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How to reflate France's economy - Essay

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Introduction

Grégoire Michelin 2nd2 13/11/12 Economy Essay “We” in the essay = me and my government. 1428 words Introduction There are two different ways to help France’s economy get back on track. They are austerity and growth. Austerity programs consist in a set of policies established by governments in financial debt difficulties. These policies aim to reduce spending for public goods and services. (Example in France, with president Sarkozy, approximately 150.000 civil servants were fired, this decreased the amount of money used to pay civil servants in France, which in turn, made it possible to run the country without having to borrow as much money). Growth programs consist in increasing the GDP and spending money, to reflate the economy. Of course this money has to come from somewhere, so growth programs often include imposing a lot of taxes. (Example in France, with president Hollande, taxes were imposed on bank profits, and taxes on the richest part of the population were increased). Economists are very divided on this subject, and both of theoretically work; it depends of the situation we are in. Economic Program Austerity is a short term solution only; a country’s economy cannot rely on it forever. This is why as a president; it would be good to start by making the debt of France smaller, then using this to our advantage, and Firstly, we have to make France more competitive. ...read more.

Middle

This governor would be in charge of all the cities in his department, and when a decision is to be made, 20 inhabitants of the department will be called, to hold a ?committee? and make the decision. It will be a duty, which means the inhabitants will have to go. This will help the economy, as there will be only one person to pay per department, and not dozens of mayors, it also gives a ?voice? to the citizens in decision making. There are many people who are unemployed in France (10%) and receive unemployment benefit for a very long time, without trying to find work. As this does not motivate them to find one because they receive money without doing anything, we will keep on giving this unemployment benefit, but only for 2 months, the time for them to find work. This reform will motivate them to find work, this way they will be productive, therefore helping a company or industry to grow, and money will not be wasted. This change will of course also make unemployment decrease. Small companies are very important to the economy, as they might end up as the next multinationals, but they are heavily taxed, which makes them very hard for them to grow. If we make these taxes smaller, people would be encouraged to start their own companies, and this will create employment. ...read more.

Conclusion

Little trades do not buy products as low priced as supermarkets do, which would make money for producers. In the case of a supermarket, the trade and agriculture sector would both benefit from this tax. A French household produces in average 16.4 tons of Co2 every year; this is far too much. To avoid this, and preserve the environment, a tax will be imposed on households that end the year with more than 16 tons; of course this number will decrease every year to improve the given results. Renewable energies provide 13% of the electricity needed in France, nuclear energy provides 76% and fossil fuels provide 11%. We would invest in research for renewable energies (Hydro-energy, wind energy, solar energy), and close down the most risky nuclear reactors. (For example the 4 reactors in Blayais, Braud-et-Saint-Louis, which are not very productive and are very old and unsafe). Conclusion As a president, I would go towards austerity first, to reduce the debt of France, and to have more possibilities in my actions later. France is already in a dangerous situation, and going into a politic of growth would be spending too much money that we don?t have (Which is why I chose austerity as a short term solution), and it would be too much, France would go into a recession. After a period of austerity (Which means: after having reduced the debt), I would have gone in a politic of growth, which would have thrown France?s economy back on track. ...read more.

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