|
 Flat business investment remains a drag on the improving outlook for
the euro zone's second-largest economy at a time when consumer
spending and exports are picking up.
The government will allocate 2.5 billion euros ($2.72 billion) over
five years for tax rebates to boost investment, Prime Minister
Manuel Valls said.
A key measure will be allowing firms to write down 140 percent of
the value of industrial investments they make between now and April
2016.
Local authorities will be reimbursed more quickly on sales tax paid
on their public works investments and some tax rebates on housing
works will be extended.
The measures were part of an updated multi-year budget plan expected
to be unveiled later on Wednesday, in which France will target a
smaller reduction in its structural deficit in 2016 and 2017 than
called for by the European Commission.
After the ruling Socialists suffered severe defeats in local
elections last month, the government announced it would quickly take
steps to boost investment and jobs, but the measures announced on
Wednesday included no major steps on jobs.
Ministers have mentioned the possibility of making it easier to hire
and fire staff, but the prospect of a swift overhaul of work
contracts is fading, said labor unions and employers' groups who
took part in talks on the issue last week.
Cutting red tape in the labor market is at the heart of reforms
sought by the European Commission.
[to top of second column] |
A draft law seen by Reuters shows the government does plan to
eliminate some red tape. But the bill set to be unveiled on April 22
will not cut the number of bureaucratic hurdles that employers say
hamper growth once they hire 50 or more workers.
France's official statistics office INSEE estimated last week that
corporate investment would be completely flat in the first quarter
and up just 0.1 percent in the three months to June. Investment in
real estate, whether by households or businesses, will remain firmly
in the red.
Valls said a deal had been struck with motorway operators that will
unlock a 3.2 billion-euro road investment plan. Talks on the plan
will be wrapped up soon and include no toll hike for this year, he
said.
(Additional reporting by Yann Le Guernigou; editing by Andrew Roche)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
