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UNEMPLOYMENT FRANCE

French unemployment rate hits new record

The French President François Hollande could not keep his famous promise. New figures released on Monday showed that France has set a new record for the number of unemployed which now stands at 3.3 million.

French unemployment rate hits new record
The jobless rate in France continues to rise, with a new record set in December. Photo: AFP

France revealed on Monday that the number of registered jobless rose to a record 3.3 million in December, belying President Francois Hollande's pledge to reverse the trend by the end of last year.

The number of job-seekers rose by 10,200, the labour ministry said. If those holding part-time employment were taken into account the number of unemployed rose to 4.89 million, another record.

A slight fall in the number of unemployed for October had raised government hopes that France may have finally turned a corner in its years-long jobs crisis.

Hollande, a Socialist who is under fierce pressure to tackle unemployment and with polls showing his approval ratings the lowest of any president in modern French history, claimed in November he had met his electoral pledge to halt the rise in joblessness by the end of 2013.

Despite the bleak figures, Hollande – who is currently in Turkey – said that unemployment had "stabilized" but added that "this is not enough."

The labour ministry said the average quarterly rise in unemployment had fallen from 33,000 at the start of last year to 2,500 at the end of 2013.

"The inversion of the unemployment curve for all age groups has not been achieved in the last quarter although we were very close to that," the ministry said.

The ministry said the number of unemployed youths aged under 25 had steadily fallen over eight months. Jobless figures of those aged between 25 and 50 had also stated falling in the last quarter but this was not the case for those aged 50 and above.

After the figures were announced, Prime Minister Jean-Marc Ayrault stressed the need to move "further, faster and more strongly" to fight unemployment.

"The unemployment figures bear proof that there has been a clear reduction in joblessness among the youth" but added that more efforts would have to be made to cover other age groups.

The new figures came as the government opened talks to flesh out a "Responsibility Pact" proposed by Hollande that would offer businesses tax cuts in return for more jobs.

Hollande said there would be €30 billion ($41 billion) in cuts to payroll taxes and further efforts to balance public finances with €50 billion in spending cuts over three years to kickstart growth and revitalize the eurozone's second economy.

There have been few details on how the government would pay for lowering taxes and which spending would be cut, and officials insisted France would meet its EU obligations to reduce its public deficit.

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UNEMPLOYMENT FRANCE

Has France really seen a record fall in unemployment?

France’s beleaguered Socialist government were celebrating the biggest drop in the jobless rate since the year 2000, but is it really reason to rejoice?

Has France really seen a record fall in unemployment?
Photo: AFP

The figures, which took most people by surprise in France, revealed that the month of March saw the number of unemployed drop in France by a huge 60,000.

To put it in context that’s the biggest recorded drop for 16 years.

The government were quick to celebrate the figures released by the Ministry of Labour.

“This is good news for France,” said spokesperson Stephane Le Foll, a key ally of President François Hollande, whose chances of re-election hinge on whether there is a major drop in unemployment before next year’s elections.

Le Foll said the government would continue to do more in the coming months to get unemployment down and boost Hollande’s chances at the polls.

But most economic experts in France and indeed Hollande’s enemies on the right, as you would expect, say it’s far too early to start popping any champagne corks.

Many point out that the figures are unreliable from month to month and it’s far better to look at the jobless rate over a whole year.

“A fall of this size is encouraging but needs to be confirmed,” economist Bruno Ducoudré told L’Obs website.

The figures also only applied to category A of France’s “chomeurs”, which is essentially those actively seeking full time work.

The number of jobseekers in other categories, such as those who have a few hours of paid work but seek more, or those not actively seeking work, perhaps because they are in training or sick, actually rose.

But most economists accept that Hollande’s economic policies combined with a slight improvement in the economic outlook for the country has had an effect, albeit menial, on unemployment.

Policies such as cutting payroll charges for employers and offering bonuses to companies who hire new staff on permanent contracts or temporary contracts of at least six months, is helping people into jobs, experts say.

But the president and the country still face an uphill task.

“Even if unemployment falls in 2016, it will take several years of growth and falling unemployment to erase the scars of the economic crisis and give people the impression that the situation has really improved,” said Ducoudré.

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