"France has addressed the crisis with sometimes obsolete employment policy tools," the Court of Auditors said in a new report, adding that despite reforms, the country's labour policies remain "largely inadequate in a context of persistently high unemployment".

In a scathing look at the state of France's labour market, the reports highlights a "particularly insufficient" effort to train jobless people,"mediocre results" in the area of assisted contracts - temporary jobs that are subsidised - and under-used potential in part-time work.

Ahead of promised reforms to the labour market - expected to be presented to the government in March following a January 11 agreement between managers and three unions - the auditing and policy advisory body made 25 recommendations to refocus policies worth 50 billion euros in 2010 to "the most vulnerable workers, those with little training or in insecure jobs."

The Court of Auditors also deemed the country's unemployment benefits "difficult to sustain" with a deficit of 18.6 billion euros projected by the end of the year.

More generous than elsewhere in Europe, France's unemployment benefit system has "played its role in maintaining income" but it is now seeing "its efficiency degraded, its fairness weakened", said the report.

The report condemned the compensation for casual workers, noting a billion-euro deficit for benefits that go to "just three percent of jobseekers".

It suggested lowering the highest levels of benefits and reviewing the compensation rules for reduced work activity, noting the "risk" that jobless benefits could be financing "a sustainable supplementary income for workers in insecure jobs".

One of the main initiatives in the employer-labour agreement was for reduced work hours during crisis, with workers to get access to some unemployment benefits.

Such a system helped maintain employment in Germany during the last downturn.

Changes to the unemployment benefits system are also set to be negotiated this year.

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