France's deeply unpopular President Francois Hollande appears to have found inspiration from his hero Francois Mitterrand, announcing an abrupt pro-business lurch in tax policy that echoes moves by his Socialist predecessor 30 years ago, reports Reuters.
Desperate to revive the euro zone's second-biggest economy in the face of near record unemployment, Hollande said in his new year's address he would cut companies' labor cost in exchange for firms hiring more workers.
Hollande, who polls show has become the least popular French president in modern history, called the measures a "responsibility pact".
Business leaders have cautiously welcomed the prospect of cuts to labor cost that they say make it harder to add jobs in France than elsewhere in Europe. Unions and Hollande's leftwing allies in parliament have expressed reservations.
Hollande's move is a nod to Mitterrand, who two years into his own presidency, with the French economy and his personal popularity cratering, announced a turn towards pro-business policies more commonly associated with the right than the left.
Hollande's admiration for Mitterrand runs deep: he has been known to take inspiration not only from his Mitterrand's policies, but even his turns of phrase.
The detail of his new proposal has yet to be announced, and the political consequences sound severe. Giving a tax cut to companies means either raising taxes on individuals, cutting back state spending on benefits, or both - all likely to be unpopular with voters who elected him in May 2012.
But with his approval ratings having fallen so far already, Hollande may have little left to lose. Municipal elections loom in March with the Socialists expected to take big losses.
"The political cost has already been paid. It's a matter of emergency now," said Deutsche Bank economist Gilles Moec.
Shifting more of the burden of financing welfare to households would weigh on consumer demand, the traditional motor of French growth, but that would be a necessary price to pay to rebuild French firms' competitiveness, he added.
Read more of this report from Reuters.