French PM and Ministers
10 December 2014

The economic growth and activity bill

The economic growth and activity bill, which was presented to the Council of Ministers on 10 December 2014 and will be debated in Parliament at the start of 2015, is based on three main principles: removing the brakes on business, investment and work. It has a single intended objective: the general interest.
Content published under the Government Valls II from 2014 26th August to 2016 11th February
 
The economic growth and activity bill aims to free up economic activity throughout France and in every sector. Manuel Valls and Emmanuel Macron, Minister of the Economy, Industry and the Digital Sector, presented it to the Council of Ministers and then at a press conference from the presidential Elysée Palace on 10 December 2014. An outline of the plan had already been presented in a statement on 15 October.
 
"The purpose is to do everything for competitiveness and employment, so as to remove obstacles. Everyone must agree to change what does not work well and what stalls economic activity and therefore employment. I know the bill shakes things up, but it serves one interest alone: the general interest."
Manuel Valls
10 December 2014

This act will feed into three major reform priorities:
  • Modernising the market for goods and services by unblocking several sectors;
  • Stimulating investment by speeding up the simplification agenda, encouraging innovation and boosting the country’s attractiveness;
  • Developing employment and social dialogue by improving the labour market.


Removing the brakes on business

French PM after the Council of Ministers on 10 December 2014
The bill's ambition is to remove the brakes on business. "We need to open up certain sectors and certain professions, and make them easier for young people and the less well-off in society to access".

Modernising regulated professions
 
The bill proposes a series of measures to modernise regulated legal professions. Several blockages must be removed: an insufficient number of facilities, while the population is increasing, and a lack of cross-industry cooperation for some of them. "These professions are not open enough with each other, to help them organise better, to provide a better offer to their customers, whether businesses or individuals"; finally, the costs charged are often obsolete: for French people there is little transparency in this pricing system and it sometimes has a negative influence on their purchasing power.
 
The modernisation will be carried out in several areas:
  • Facilitating start-ups and siting, particularly for young professionals, in order to create business;
  • Opening up access to capital, to encourage investment, make business more effective and encourage cross-industry cooperation;
  • Regulating charges to better reflect real costs.
Opening up the coach transportation offer

At the moment, regional coach journeys are only authorised on lines serving foreign countries: the passenger's journey must only be one part of the coach's international route.

The bill proposes freeing up the coach transportation offer across the entire country. Its objective is to encourage mobility, particularly for young people.

This reform will enable people, especially young people, who cannot travel by train for cost reasons, to travel more easily.

It will also create economic activity, and consequently several thousand jobs. "Opening up coach transport doesn't mean the death of the train", which remains "one of the country's areas of excellence", the Minister specified. "But it is a new aspect of our economy which is opening up. The SNCF [French railways] will be involved since it already has business in this area, and other competitors will come in as well".
 
Strengthening road activity regulation

The bill is intended to improve the governance of motorway tolls to the benefit of users and the control of work contracts on the motorway network. It aims to allow individual coach transportation. The text extends the competence of the Railway Activities Regulation Authority (ARAF - Autorité de Régulation des Activités Ferroviaires) - which becomes the 'Railway and Road Activities Regulation Authority' (ARAFER - Autorité de Régulation des Activités Ferroviaires et Routières) - to regulate the motorway sector and scheduled passenger road transport.

Its objectives are to:
  • Limit the increase in motorway toll rates for the benefit of private and business customers, in particular road goods transport companies.
  • Guarantee better access for construction companies, especially SMEs, to motorway company contracts by expanding the competition obligations on these contracts.
  • Enable the development of the inter-city coach transportation offer, while ensuring that it does not harm the balance of a grant-aided public service that exists on the same service within a region.
Reducing the time and cost of acquiring a driving licence

One other measure in the bill is to reduce the time and cost involved in sitting the driving licence. The economic growth and activity bill includes one of the measures announced by the Government in June 2013 to reduce the waiting time for category B driving tests.
 
Freeing up the property market

The bill's objective is to remove the regulatory obstacles that limit the supply of new housing, to address the urgent lack of house-building in areas under pressure, by freeing up land. The Minister announced that over the next few weeks the Government will also be announcing simplification measures for the building sector, in particular to reduce the time taken for building permits to be granted.
 

Investing 

"If we want to kick start our economy, we need to simplify investment criteria and invest public and private money better".

To "breathe life into our asset portfolio", the bill contains measures to encourage more effective intervention from the State as a shareholder. It authorises the implementation of public shareholding companies’ industrial projects, such as the coming together between the French public company Nexter and the German company KMW. The bill will also authorise transfers of public assets so that, apart from debt reduction, a dynamic industrial policy is conducted and investment financed. This will enable us to "reinvest in our priorities": energy transition, digital technology, and so on.

 
83%
83% of employees have access to at least one employee savings scheme in companies with over 50 people.
This figure drops to 20% in companies with 10 to 49 employees and 12% in companies with fewer than 10 employees.
The bill also includes reforms to employee saving schemes to better finance the economy and develop these tools for the benefit of employees, as announced by the President of the Republic at the social conference in July 2014. Employee share-ownership gives employees greater involvement in their company’s development and it allows high‑potential staff to be recruited in start-ups and small and medium-sized enterprises.

The aim is to align certain technical aspects relating to profit-sharing and employee share-ownership:
 
  • The periods for paying out profits and share-ownership will be matched;
  • It will now be possible to set up a collective pension savings plan (Perco) via ratification by two thirds of employees when there is no trade union delegate or works council;
  • The tacit renewal methods for profit-sharing agreements will be simplified.
     

Working

Overhauling the industrial tribunals system

The industrial tribunals system is no longer operating satisfactorily: the average times involved are 27 months, and 4 years in Paris when a ruling is required; the average conciliation rate is 6% and the average ruling rate is 32%. The average appeal rate (which involves extra time) is 65% of cases and the judgement review rate is 71% of cases struck on appeal (compared with 30% on average in other areas). A system overhaul is therefore a necessity.
 
Work on Sundays
 
The reform to Sunday trading legislation will draw on the Bailly report’s proposals in order to reduce distortions between shops and improve compensation for those employees who volunteer.
 
In concrete terms, the aim is to offer local councils the ability to grant twelve rather than five Sunday openings for shops throughout the year. Five Sundays out of these twelve will be compulsory (whereas at the moment a mayor may decide to grant none of them). As proposed by elected representatives, the opening of shops in tourism and commercial areas will also be simplified. In all cases, and particularly for companies with over 11 employees, Sunday opening must be agreed on by a majority of employees, with salary and time-off compensation.
 
In the specific case of areas with strong tourism and economic potential, the bill proposes that the criteria for these areas may be defined by decree and that an order may take the initiative to open them, after a discussion with elected representatives. "The national interest is for these areas to be able to breathe". Allowing shops to open in these areas at evenings and on Sundays, under the same salary and time-off compensation conditions, will enable business and jobs to be created.
 

Renewing social dialogue

 
The bill aims to reap the benefits of the negotiation under way between the social partners regarding the quality and effectiveness of social dialogue in companies and the improvement of employee representation, by opting for a more strategic, less formal and therefore simplified approach.
 
It is also about initiating effective dialogue for all employees, including in very small companies.