Villepin declares EUR 4.5 bn blitz against unemployment

8th June 2005, Comments 0 comments

PARIS, June 8 (AFP) - In his first major speech as France's prime minister, Dominique de Villepin put battling unemployment at the top of his government's priorities Wednesday in a bid to win back a disenchanted public that torpedoed President Jacques Chirac's drive for an EU constitution.

PARIS, June 8 (AFP) - In his first major speech as France's prime minister, Dominique de Villepin put battling unemployment at the top of his government's priorities Wednesday in a bid to win back a disenchanted public that torpedoed President Jacques Chirac's drive for an EU constitution.  

"All the energies of my government will be committed to this battle," he told parliament as he outlined his administration's strategy for the next two years, up to elections in 2007.  

Outlining a raft of measures that focused on simplifying hiring procedures for small- and medium-sized businesses and using a carrot-and-stick approach to bring the jobless into the workforce, Villepin portrayed the objective as a response to the dissatisfaction revealed by the French rejection of the EU charter in the May 29 referendum.  

"All of our country remains committed to the European project," said Villepin, who was named prime minister in a major government reshuffle Chirac called immediately after the failed referendum.  

"Don't interpret this vote as a signal of French isolation... The adventure has not stopped. Our European dream will emerge strengthened by these tests."  

Villepin said he saw the French rejection of the EU charter as having its roots in worries that the French could lose their cherished welfare system and labour protections to EU-wide reforms based on free market ideology.  

The country's citizens "know and say with force: globalisation is not an ideal, it cannot be our destiny," Villepin said.  

His country's chronic unemployment rate, which has hovered around 10 percent for Chirac's rule over the last decade and which currently stands at 10.2 percent, is "France's true plight," the prime minister said.  

To that end, he said EUR 4.5 billion (USD 5.5 billion) will be allocated to tackling the issue next year, although that will include the cost of cutting payroll taxes to boost hirings.  

"It is an important sum, to match the challenge," he said - adding that a promise Chirac made to cut income taxes will have to be suspended.  

He submitted the programme to a parliamentary vote of confidence following a debate. Given the dominance of Chirac's ruling UMP party, 363 deputies voted for the government, 178 against and four abstained.  

Opposition leader Francois Hollande of the Socialist Party said "France is in a state of defiance" and that Villepin had come "to look for the confidence that he won't find in the country."  

Villepin promised to facilitate hiring procedures for small companies by making labour contracts available on the Internet, by launching a new sort of contract with a two-year trial period and by cutting payroll taxes that add up to 50 percent to the cost of employing someone.  

Jobless people will be tempted to return to work with a EUR 1,000 (USD 1,230) bonus if they find a position, and threatened with sanctions if they turn down "reasonable" offers.  

At the same time, Villepin promised more housing, more child-care places and more spending on research and development to spur economic activity, and he said the process of privatising motorways and the state gas and electricity companies would continue.  

Public aid will be extended to French regions at risk of seeing major companies moving abroad to lower-cost countries, and withdrawn from those enterprises which do move.   Villepin said his government would press ahead with the reform of France's generous social security system, despite union opposition, and he called on Interior Minister Nicolas Sarkozy to crack down on illegal immigration.  

Later Wednesday the economy ministry announced an initial public offering of one-fifth of shares in France's state-owned Gaz de France (GDF) to begin on June 23, which could bring in some two billion euros to the cash-strapped government.  

Although privatisation provokes the ire of French unions, the new government earlier this week sold a little over six percent of France Telecom, raising an estimated EUR 3.4 billion, which will go for debt reduction.  

The 51-year-old prime minister, who was previously interior minister and before that foreign minister, will have to struggle against a recalcitrant public with little faith in the new government, however.  

A CSA survey published by the daily Le Parisien newspaper Wednesday showed that 65 percent of the French were pessimistic about the political situation over the next six months, and 79 percent did not believe Villepin's government would be up to the task of beating back joblessness within the next three months.  

Seventy-two percent of the 1,000 adults questioned earlier this week thought it certain or probable that massive strikes would occur in the coming months.  

Polls also show Chirac's popularity at an all-time low, with only between 24 and 26 percent of the public supporting him.

© AFP

Subject: French News

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