Villepin not out of the woods yet

FRANCE: When he took office at the beginning of June, the French prime minister Dominique de Villepin promised "to restore the…

FRANCE: When he took office at the beginning of June, the French prime minister Dominique de Villepin promised "to restore the confidence of the French people in 100 days". Mr de Villepin stole a march on the media - and his rival, interior minister Nicolas Sarkozy - by holding his "100 days" press conference on his 92nd day in office yesterday. Mr Sarkozy will have his press conference on the 99th day.

Eleven per cent of French people polled by CSA said they now had more confidence in Mr de Villepin than when he took office; 16 per cent had less. Seventy per cent oppose his scheme to raise €10 billion by privatising the toll system on French highways for the next 27 years. And 58 per cent oppose his chief weapon in the fight against joblessness - a "new hiring contract" or CNE (contrat nouvelle embauche) that makes it possible to fire employees without reason during their first two years on the job.

French unemployment has decreased from 10.1 per cent to 9.9 per cent since June. The unions and opposition socialists claim the decrease is illusory, due to names being crossed off the register, the creation of state-funded jobs for youths and increased use of apprenticeships.

Mr de Villepin seems to have more gifts to hand out than Father Christmas. He's offering a €1,000 bonus for those who find work after a long spell of unemployment and, at a cost of €1 billion, a 50 per cent increase in the employment bonus that already supplements the income of 8.8 million low-wage earners.

READ MORE

The goal, Mr de Villepin said, is "for it to be more worthwhile and easier to work in France than to live on welfare". At present, he noted, "a woman who receives €630 per month from the single-parent benefit loses money if she works half-time", and "a single person working half-time for minimum wage earns only €30 more than he would on the minimum insertion revenue". In what his office calls a "fiscal big bang", Mr de Villepin promised to cut French income tax by €3.5 billion, starting with the 2006 fiscal year. Taxpayers will feel the relief just before they go to the polls for the 2007 election.

With the French economy expected to grow only 1.5 per cent this year, and a public debt of €1,067 billion, the unanswered question is how Mr de Villepin will pay for it.