WHEN François Hollande dumped his prime minister in March 2014, it marked a U-turn for the Socialist president. Out went the politics of envy and punitive taxes. In came talk of lower public spending and encouraging business. Under Manuel Valls, the new prime minister and a voice of Blairite moderation, the language has changed, to the relief of those exasperated by the unreconstructed French left. But sceptics have been waiting to see if fine words would be matched with deeds.On the public finances, the government has shifted its deficit reduction in 2014 from tax rises, which were throttling investment and growth, to curbing spending. It has promised no further tax increases in 2015. Even Mr Hollande’s infamous 75% top tax rate, a much-hyped campaign promise, is disappearing. The upshot will not be enough fiscal consolidation for France to obey the euro-zone rules in 2015; it has unilaterally pushed back to 2017 its promise to bring the deficit down to 3% of GDP. But at least the direction is now right.A bigger question-mark hangs over efforts to improve competitiveness. These rest on two pillars. One is a reduction in payroll taxes on companies, worth €12…
