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Firms urge Hollande to act on New Year pledge

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Firms urge Hollande to act on New Year pledge
Hollande wants businesses to recruit and in return he will ease the burden of labour costs. Photo: Pascal Guyot/APF
11:05 CET+01:00
Business leaders in France have called on French President François Hollande to act quickly on his New Year pledge to lower burdensome labour costs in return for firms stepping up their recruitment drive. "He must move quickly," says the head of the leading business union.

If 2013 was the year of the “great battle for jobs”, as Hollande dubbed it, then in 2014 the war looks set to continue.

In his New Year’s address this week French President François Hollande issued his usual battle cry to tackle unemployment.

After failing to reduce unemployment by the end of the year as he had famously promised, Hollande offered to make another pact, this time with businesses.

If firms boosted recruitment, the president would look at ways to reduce labour costs, which are notoriously high in France compared to the rest of Europe and which have long been a source of anger for business leaders.

“We need to mobilise everyone to win the battle [against unemployment]," Hollande said, in a now familiar rallying call. "That is why I am proposing a responsibility pact for corporations. It is founded on a simple principle: fewer labour taxes on business, fewer restrictions on corporate activities [in exchange for] more recruitment and greater dialogue with trade unions."

After unemployment fell slightly in October, figures for November showed it had risen by 0.5 percent, meaning the jobless rate remains around 10.5 percent in France.

As French daily Le Figaro points out, the proposal, has strong echoes of a similar plan put forward late last year by business union Medef, which aimed to create one million jobs in five years, on the provision that taxes and public spending were reduced.

However no new reforms are currently in the pipeline to reduce labour costs for businesses and in his New Year’s address he did not specify how he plans to reduce labour charges.

However in October the government did ask the High Council for the Financing of Social Security to look into ways to lower taxes on labour. Their report is not due until May.

Medef, which represents businesses in France remains cautious of Hollande’s promise.

In a statement released after Hollande’s speech Medef said it was “ready to engage with the president of the Republic" but urged him to act quickly.

President of Medef Pierre Gattaz said: “The French economy can recover and job creation in our country can start. However we must begin the necessary reforms without delay. Medef is willing to participate and be actively involved in building a concrete pact announced by the president. But he must move quickly because we are in a crisis.”

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