France’s government has promised 20 billion euros (US$25 billion) in tax credits to businesses as part of a “competitiveness pact” that it hopes will spark innovation and lower unemployment — but falls short of calls in a recent report for a “shock” to the economy.
The announcement of the plan on Tuesday came a day after a government-commissioned report — by Louis Gallois, former head of Airbus parent EADS — said the country’s ailing economy needed a big kick to stay globally competitive.
French Prime Minister Jean-Marc Ayrault said the government’s plan, which includes a 500 million euros fund to help struggling small businesses, would put the country “back at the heart of the world economy.”
“This new French model will consist of finding a way back to creating jobs and will no longer be financed by permanent deficits,” he said.
However, the government plan has fallen short of some of the recommendations in the Gallois report and raises fears that the administration of French President Francois Hollande is not doing enough to revitalize the economy.
For example, the 20 billion euros tax credit is to be implemented over three years — with 10 billion euros available next year and the rest split over the following two years. Gallois recommended in his report that the breaks should happen over one or two years to have the maximum effect.
The measure also takes the form of an income tax credit, rather than a reduction in the social charges employers pay on salaries, as Gallois had suggested. The government said that its method is designed to have immediate impact, while deferring payment until 2014 when next year’s tax bill comes due. However, that assumes that companies will start spending and hiring right away in anticipation of the credit.
France faces several major economic challenges, including an unemployment rate of 10.8 percent, and labor regulations that make firing so difficult it has discouraged hiring. Growth has ground to a halt, and several major companies have announced thousands of layoffs in recent weeks.
Gallois warned in his report that the biggest problem in France is that because of high labor costs, companies have to slash prices in order to compete. Without high profit margins, companies have very little to invest in product innovation and quality. Ayrault promised that the pact would give companies more room to maneuver and address this problem.
The government’s plan focuses on small businesses, often the motors of innovation and employment. It calls for small businesses to receive special help to compete internationally, and billions of euros in a new public investment bank will be reserved for smaller companies.
The government also promised to reduce red tape and to limit changes to its tax and other policies over the next five years.
Half of the money will come from spending cuts between 2014 and 2015, but Ayrault did not detail what would be cut. The rest will come from new taxes, including a hike to most sales taxes — apart from basics like food which will benefit from a cut — in 2014.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day