With a national election 15 months away and unemployment not falling, a crisis in France emerged: French president Francois Hollande's own job is at risk.
Having promised to step down as president if unemployment in France fails to drop this year, Hollande took the necessary action.
He declared a state of emergency to save jobs, namely his.
Hollande Declares State of Emergency
Please consider Hollande Outlines Jobs Plan to Tackle Economic 'Emergency'
François Hollande has returned to traditional leftwing tenets for a last-ditch plan to cut persistently high unemployment and salvage his chances of re-election next year, saying France is in an economic “state of emergency”.Training Schemes
The measures, which the president detailed in a speech on Monday, involve the creation of 500,000 vocational training schemes, additional subsidies for small companies and a programme to boost apprenticeships.
“We have to act so that growth becomes more robust and job creation more abundant,” Mr Hollande said in an address to unions and business leaders.
Since 2012, when Mr Hollande came to power, more than 600,000 people have joined the ranks of the unemployed at a time when joblessness has decreased in most of the other large European economies. Despite recovering margins, companies are still hesitant to hire workers.
Under Monday’s announcement, which takes effect immediately, companies with fewer than 250 workers will receive a €2,000 payout for hiring youths and unemployed people on low salaries for contracts lasting more than six months. Temporary tax breaks, announced in 2014, will become permanent, Mr Hollande said.
A package of liberalising reforms passed in parliament last year, spearheaded by Emmanuel Macron, the reformist economy minister, has not spurred employment significantly. Doubts are mounting over Mr Macron’s ability to push through additional reforms this year.
Nicolas Lecaussin, head of Institute for Research in Economic and Fiscal Issues, a liberal think-tank, described the new measures as “old recipes”. Mr Lecaussin added: “Training schemes are controlled by unions and efforts to boost apprenticeships have failed repeatedly over the years. As always when presidential elections loom, we’re entering a phase of public spending increases.”
How to Create Jobs
The primary reason French companies will not hire workers is that it's so damn hard to get rid of them later if they do.
Add to that mountains of regulations including inane laws that tell businesses when they can or cannot open the doors.
If Hollande wants to create jobs, this is what he needs to do.
- Make it easier for businesses to fire workers.
- Let any business that wants to do so, open the doors on Sunday.
- Reduce unemployment benefits.
- Get rid of countless regulations telling businesses what they can and cannot do.
- Get rid of tariffs and subsidies.
- Cut taxes, both corporate and personal. Become a pro-business country.
Points number one and two would be a good start. But even if Hollande stopped with those two points, the socialists would fire him.
Hollande's proposals prove he is not really interested in doing what it takes to create jobs. Rather, he only wants to do what is necessary to save his.
Mike "Mish" Shedlock