The incredibly inept policies of French president Francois Hollande are back in the news.



Hollande is following up on his proposal to not let companies fire workers, starting right now with French car maker Peugeot's Plan to Cut 8,000 Jobs, Close Plant



An article in El Pais has better details of Hollande's denial of reality than I have found elsewhere.



My friend Bran who lives in Spain offers this translation key paragraphs of Hollande's "Moralization" of Political Life.



Hollande says "Peugeot's plan is unacceptable and will be renegotiated."



Hollande accused Peugeot owners of having delayed the restructuring plan with the excuse of not interfering in the election campaign and denied that the biggest problem are labor costs, as claimed.



"There is also a strategy, a market and some shareholders who have distributed a dividends rather than reinvest them," he said.



The solution? "Have an independent expert examine the company, find a way out of the plan to close the plants, and create a strategic plan for the automotive industry and encourage the purchase of French products in France."

PSA Peugeot Citroen (UG) bond-insurance costs surged to a record, trading as if the French automaker has a 51 percent chance of defaulting as it cuts thousands of jobs and closes a plant.



Credit-default swaps on the carmaker’s debt jumped 50 basis points to an all-time high of 800 basis points at 4:30 p.m. in London, Bloomberg swaps prices show. The contracts have doubled since March and now signal a 51 percent probability of default within five years. Caroline Brugier-Corbiere, a spokeswoman for Peugeot, declined to comment.



Peugeot’s cash reserves allow it to “survive for one to two years,” said Xavier Caroen, a Zurich-based Kepler Capital Markets analyst who has a “hold” rating on the company. “We hope the French government lets them cut production and shut some sites in France, or they won’t have any earnings in the future,” Caroen said.

François Hollande, France’s Socialist president, has accused Peugeot’s chief executive of ducking the blame for the crisis at the French carmaker, ratcheting up the pressure ahead of meetings this week about its plan to lay off 6,500 workers.



Philippe Varin, the Peugeot chief, says the hefty social charges imposed on French employers are putting an impossible burden on his company as it tries to compete globally, calling on the new Socialist administration to make a “massive” cut to the charges.



“It’s too easy to blame labour costs,” he said. “There were bad strategic choices. There were delays in taking difficult decisions and shareholders who were too hungry for dividends when investment should have been the priority.”

Mass layoffs will occur before the law passes. Companies will move any jobs they can overseas. Ongoing, if it's difficult to fire people, companies will not hire them in the first place. Corporate profits will collapse along with the stock market should the need to fire people arise.