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"Shock therapy" urged for French economy by employer group.

BANKING AND CREDIT NEWS-September 25, 2014-"Shock therapy" urged for French economy by employer group


Medef, a French employer group, announced on Wednesday that it has asked the government to scrap the 35-hour work week, raise the legal retirement age and reduce the minimum wage in an effort to bring down high unemployment and stimulate growth, Reuters reported on the same day.

The French employer group said that its proposals would help the second largest economy in Europe create one million jobs over the next five years. Currently the French unemployment rate is above 10% with almost 3.5 million job seekers registered in August 2014. Unions reacted strongly against the proposals earlier this month when some where leaked to the media.

French president Francois Hollande has brought in some measures which are intended to stimulate hiring, including offering EUR40bn of payroll tax cuts to companies, easing of hire-and-fire rules and job training reforms, although these measures have yet to yield clear results and unemployment has continued to rise.

The lacklustre economic recovery in France, which is behind other similar euro zone countries, is said to have caused France to miss targets to reduce its public deficit and has increased pressure on Hollande to reform harder and faster. Hollande's government is expected to being in a new law which will loosen rules which limit competition in regulated professional sectors and has flagged a move to ease rules on thresholds for worker representation, which companies claim has put a break on hiring.

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Publication:M2 Banking & Credit News (BCN)
Date:Sep 25, 2014
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