France grapples with job conundrum By Christian Fraser

BBC News, Lyon Published duration 20 January 2012

media caption A plastic printing firm in Lyon has gone into liquidation in part because of French labour laws

It survived 140 years, two world wars and a depression. But today the giant machines of Veninov, a plastic printing factory in Lyon, stand idle.

The workshop floor, which covers six hectares (15 acres), is deserted and has been mothballed.

Yet for six months, since liquidation, Emmanuel Bouziat and 85 fellow workers have turned up every day to sweep, oil, maintain, and guard the plant.

They want to ensure it is in perfect working order - if and when a buyer is found.

"In 140 years this company employed thousands of workers," said printer Mr Bouziat. "It was alive. Now look at it. It's cold, it's quiet. It's all very sad.

"Our families don't really understand why we come here without pay. But we think there is a future for this factory if the government got involved.

"I blame the bosses who betrayed us, but I also hold President [Nicolas] Sarkozy responsible. For five years he has looked after himself and his supporters. The reforms he offers today are too little, and come far too late."

Mr Bouziat, 31, showed me the valuable printing cylinders that were used to design up to 15 million plastic tablecloths a year. There are hundreds and each is worth up to 5,000 euros (£4,000; $6,500).

The company had orders before it closed but is still struggling to find an investor - perhaps it is the high labour costs and bureaucracy for which France is now renowned?

Taxes rise

Mr Bouziat and his colleagues will receive a portion of their salary for the next two years from unemployment benefit.

But that bill is paid from payroll taxes of those in work, which in 10 years have become 20% more expensive than in neighbouring Germany.

Moreover there are now twice as many small and medium-sized companies (SME) across the Rhine in Germany. On average they employ twice as many people as the same sector in France.

Despite the loss of the precious AAA rating - and poll figures which hardly guarantee him a place in a second-round run-off - President Sarkozy is trying to remain upbeat.

image caption Mr Sarkozy's challenge is reining in spending without pressing "stop" on growth

On Thursday he was in Lyon making a speech to business leaders on jobs and the economy.

With unemployment fast becoming one of the central issues of the campaign, he has pledged 500m euros to try to help the country's rising number of jobless workers.

He is also proposing structural reforms to the labour market to try and entice investment and encourage the SME sector.

"This crisis should encourage us to take decisions quickly," he said.

"The situation demands it. We must be bold and cold-blooded."

But do the employers have an appetite for the reforms he is selling?

Philippe Magne is the chief executive of Arcad Software, a small company that exports its computer programmes to 33 different countries, including the UK.

He has 30 employees but is reluctant to take on more - for understandable reasons.

"I own a small business," he said. "In 2008 I had up to 62 employees. But because of the crisis we had to reduce our wage bill. The redundancy payments were so high it almost bankrupted the company.

"We need more flexibility for employers. When we lay people off in a small organisation like ours it's not because we want to cream off more profit, it's simply because we don't have the business.

"When we get new business we need the power to employ people quickly without fear that we can't afford to lay them off in a downturn. At the moment hiring people represents a significant risk."

In the region of Rhone Alpes there are now 400,000 people without jobs - a 5% rise in a year.

This mirrors the picture across the country.

Unemployment has now risen for seven consecutive months (according to the last figures published in November) and the rate now stands at a 12-year high.

'Not valued'

Mr Sarkozy is promising to introduce new laws that will make it easier to agree these short-term contracts. But civil engineer Eric Poyet, one of many over-50s searching for a job, remains unconvinced.

"I will be voting for Francois Hollande [the Socialist frontrunner]," he says.

"We don't feel valued any more.

"The current government isn't doing enough for people like me", he says - adding that he can find short-term contract work, but wants something better.

Critics say the reforms Mr Sarkozy is proposing are late and, coming at the 11th hour in the parliamentary calendar, can only be part of his re-election strategy.

Moreover France, like most other European countries, faces the twin conflicting imperatives of trying to find growth while lowering debt.