French President François Hollande’s promise to create jobs by the end of the year is turning into his Achilles' heel, reports Bloomberg.
Jobless claims rose last month to a 15-year high at 3.17 million, the labour ministry said yesterday. The increase brings such claims close to the country’s historic peak in January 1997 -- when they stood at 3.21 million -- with no signs they’ll fall any time soon.
While the socialist president is falling behind on nearly every economic pledge he’s made for 2013 - from growth to shrinking the budget deficit - nothing is heaping more criticism on him, especially from his own supporters, than his inability to spur job creation as he promised.
“Hollande’s ministers have drummed up his jobs promise over and over again,” said Mathieu Plane, an economist at research institute OFCE. “It would have been better to have said that 2013 will be a year of sacrifices, with no expectations for the labor market. But they’ve painted themselves into a corner.”
Unions plan a nationwide demonstration on March 5 to protest job cuts and the government’s inability to address them, Bernard Thibault, the head of the Confédération Générale du Travail, or CGT, one of the country’s biggest unions, said on France Info radio yesterday.
“A credible reversal in the labor market in 2013 will need other policy options,” Thibault said. “The question is no longer whether unemployment will shrink this year, but how high it’ll be.”
Since Hollande’s May election, companies from PSA Peugeot Citroen and Air France to Sanofi SA have announced thousands of job cuts. The president’s own state-backed “Jobs for the Future” youth-employment program has created only 8,000 posts so far, against the 100,000 planned for the year.
France’s unemployment rate stands at 10.3 percent, the highest in 13 years. Youth employment is almost double the national rate.
For OFCE’s Plane, the youth-jobs program is a measure that at best can “limit the pain.”
“There should be a minimum of 1.5 percent economic growth to reverse the unemployment trend and we’re very far from that,” he said.
The European Commission forecast last week that the French economy will expand 0.1 percent this year, far short of the government’s 0.8 percent goal. The Commission said it expect France’s unemployment to rise to 10.7 percent.
Hollande will also fail to keep his pledge to cap the budget deficit at 3 percent of gross domestic product, according to the EU commission, which estimates it’ll be closer to 3.7 percent. France plans to revise its targets between March and April.
Read more of this report from Bloomberg.