In its latest economic survey, the OECD predicted the growth of France, the eurozone’s second largest economy, to expand by 1.7 percent this year, up from a previous estimate of 1.3 percent, the best performance since 2011.

The survey, however, noted that “further reforms are now needed to maintain current levels of social protection, boost jobs and ensure that public finances are sustainable.”

With productivity and the standard of living remain generally high, it recommended “reforms to make taxes more favorable to job creation and high productivity, a more inclusive labor market and the need to improve lives in poor and marginalized neighborhoods.”

In addition, the OECD called for more flexibility to businesses to negotiate working conditions and payment, simplifying the complex training scheme system and encouraging enterprises to take on young trainees from disadvantaged backgrounds.

In this context, OECD Secretary-General Angel Gurria said the government’s labor reform was “crucial.”

“The right balance needs to be found between an inclusive labor market guaranteeing strong worker protection and representation, and one which is flexible enough to allow businesses to innovate and compete,” Gurria said.

In order to reach healthy finances and preserve social protection system, France needs “a long-term strategy … to reduce public expenditure, ensure debt sustainability and make room for further tax cuts and a simpler tax system” to alleviate “tax burden with heavy economic and social costs,” according to the OECD report.