competition, saying some professional regulations were “perfectly obsolete”. But he said this would require careful negotiation with those affected “who cannot be ignored for reasons of equity”.

Opening up regulated professions is likely to be one of the most hotly contested recommendations.

François Hollande, the opposition socialist leader, criticised “the many worrying proposals” in the Attali report.

According to Mr Attali, Mr Sarkozy disagreed with only two of the commission’s 316 recommendations: the scrapping of the precautionary principle (conferring the benefit of the doubt against technological innovations) enshrined in France’s constitution and the abolition of the department, the revolutionary-era local government unit.

However, Mr Sarkozy said nothing about the commission’s recommendation for France to open its doors to 250,000 immigrants each year as a way of lifting its growth rate by 0.5 per cent.

The Attali commission set out a blue print for cutting unemployment from 8 to 5 per cent, halving poverty and cutting public spending as a share of national output by 1 percentage point a year.

The report makes many sweeping recommendations.

To take advantage of the growth in financial services, the commission proposes that France harmonise its entire set of financial and stock market regulation with that of Britain’s two remove the competitive disadvantage of Paris as a financial centre relative to London.

Although the commission argues its recommendations are broadly cost neutral, it is counting on the Caisse des Depôts et Consignations, France’s sovereign wealth fund, to help finance ten new university “centres of excellence” and universal access to super high-speed internet services by 2016.

Some of the most radical measures relate to public services. The Attali commission wants to confer some activities, such as tax collection, to executive agencies.

It is also proposing a radical shake-up of the schools system, scrapping catchment areas and giving parents a voucher to encourage competition between institutions.

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