France in economic state of emergency, says Hollande
WITH AN EYE ON POLLS, THE SENSE OF URGENCY IS ALSO POLITICAL FOR THE SOCIALIST LEADER Francois Hollande unveils a €2 b plan to revive hiring and catch up with world economy
French president Francois Hollande has unveiled measures to cut persistently high unemployment and salvage his chances of re-election next year, saying the country was in an economic as well as a security “state of emergency”.
The plan, which the president detailed in a speech yesterday, involves the creation of 500,000 vocational training schemes, additional subsidies for small companies, and measures to boost apprenticeships.
“We have to act so that growth becomes more robust and job creations become more abundant,” Hollande said in an address to unions and business leaders. “Our country has been facing structural unemployment for too long and it needs to reform.”
With 15 months before the presidential election, the sense of urgency is also political for the socialist leader, who has tied his decision to run for a second mandate on his ability to curb unemployment significantly this year.
The pro-business measures taken two years ago by the president, which include €40 billion (Dh160.26 billion) in tax breaks over three years for companies, moves to boost more flexible temporary job contracts and a plan to curb public spending, have yet to bear fruit.
Since 2012, when Hollande came to power, more than 600,000 people have joined the ranks of the unemployed, at a time when joblessness has decreased in most of the other large European economies.
With a jobless rate of more than 10 per cent of the workforce, France is above the 9.8 per cent EU average. The rate in the UK is 5.2 per cent and in Germany 4.2 per cent as of November 2015. Italy and Spain, which were hit more harshly than France by the financial crisis and the Eurozone debt crisis, have higher unemployment rates, but have lately been able to reduce them.
Despite recovering margins, companies are still hesitant to hire workers.