FedChamber: "Korean Government Should Pay Attention to Economic Reforms of Re-elected French President Macron"

[Asia Economy Reporter Park Sun-mi] It has been argued that the Yoon Suk-yeol administration should pay attention to the economic reforms of French President Macron, who was successfully re-elected last May.

On the 22nd, the Federation of Korean Industries (FKI) evaluated the achievements of French President Macron’s first term (2017?2022), stating that he succeeded in economic reform by reducing the unemployment rate by more than 30% and achieving the highest economic growth in 52 years. According to the OECD, France’s economic growth rate in 2021 was 7.0%, the highest level in 52 years since 1969.

The FKI stated that France’s economic growth stemmed from various reforms pursued during Macron’s first term. As a result of Macron’s bold labor reforms, including restructuring the unemployment benefits system and easing dismissal and downsizing requirements, France’s unemployment rate, which was 10.7% in the fourth quarter of 2016 just before Macron took office, fell by 3.2 percentage points over his five-year first term to 7.5% in the fourth quarter of 2021. Notably, during the same period, the increase in youth employment rate (5.2 percentage points) was 2.3 times that of the middle-aged employment rate increase (2.2 percentage points), indicating that France’s youth unemployment problem began to be resolved.

President Macron also actively pursued policies to make France a business-friendly country. First, through legal amendments over five years, the corporate tax rate was gradually reduced from a maximum of 33.3% (44.4% as a one-time rate in 2017) to 25%, reducing the tax burden on companies, and the corporate tax brackets were simplified from three to one. This contrasts with the Korean government, which took office during the same period and raised the corporate tax rate from 22% to 25%.

The FKI stated that President Macron also succeeded in reshoring French companies through tax cuts. As a result of temporarily lowering the economic land tax from 3% to 1.5% in 2021, the tax burden on companies based in France decreased by 10 billion euros, providing practical support for reshoring. The permanent reduction of the economic land tax, which was temporarily implemented, is a pledge of Macron’s second term, and through this re-election, the corporate value-added contribution tax (CVAE), which accounts for half of the economic land tax, is expected to be abolished.

Kim Bong-man, head of the FKI’s International Headquarters, said, “From the perspective of Korea’s new government, which took office around the same time as Macron’s second term government, Macron’s successful re-election is very meaningful,” adding, “France actively addressed its chronic problems by pushing forward labor reforms through domestic consensus and creating a business-friendly environment through tax cuts.” He continued, “France also demonstrated tailored disaster relief responses during the pandemic crisis, proactive crisis management such as expanding nuclear power for energy security amid the Russia-induced energy crisis, and agility,” advising, “We should pay close attention to Macron’s bold leadership and implementation cases that led to his re-election based on these achievements.”

This content was produced with the assistance of AI translation services.