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ECONOMY

Boost for Macron as French unemployment drops to 15-year low

French President Emmanuel Macron received a boost on Tuesday with official figures showing unemployment fell to a 15-year low, as he seeks to push through a widely contested pension reform.

Published: 14 February 2023 16:25 CET
Boost for Macron as French unemployment drops to 15-year low
The stand of Pole Emploi, France's national employment agency, during a job fair in 2012 (Photo by PHILIPPE HUGUEN / AFP)

Statistics agency INSEE clocked unemployment at 7.2 percent in France in the last quarter of 2022, down to its lowest level since 2008. 

The rate in 2008 was the same as a previous low in 1983, leading Macron and some government ministers to claim that joblessness was at its lowest level in four decades.

“Unemployment is at its lowest level for the second time in 40 years,” the president wrote on Twitter. “Target full employment.”

Macron came to power in 2017 promising to reduce France’s chronically high jobless rate through a series of pro-business reforms, including loosening employment law and cutting taxes.

Unemployment at the time of his first election was 9.5 percent.

The centrist government is currently struggling to push through a major reform of the pension system in the face of massive demonstrations and strikes that have seen more than a million people hit the streets to protest on some days.

READ MORE: 5 minutes to understand . . . French pension reform

The changes would see the legal retirement age increase to 64 from 62 and would raise the number of years of social security contributions in order for workers to claim a full pension.

Trade unions have vowed to “bring France to a standstill” in rolling strikes from March 7 unless Macron withdraws the draft legislation which is widely unpopular.

Economist Mathieu Plane from the French Economic Observatory at Sciences Po university in Paris said the latest unemployment figures were a “slight positive surprise”.

Data from INSEE showed job creation was “relatively stable” in the last quarter of 2022 after seven consecutive quarters of growth.

Yves Jauneau, a labour market expert at INSEE, told AFP that the employment rate of people aged 15-64 was 68.3 percent in the last quarter of 2022, “its highest level since 1975”.

READ MORE: OPINION: An inflation ‘tsunami’ is about to hit France

The unemployment figure excludes Mayotte, a poverty-wracked Indian Ocean territory off the east coast of Africa, and the comparisons discount the fall in unemployment recorded during the Covid-19 pandemic when massive state aid guaranteed jobs nationwide.

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ECONOMY

French bosses fear far right’s vague economic plans

French business leaders have been pitched into fresh uncertainty by snap elections called by President Emmanuel Macron that risk strengthening the far right.

Published: 11 June 2024 12:39 CEST
French bosses fear far right's vague economic plans

Federations are treading lightly with their public comments, aware that they could be sitting across the table from National Rally (RN) ministers if the party scores a major breakthrough in the June 30 and July 7 ballots.

Local business group U2P would “respect the people’s choice, but the RN has to say more precisely what it proposes on questions with a tax, social and economic effect on small firms,” its chief Michel Picon told AFP.

At the last presidential election in 2022, the outfit had warned that RN chief Marine Le Pen’s manifesto promises “would have bad consequences for business,” he recalled.

At stake are issues such as returning to an official retirement age of 60 — raised to 64 in a wildly unpopular Macron reform last year — and a still harsher crackdown on immigration.

“What does this mean for people working for us today?” Picon asked.

“We’re business players who don’t get involved in politics,” said Thierry Cotillard, head of the Mousquetaires/Intermarche supermarket chain.

But “whoever the politicians are, we will fiercely defend our positions,” he warned.

‘Stick your neck out’

Centrist Macron’s time in office has been marked by reforms aimed at making life easier for businesses and high-profile courting of foreign investment.

By contrast, “we know nothing” about the RN’s plans, said the head of one major European industrial firm’s French subsidiary on condition of anonymity.

“We’ve just seen the beginnings of a reindustrialisation for 10 years, with supply-side policies bearing fruit. Will all that be kept up?” he asked.

Macron’s Finance Minister Bruno Le Maire on Tuesday urged business to “stick their neck out” against the far right.

Groups including the big companies’ federation MEDEF should “clearly say what they think of the different parties’ economic programmes” and warn about “the cost of Marine Le Pen’s Marxist plans”, he added.

Without naming any party, MEDEF told AFP in a statement that “a new campaign is starting in which we do not share certain political visions, which are incompatible with business competitiveness and prosperity for our country and fellow citizens”.

The CPME small-business group called for supply-side policy, greenhouse emissions reduction and welfare state reforms to continue.

It also warned about France’s staggering €3 trillion debt pile, which ratings agency Moody’s said Monday risked a downgrade due to the “potential political instability” from the upcoming election.

“Anyone taking on costly reforms without taking this element into account would be exposing France to a major risk,” the CPME said.

The head of a firm on France’s heavyweight CAC 40 stock market index, also speaking on condition of anonymity, said there was no reason to panic as the RN winning was “not a done deal”.

Even if they did, they said, “everyone wants to upend things, but once in power, being responsible for things will make you responsible.”

‘Low-carbon electricity essential’

One sector with particular fears for a far-right victory is renewable energy, which has already been waiting for months on a government roadmap stretching to 2035 and including items like sites for massive offshore wind parks.

“What’s going on is serious,” said Jules Nyssen, president of the Renewable Energies Union (SER).

“We’re in a state of total instability, just when we need legal guarantees and clarity,” he added, saying “it’s going to cost us heavily”.

“We have a clear roadmap that we need to eliminate carbon emissions,” said Nicolas de Warren, president of the UNIDEN association of big industrial energy users.

“What’s essential for us is access to low-carbon electricity at competitive prices, whether it’s nuclear or renewable”.

In 2022, Le Pen promised a fleet of around 20 new nuclear reactors — although her 2031 timetable for delivering half of those was seen as unrealistic.

But she is also a committed opponent of wind energy, vowing a moratorium on new construction and the gradual dismantling of existing parks — plans incompatible with France’s climate commitments.

“The laws of economics and energy will catch up” with the RN if it comes to power, one electricity provider said on condition of anonymity.

“We need more cheap energy. Building nuclear takes 10-15 years. What do we do while we wait? And how do we attract battery factories if we don’t want any more electric cars?” he added, citing another of Le Pen’s bugbears.

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