France to revamp business model, declares economic emergency

Pledging to redefine France’s business model and declaring “a state of economic and social emergency,” President Francois Hollande unveiled a 2-billion-euro ($2.2 billion) plan to reboot the economy to revive hiring and catch up with a fast-moving world economy.

Mr Hollande has proposed measures that are relatively modest. He clarified that his government would not “put into question” the 35-hour work week. France has been under a state of emergency since the terror attacks in November. However, Mr Hollande did not seek to assume any new emergency powers over the economy.

Addressing business leaders, Mr Hollande laid out plans for training half a million jobless workers. He stressed on the need for greater use of apprenticeships, and aid for companies that hire young workers. The French government has struggled to boost growth which has been stagnant for years or reduce chronic unemployment.  Unemployment rates have been hovering around 10 percent for years.

As France goes to presidential polls in 2017, Mr Hollande’s chances of winning a potential second term may hinge on whether job growth pick up before the elections. Mr Hollande stressed on the need to update France’s labour-friendly business model in an increasingly border-free, online economy. Some of the measures included a loosening of France’s rigid working time rules, and a bonus of 2,000 euros to small businesses that hire young people.

Mr Hollande spoke about the need to integrate youth from France’s troubled suburbs, including minorities who face job discrimination, into the global economy. High rates of unemployment in France’s North African and African communities is seen as one of the factors driving some youths to violent extremism or the drug trade.

The government will present some measures to parliament in the next few days that will be included in draft economic reform laws. France is the second largest economy in the European Union, after Germany and the UK. Any significant damage to France’s economy would add to the economic woes of the region.