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French fourth qtr jobless rate declines in boost for Hollande Deal gets backing

PARIS, March 7, (Agencies): France’s unemployment rate fell to 10.2 percent in the fourth quarter, providing the first quarterly decline in two years and a boost for President Francois Hollande. The unemployment rate, measured according to the International Labour Organisation’s (ILO) criteria, was calculated under a new method that substantially modified the statistics. The third-quarter figure was revised downward to 10.3 percent from 10.9 percent previously, data from the INSEE statistics office showed on Thursday. That third quarter figure was the highest unemployment rate since 2007.

“All of these indicators point to one reality: unemployment remains high, but the situation stabilised in 2013,” Finance Minister Pierre Moscovici and Labour Minister Michel Sapin said in the statement. “The battle does not end here and it will have to be expanded to bring joblessness down in our country.” The data is a rare piece of upbeat news for Hollande, who has struggled with rising unemployment since his election in May 2012 and failed last year to start reversing the trend as he had pledged.

The Socialist government, which has invested heavily in subsidised job programmes for younger and older workers, hopes that a plan to slash payroll taxes in exchange for companies increasing their hiring will bring the rate down further. On Wednesday, employers and trade unions agreed to a blueprint for implementing Hollande’s plan, which aims to cut the cost of labour as part of efforts to restore companies’ waning competitiveness.
 
The European Commission said it was eager to see details of Hollande’s payroll tax scheme, lamenting the fact that France had so far made little progress on competitiveness. Some employers have warned that Hollande’s plan may not start to have an effect on the economy until the end of this year or early 2015.
 
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PARIS: French employers and trade unions agreed on Wednesday to a blueprint for implementing President Francois Hollande’s offer to cut payroll tax in exchange for companies committing to hiring targets. The agreement removes a major hurdle for Hollande’s plan to reduce the cost of labour as part of an effort to restore French companies’ waning competitiveness and feeble profit margins. The Socialist president, who is battling to bring down high unemployment, said in January he would phase out 30 billion euros ($41.23 billion) of payroll taxes in exchange for businesses committing to hiring targets.
 
The European Commission said on Wednesday it was eager to see details on Hollande’s payroll tax scheme, lamenting that France has so far made little progress reviving its competitiveness. Hollande charged employers and unions with working out the details on the targets, which they laid out in a framework agreement signed by employer groups and all but two of the main labour unions after a week of talks.
 
Under the agreement, employers and most trade unions stopped short of fixing numerical hiring targets and left it to counterparts in each professional sector to negotiate job creation deals. “We will do everything we can to ensure this agreement is translated into concrete acts, firstly at the sector level and then at the company level,” the negotiator for the Medef employers group, Jean-Francois Pilliard, told journalists. In a 6-page statement, Medef said each sector would set out objectives according to its economic needs. 
 
The automotive sector, which is reducing capacity, may focus on training while the expanding aeronautic sector may be able to formulate staffing needs more precisely, unions said. Medef chief Pierre Gattaz has said he would press employers to create a million jobs by 2017, which could translate into a drop of one percentage point in the unemployment rate, currently about 11 percent. But he has ruled out any legally-binding targets.

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