France’s Hollande warns of wave of layoffs after presidential vote
PARIS, April 28 — France's Socialist presidential frontrunner Francois Hollande said today he was expecting a wave of layoffs 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 May 6 runoff against President Nicolas Sarkozy, due largely to the conservative leader's failure to keep his promise to cut stubbornly high unemployment in the euro zone'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 May 6.”
The prospect of a Socialist winning control of France for the first time since Francois 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 euro zone 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 told the newspaper.
Debate likely to be tough
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 one million euros at 75 per cent and increase taxes on large corporations, particularly banks. He told the newspaper that he would press ahead with plans for a small one-off increase in France's minimum wage, 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 France's declining competitiveness versus 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, when Hollande beat him 28.6 per cent to 27.2.
National Front leader Marine Le Pen shocked France by finishing third with 18 per cent, the far-right party's best showing at a national election. Hollande has blamed Sarkozy's fiery anti-immigrant rhetoric for fostering the growth of the far-right, which flourished in high unemployment areas.
“The Left's real responsibility is not convincing ordinary voters – workers, employees, rural people, even the young – that it was useful to vote for us,” he told Le Parisien. “It is to these voters who feel down trodden, who have suffered a lot in the crisis, that I must appeal as a candidate and as president.”
Hollande warned that Sarkozy would be free to impose even tougher austerity measures, meaning higher taxes on consumers, if he won the 6 vote because he would not be seeking re-election after a second term.
With the tone of the campaign becoming increasingly bitter in recent days, as both Sarkozy and Hollande seek to appeal to far right voters, the Socialist said a head-to-head debate on Wednesday between the two men was likely to be tough.
“To judge by the tone and content of the campaign, the debate will be rough. I am ready,” he said. — Reuters