French employers urge deeper reforms after Moody's downgrade - Economic Times

PARIS: The head of France's largest employers federation called on the government to step up reforms on Tuesday, after credit ratings agency Moody's stripped the country of its top triple-A grade. Laurence Parisot, head of the MEDEF federation, urged the government to carry out ambitious reforms that would prove wrong Moody's concerns about France's capacity to reverse its declining economic competitiveness. Moody's cut France's sovereign rating on Monday by one notch to Aa1 and warned another downgrade was possible if the government fails to follow through on planned reforms. The move had been expected after a similar downgrade by rival Standard & Poor's in January. Fitch Ratings still assigns an AAA grade. President Francois Hollande's Socialist government plans the toughe st belt-tightening effort in 30 years in 2013 and has pledged to cut firms' payroll taxes by 20 billion euros ($25.6 billion). It also aims to strike a labour reform deal with unions and employers early next year. Parisot called for "deeper and more decisive reforms", however, warning that if the labour talks failed to yield ambitious changes financial markets would take fright. "Obviously after Standard & Poor's in January, this downgrade puts particularly strong pressure on us, even more than we already had on our shoulders," she told journalists. "The objective should be to prove the ratings from Moody's and Standard & Poor's wrong. The aim has got to be that our companies find themselves in an economically healthy situation and that they are able to create jobs," she added. Parisot sa id her MEDEF federation would not sign a labour reform if unions reject greater labour market flexibility. "A failed labour market negotiation would go down very badly with the markets," she warned. Download ET's mobile applications for iPad, iPhone, Android, BlackBerry, Nokia and Windows Phone to track news as it happens, live stock quotes, monitor portfolio, get market stats like gainers, losers and movers & much more. To check out free Economic Times apps , Click here The head of France's largest employers federation called on the govt to step up reforms, after credit ratings agency Moody's stripped the country of its top triple-A grade. via Business - Google News

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