President Francois Hollande must act quickly to cut payroll taxes and improve the pension system to boost France’s credibility in talks with Germany about the future of the euro, a former adviser said.
“For France, it’s important to gain credibility by engaging in structural reform,” Philippe Aghion, who advised Hollande during his election campaign and is a professor at Harvard University, said today in a Bloomberg Television interview from Stockholm.
The remarks highlight the challenge facing Hollande as he returns from his summer break next week after three quarters in which growth in Europe’s second-largest economy has stalled. Hollande is scheduled to meet with German Chancellor Angela Merkel on Aug. 23 in Berlin to discuss the next step in tackling Europe’s sovereign-debt crisis.
“Payroll taxes should be transfered to the health tax, the CSG,” Aghion said. “That needs to be done very quickly. Administrative costs and the health system and the retirement system need to be further reformed. I very much hope they will do it.”