France’s presidential front-runner vows to combat new wave of lay-offs

FRANCE’S Socialist presidential front-runner Francois Hollande said yesterday he was expecting a wave of lay-offs to follow next weekend’s election, but pledged his government would not stand idly by as companies dismissed workers.

Hollande, 57, is on track to win the 6 May run-off against president Nicolas Sarkozy, due largely to the conservative leader’s failure to keep his promise to cut stubbornly high unemployment in the Eurozone’s second largest economy.

Sarkozy, who would become the first president to lose a re-election bid in more than 30 years, received a fresh blow on Thursday when the jobless rate hit its highest level since September 1999. Unemployment in France has not fallen below 7 per cent in 30 years.

Hollande said unions were already warning that companies were preparing a round of redundancies after the end of the presidential campaign, during which Sarkozy has done everything possible to avoid high-profile industrial closures.

“The unions are aware of this. Decisions are being prepared which have been postponed,” Hollande told Le Parisien newspaper in an interview. “It is not our victory which will trigger redundancy plans after 6 May.”

The prospect of a Socialist winning control of France for the first time since François Mitterrand left office in 1995 has irked some investors.

Hollande’s promise to renegotiate a German-inspired budget discipline pact to redress European governments’ finances had stirred fears of a return to the depths of the Eurozone crisis. But Hollande warned business leaders he would not stand by as they turned workers onto the streets.

“We must tell these companies that we will not accept this without reacting,” he said.

Large French companies seeking to cut their workforce are obliged by law to agree a plan with unions and the government, which often includes retraining or reallocation of some workers. If this plan is not approved by authorities, employees can contest their redundancies before a tribunal.

Hollande has already announced plans to tax income over ¤1 million at 75 per cent and increase taxes on large corporations, particularly banks. He added that he would press ahead with plans for a small one-off increase in the French minimum wage, currently one of the most generous in Europe.

“The size of the increase will have to be small given the economic situation, especially for many small businesses,” said Hollande, who proposes indexing the minimum wage not just to inflation but also to economic growth.

While Sarkozy blames declining French competitiveness – compared to its main trade partner Germany – on a steady rise in French wages since 2000, the Socialists say other factors are more decisive, such as technological innovation, the speed and flexibility of production processes and quality of goods.

Sarkozy, whose brash personal style has alienated many conservative voters, became the first incumbent to finish second in a presidential first round vote last week.