France has largely sidestepped the massive budget cuts and reforms undertaken by its neighbors, despite having one of the world's highest proportions of state spending. Unions and companies are currently in discussions to overhaul the labor market - but the issues are so touchy in France that it's unclear how far they'll go.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.
France To Give Businesses $25 Billion Tax Break
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