The EU Observer reports France to hold jobs summit as unemployment hits 12-year high



A sharp rise in France's unemployment figures is putting pressure on President Nicolas Sarkozy to deliver, with over half the French population wanting the candidates for the spring presidential election to focus their energies on maintaining jobs.



Figures released by the labour ministry this week show that the number of those unemployed hit 2.85 million in November, a 12-year high and the seventh consecutive monthly increase.



The numbers have sparked a debate in France about the nature and future of employment with Sarkozy convening a jobs summit on 18 January.



Unemployment as an issue is a number-one priority on French voters' minds. According to a poll in La Croix newspaper, 52 percent of French people want the candidates for the April presidential elections to focus on responses that "maintain employment."



Of the main candidates in the running, socialist contender Francois Hollande is seen as proposing the best solutions to the daily problems of French citizens by 24 percent of those polled. Sarkozy comes in second with 20 percent and far-right politician Marine Le Pen in third place (16%).



While all candidates will focus on combatting unemployment and there are set to be many proposals for economic growth, their hands will be tied by France's commitment to reduce its high budget deficit, as part of an overall plan to contain the eurozone debt crisis.

Largely inspired by measures Germany relied on to navigate the 2009 economic recession, [Sarkozy's] draft plan calls for companies to retain all staff even if they are faced with a slump in orders, and for workers to accept lower pay. As an incentive and to help pay for the move, the government would kick in for some of the lost wages and social-security contributions, according to officials at the French Labor Ministry and union leaders who were briefed on the proposed pact.



Mr. Sarkozy intends to discuss both the job-saving scheme, and the flexibility idea at a meeting with labor and employer unions on Jan. 18. By then, the government must answer a key question: how to finance measures that officials say could cost more than €1 billion ($1.3 billion) next year.



Five months ahead of presidential elections, Mr. Sarkozy is already fighting on multiple fronts to reduce the budget deficit, preserve the country's triple-A debt rating and find a comprehensive solution to the protracted euro-zone debt crisis.



The unemployment rate—which rose to 9.7% of the active population in the third quarter—is the latest bad news on France's economic dashboard. The country's trade deficit is projected to widen to an all-time high of €75 billion this year, and the national statistics office, Insee, has forecast that the economy will likely contract in the current quarter and the first quarter of next year.



In France, the measure is likely to gather support from trade unions as long as the government commits to compensate pay cuts. "We're on board as long as the government puts some money on the table," said Jean-Claude Mailly, the head of Force Ouvrière, France's third-largest union.



The French government's idea to increase work-time and pay flexibility is likely to meet much more resistance.



"All labor unions will say 'No,' because that would amount to making workers pay for the economic downturn," said Mourad Rabhi, a leader at CGT, France's second-largest union. "And in France there isn't the same climate of mutual confidence between workers and companies, as in Germany."

"no politician really intends to transfer their power of disposition over the substance of the national budget at an EU level".