Hollande unveils €2bn job-boosting plan to tackle ‘emergency’

France's president has moved to address years of structural unemployment

France’s president François Hollande yesterday declared “a state of economic and social emergency,” as he unveiled a €2 billion plan to overhaul the economy.

His plan would reform France’s 3,689-page labour code and establish a new unemployment insurance regime, but only after long, arduous negotiations of uncertain outcome.

The French leader repeatedly compared the challenge of confronting terrorism with that of tackling unemployment. “Aside from the security of the French people, the only question that matters is employment,” he said.

There are 5,743,600 jobless people in France; 650,000 more than when Hollande was elected in 2012 and more than 10 per cent of the working population. He has long promised not to stand for re-election unless he can "reverse the curve of unemployment".

Just as he declared a state of emergency to protect the country from terrorism, Hollande said, “I consider that, faced with the disorder of the world, faced with an uncertain economic situation and persistent unemployment, there is also a state of economic and social emergency to be proclaimed.”

Because France has endured high structural unemployment for three decades, “employment must be our sole battle, to provide stability, clarity and visibility to employers and employees”, Hollande said.

It was important to recognise the scale of the “gigantic mutation” represented by emerging economic powers, the digital revolution, the shift to a low-carbon economy and “whole sectors of [economic] activity” that are “turned upside down” by the so-called sharing economy.

Agility vs security

“These evolutions heighten the contradiction between the dynamics of economics, which require more agility, and social cohesion, which needs greater security,” Hollande said.

The near impossibility of resolving that contradiction is at the heart of France’s economic malaise. Visiting Paris last week, Tánaiste Joan Burton said that when she talks to French people working in Ireland, “They always refer to the French system as being very secure, but also very rigid.  There’s a tension between the two.”

Hollande said that France must “redefine our economic and social model” but without renouncing its foundations. “France must of course take inspiration from what works elsewhere, but she does not have to align herself on systems which, if they were applied here, would be rejected without producing any benefits.”

He sought the middle ground. “Between liberalism without conscience and immobility without a future, there’s a path called ‘the society of work’, in which work is encouraged, valued, respected,” Hollande said. He wanted “more security for business, to hire and adapt staff as dictated by economic circumstances, but also more security for employees regarding changes and mobility”.

The first pillar of the new French model is business competitiveness, Hollande continued. In 2014, he gave €40 billion to businesses through the “pact of responsibility and solidarity” to encourage them to hire. He promised to transform the pact “as quickly as possible” into a permanent decrease in social charges.

As part of the drive for competitiveness, Hollande yesterday promised to give small and medium-sized enterprises who recruit a new employee a €2,000 bonus each year for the next two years. “What planet are François Hollande and the members of his government living on if they think a cheque for €2,000 is enough to make a company hire?” asked Guillaume Larrivé, spokesman for the opposition conservative party Les Républicains (LR).

Benefits vs training

Hollande promised to cap unemployment benefits and said that labour minister Myriam el-Khomri would “adapt our labour law to the economic realities of business”.  France, he noted, “has the longest unemployment benefits in

Europe

and the shortest training for the unemployed”.

Yet Hollande called security for workers “the second pillar” of his new French model, guaranteed by a lifelong “account” that tallies rights to training, holidays and other benefits.

Hollande’s third pillar was “offering new chances to everyone”. He promised to double training, to include half a million jobless people, at a cost of €1 billion. The combined cost to the state of training and bonuses will be €2 billion. Anticipating the critics who interpreted his speech as a last-ditch attempt to salvage his chances for re-election, Hollande said, “What matters is to see what can be created in our country, without regard to whatever electoral deadlines.”

An Odoxa opinion pool for iTele showed that 77 per cent of the French do not believe the plan will reduce unemployment. Reaction on the right, far left and in the media was mostly skeptical.

Laurent Baumel, a rebel socialist deputy, tweeted that Hollande had invented "liberalism without results". The extreme right-wing National Front called "the umpteenth jobs plan" an election scheme and a compilation of measures announced before.

Eric Coquerel of the far-left Parti de Gauche tweeted: "€2 billion is a lot of money just to doll up unemployment figures."