The OECD today published a study that called for labour market reform in European countries to boost growth.
Mr Jean-Philippe Cotis, chief economist at the Organisation for European Cooperation and Development (OECD), pinpointed areas for reform in leading European countries to close what he said was an economic prosperity gap with the United States.
Presenting a study entitled Going for Growth, Mr Cotis said the OECD's "deep benchmarking" analysis compared the economic performance of the body's 30 mainly industrialised member states and proposed pro-growth policies tailored to each country.
Picking out France as an example, Mr Cotis said joblessness in the euro zone's second biggest economy had remained high in recent years due to a failure to reform the labour market successfully.
"In France the reform of the labour market has, in a way, not yet started," he told a news conference.
To reduce unemployment and raise prosperity, France needed to limit future minimum wage rises so as to stimulate demand for young and less qualified workers, promote on-the-job training schemes, while also cutting state-funded early retirement plans, the report argued.
Unemployment in France rose to a five-year high of 10 per cent in January, and the unadjusted jobless rate in neighbouring Germany stood at 12.6 per cent in February.
Germany should scrap preferential access to unemployment benefit for older workers, the OECD said. The Paris-based think tank based its policy recommendations on a series of benchmark indicators which it said were key to economic prosperity.
The indicators included labour costs, education and the administrative conditions facing businesses.
European Union states have agreed to make their labour markets more flexible as they pursue their Lisbon Agenda, which aims to make the EU the world's most competitive economy by 2010. However, trade union opposition to reforms has slowed their progress.