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France will not 'copy' UK economic model: PM

AFP/The Local · 20 Dec 2013, 09:20

Published: 20 Dec 2013 09:20 GMT+01:00

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French Prime Minister Jean-Marc Ayrault said on Thursday that his government will not copy British economic policies as they had created poverty and inequality.

"I see a lot more poverty, more inequalities and if I was to look for a model to reform France I would want to save the French model reforming it and certainly not copy what others do, especially not if we're not talking about the best," Ayrault told French private TV network TF1.

Asked about cuts in public spending imposed by British Prime Minister David Cameron's government, Ayrault said "France is about to regain the level of national wealth it had before the 2008 crisis (which) Britain has still not

"So the situation in Britain, with the mass poverty that it generated is far worse than in France."

Ayrault criticised Britain's zero-hour contracts under which employees agree to be available for work as and when required, so that no particular number of hours or times of work are specified.

"Do you find this okay?" he asked. "Do you think the French would accept this? This is not our policy."

Economists no doubt will be divided over Ayrault's opinion. While many will agree others will point to France's rigid labour market and lack of competitiveness as reasons why Paris could do far worse than take a leaf out of Britain's book.

"France could definitely do with a dose of Thatcherism," Tomasz Michalski, Professor of Economics at Paris’s prestigious HEC business school, told The Local. "The country has maxed out on state spending and has maxed out on debt. It needs a change of thinking to get back to reality and realize that there are market-based economies that are generating wealth. Many people forget that. (See below to read more of what Michalski had to say)

SEE ALSO: Why France could do with a dose of Thatcherism

Socialist Senator Richard Yung however, backs Ayrault's view and told The Local previously that France should steer well away from copying Britain.

“Look at the divide between rich and poor in Britain. In France we still have a welfare system which brings solidarity and equality to society," Yung said.

Ayrault, a socialist, spoke hours after the French parliament approved a belt-tightening budget for 2014 with huge spending cuts and tax hikes in a bid to rein in the country's high public deficit.

The second budget of President Francois Hollande's government had been rejected by the Senate but passed Thursday in the lower house although the main opposition centre-right UMP party and the far-right National Front voted against it.

Based on projected economic growth of 0.9 percent in 2014, the budget aims to bring down the public deficit from the current level of 4.1 percent to 3.6 percent of gross domestic product (GDP).

Story continues below…

In Britain, where unemployment has hit a four-year low, at 7.4 percent, finance minister George Osborne earlier this month hiked the government's economic growth forecasts as the recovery picks up speed.

The economy will grow 1.4 percent in 2013 and 2.4 percent in 2014, Osborne said in his so-called autumn statement.

SEE ALSO: Ten reasons why France is a great place to work

The Conservative minister announced a new cap from next year on welfare spending, and outlined plans for another £3.0 billion ($4.9 billion, 3.6 billion euros) in savings in the public sector.

AFP/The Local (ben.mcpartland@thelocal.com)

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