French Unemployment Hits 12-Year High (It's Going to Get Much Worse); Sarkozy Outlines Jobs Plan (Mathematically It Can't Work); Olli Rehn to Give Keynote Speech at Eurobond Seminar

The EU Observer reports France to hold jobs summit as unemployment hits 12-year high

A sharp rise in France's unemployment figures is putting pressure on President Nicolas Sarkozy to deliver, with over half the French population wanting the candidates for the spring presidential election to focus their energies on maintaining jobs.

Figures released by the labour ministry this week show that the number of those unemployed hit 2.85 million in November, a 12-year high and the seventh consecutive monthly increase.

The numbers have sparked a debate in France about the nature and future of employment with Sarkozy convening a jobs summit on 18 January.

Unemployment as an issue is a number-one priority on French voters' minds. According to a poll in La Croix newspaper, 52 percent of French people want the candidates for the April presidential elections to focus on responses that "maintain employment."

Of the main candidates in the running, socialist contender Francois Hollande is seen as proposing the best solutions to the daily problems of French citizens by 24 percent of those polled. Sarkozy comes in second with 20 percent and far-right politician Marine Le Pen in third place (16%).

While all candidates will focus on combatting unemployment and there are set to be many proposals for economic growth, their hands will be tied by France's commitment to reduce its high budget deficit, as part of an overall plan to contain the eurozone debt crisis.

Sarkozy Outlines Jobs Plan Based on German Program (Mathematically It Can't Work)

The Wall Street Journal Reports Sarkozy Outlines Jobs Plan

Largely inspired by measures Germany relied on to navigate the 2009 economic recession, [Sarkozy's] draft plan calls for companies to retain all staff even if they are faced with a slump in orders, and for workers to accept lower pay. As an incentive and to help pay for the move, the government would kick in for some of the lost wages and social-security contributions, according to officials at the French Labor Ministry and union leaders who were briefed on the proposed pact.

Mr. Sarkozy intends to discuss both the job-saving scheme, and the flexibility idea at a meeting with labor and employer unions on Jan. 18. By then, the government must answer a key question: how to finance measures that officials say could cost more than €1 billion ($1.3 billion) next year.

Five months ahead of presidential elections, Mr. Sarkozy is already fighting on multiple fronts to reduce the budget deficit, preserve the country's triple-A debt rating and find a comprehensive solution to the protracted euro-zone debt crisis.

The unemployment rate—which rose to 9.7% of the active population in the third quarter—is the latest bad news on France's economic dashboard. The country's trade deficit is projected to widen to an all-time high of €75 billion this year, and the national statistics office, Insee, has forecast that the economy will likely contract in the current quarter and the first quarter of next year.

In France, the measure is likely to gather support from trade unions as long as the government commits to compensate pay cuts. "We're on board as long as the government puts some money on the table," said Jean-Claude Mailly, the head of Force Ouvrière, France's third-largest union.

The French government's idea to increase work-time and pay flexibility is likely to meet much more resistance.

"All labor unions will say 'No,' because that would amount to making workers pay for the economic downturn," said Mourad Rabhi, a leader at CGT, France's second-largest union. "And in France there isn't the same climate of mutual confidence between workers and companies, as in Germany."

Mathematically It Can't Work

The unions will agree to pay cuts as long as there are no pay cuts (government kicks in the rest). Moreover the unions will not agree to increase work-time and pay flexibility because "that would amount to making workers pay for the economic downturn"

Heaven forbid. Meanwhile, Sarkozy needs to trim the deficit, not increase it, and his proposal does the opposite.

Note that Hollande is widely predicted to beat Sarkozy in an election runoff, and Hollande is running on a platform to make changes to the agreement reached between Sarkozy and German Chancellor Angela Merkel.

Expect European Unemployment to Get Much Worse

Europe is already in a nasty recession. Austerity measures coupled with tax hikes in numerous countries but especially Italy, France, Spain, Portugal, and Greece will make matters much worse.

"United States of Europe" Author Hosts Eurobonds Seminar

The galling arrogance of Eurocrats is rather stunning. While reading the EU Observer article at the top, this Ad for a Eurobonds Seminar on January 10, 2011 popped up.



Olli Rehn is Vice President of the European Commission. Guy Verhofstadt MEP is the Leader of the Alliance of Liberals and Democrats for Europe and author of the book United States of Europe (2006), the New Age of Empires (2008) and How Europe can Save the World (2009).


Tireless, Dangerous Demagogues

Rehn and Verhofstadt are tireless, socialist fools as well as dangerous demagogues dedicated to the destruction of sovereign rights of every nation in the EMU. They ought to scare the bejeebies out of any sane person who is not in favor of a European Nanny-Zone.

Their brainwashing event, marketed as a seminar on eurobonds is already filled up.

The primary thing stopping these socialists and their nanny-zone ideal is the German supreme court.

This past Wednesday, German Constitutional Court Judge Udo Di Fabio said in a Spiegel interview "It's a Mistake To Pursue a United States of Europe".

Please note that Di Fabio sees Euro-bonds as illegal.

However, the judge proved his naiveté with his statement "no politician really intends to transfer their power of disposition over the substance of the national budget at an EU level".

On the contrary, the European Parliament is loaded with nanny-zone proponents who are conducting seminars on how to do just that.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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