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IMF: France President Macron Has 'Unique Window' for Reforms

MNI (London)
--Major Risk Is That Implementation Is Derailed by Protests
By Jack Duffy
     PARIS (MNI) - French President Emmanuel Macron has a "unique window" to
enact a bold package of reforms to tackle France's long-term economic problems,
the International Monetary Fund said Thursday. 
     In a so-called Article IV report on the French economy, the IMF said solid
economic growth and falling unemployment for the rest of the decade should
create space for Macron to rein in government spending and boost France's weak
     "With a strong mandate, the government has now a unique window of
opportunity for a bold and comprehensive economic reform package, as the
recovery is gaining pace and job creation is picking up," the IMF report said.
     The IMF forecast that the French economy will grow by 1.6% this year and
1.8% in 2018, roughly in line with government estimates of 1.7% for both years.
The Fund is more pessimistic on France's deficit outlook, however, estimating
budget shortfalls of 3.0% of GDP for this year and next, compared with forecasts
of  2.9% and 2.6%, respectively, by the government. 
     "Major efforts are needed from the start to meet 2017/2018 deficit targets,
with many measures yet to be specified," the IMF said.
     The Fund sees French unemployment dropping steadily as the economy expands,
declining from 10% last year to 9% by next year and 8% by 2021. 
     The major risk to the forecast is that reforms are derailed by public
opposition, the IMF said. 
     "Eventual political or social resistance to the government's policies could
complicate the social dialogue and undermine business sentiment, slowing
investment and hiring," the IMF said. 
     "It could also derail fiscal consolidation, leading to an entrenchment of
the budget deficit and public debt at current high levels," the report said. 
     Protests over Macron's reforms have been heating up but so far not reached
levels that have caused previous governments to backtrack. Some 200,000 union
members marched on Sept. 12 to protest labour market reform measures and more
demonstrations are planned over the next 10 days by both unions and Macron's
left-wing political opposition. 
--MNI Paris Bureau; tel: +33 1-42-71-55-41; email:
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MNI London Bureau | +44 203-865-3812 |

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