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Hollande announces "new stage" to fix economic troubles

English.news.cn   2014-01-15 05:45:26

by Ounissi Sonia

PARIS, Jan. 14 (Xinhua) -- Already on hot seat on failure to revive France's economy, French President Francois Hollande on Tuesday raised the curtain on his new roadmap to "regain economic strength," mainly based on spending cut and incentives to create more posts in the 66 million population.

"There must be a new stage. It 's not to change the course, but to go faster and further. I have a conviction that if France wants to keep its influence in the world and if it wants to maintain control of its destiny, it must regain its economic strength," Hollande said.

"That is why I proposed the responsibility pact whose principle is simple: reduce business costs and in return allow more jobs creation and offer more social dialogue," he detailed during a press conference.

As he pledged to continue efforts to trim labor costs, Hollande announced the end of tax on employers that subsidize families by 2017 which will contribute to trim labor costs by 30 billion euros (41 billion U.S. dollars).

In order to encourage firms to open their doors to people without work, the president also proposed more simplified administrative procedures and to eliminate several taxes "to spur investment and employment."

"This pact is a great social compromise. It's a chance and everyone must grasp... Everyone has to take his responsibility. There is no time to waste," Hollande stressed.

Furthermore, he said to cut public expenditure by additional 50 billion euros by 2017, according to him crucial to trim the budget gap and lower taxes.

To Marc Touati, director of ACDEFI financial analysis bureau, the second main power in the eurozone is "on the eve of a difficult future," despite Hollande's measures.

"Hollande did not present concrete guarantees on spending cut and growth bounce which I think it won't be in the rendez-vous this year and so the unemployment won't decrease," Touati told the news channel BFMTV.

The Socialist head of state had earlier set himself a one-year deadline to reverse the rise in unemployment via "jobs of the future" plan with state subsidies that is designed to contribute in recruiting poorly-qualified young workers from disadvantaged suburbs and rural areas mainly in the public sector.

However, a 0.5 percent rise in French monthly job claims at the end of November with an expected slight rise in the gross domestic product likely to take the wind out of his sails.

In a further sign of worsening prospects, the national statistics institute Insee estimates French growth will be too weak to absorb the millions of jobseekers, predicting the joblessness at 11 percent in mid 2014.

In a statement, French far-right National Front (FN) leader Marine Le Pen said Hollande "deluded himself with his... pact of responsibility."

"Business conditions will not improve as long as the growth is not there and so we have 5 million unemployed. We must change the economic model to restart the machine," she added.

In the left camp, Jean-Luc Melenchon, who co-chair the Left Party, denounced "a program of right wing" urging the Leftists to walk on the streets to oppose the Socialists' new proposals to inject new blood in the dim economy. (1 euro = 1.368 U.S. dollar)

Editor: Mu Xuequan
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