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ECONOMY

France optimistic despite meagre growth figures

France's economy minister put on a brave face on Friday despite the latest economic figures showing the French economy is struggling to register any growth, unlike their friends on the other side of the Rhine.

France optimistic despite meagre growth figures
France's economy continues to struggle, with the latest figures giving no reason to rejoice. Photo: AFP
France's economy expanded by just 0.4 percent last year as investment slumped, official data showed on Friday, but the finance minister said he expected a "more definite upturn" in 2015. 
 
Total investment in France fell by 1.6 percent in 2014, a higher drop than the previous year, drawing concern for the eurozone's second largest economy.
   
Finance Minister Michel Sapin said the lacklustre growth was in line with expectations.
   
"It's obviously still too weak but conditions are met to allow a more definite upturn in activity in 2015," he told reporters.
   
The government has so far been unable to kickstart much-needed growth in a country beset by record unemployment.
 
Over the Rhine the German economy recorded a strong end of year performance with growth of 0.7 percent meaning the economy expanded by 1.6 percent in 2014.
 
"The German economy ended a volatile year on a very strong note," said ING DiBa economist Carsten Brzeski.   
 
President Francois Hollande has launched a two-pronged attack to tackle joblessness and push for growth.
   
The first is known as the Responsibility Pact, a series of tax cuts for businesses in return for job creation.
   
The second is a package of reforms aimed at opening up France's closed economy, including extending the number of Sundays per year when stores can open their doors.
   
Most economists believe that France needs a growth rate of around 1.5 percent to create jobs.
   
Sapin disputed this, saying just one percent growth — the target for 2015 — is needed.

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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