France - EU

France refuses EU order to include drugs, prostitution in GDP figures

France is refusing to comply with a European Union demand to include proceeds from the drug trade and prostitution in its gross domestic product (GDP) figures. The national statistical institute (Insee) says that neither can be counted a voluntary transaction.

Prostitutes in the Bois de Boulogne in Paris
Prostitutes in the Bois de Boulogne in Paris Reuters/Christian Hartmann

Britain, Belgium, Italy and Spain have all said they will abide by new norms set by the European System of Accounts, based on a recommendation from the Eurostat statistics authority.

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Member-states have been told to calculate wealth created by the majority of illegal activities, including drugs and prostitution, and include them in national statistics.

The Bank of Italy estimates that the “criminal economy” was worth 10.9 per cent of Italian GDP in 2012, while the UK’s Office of National Statistics puts income from drugs and prostitution in 2009 at about 9.7 billion pounds (12 billion euros), 0.7 per cent.

But French ministers have slammed the idea that prostitution is a free commercial transation and Insee says it will not include it or narcotics in its GDP figures.

The institute considers that it already accounts for prostitution practised under cover of other activities along with tax fraud and unregistered work, according to economic syntheses and studies director Eric Dubois.

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“But there is also street prostitution, which is principally the work of mafia networks and is pretty much a trade in people without legal status,” he told Le Monde newspaper. “Basically the criterion of mutual consent is probably not confirmed.”

Insee also considers that drug addicts are not exercising free will, he explained, although the trade will be included in calculations of gross national revenue to be sent to EU institutions.

A French government minister has joined a Belgian colleague in protesting to the European Commission about the new methods of calculation.

“Prostitution is not a commercial transaction that has been freely entered into,” Women’s Rights Minister Najat Vallaud-Belkacem and Belgian Interior Minister Joëlle Milquet wrote in a letter. “Believing that it is is an ideological choice, it is a mirage and an offence to millions of victims of sexual exploitation around the world.”

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