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Thursday, September 27, 2012 12:31 AM

French Unemployment Tops 3 Million, First Time Since 1999

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Given the disastrous mess in Southern Europe, compounded by the election of socialist Francois Hollande (together with his extremely foolish tax hike policies), France Set to Implode was a very easy call to make.

The evidence is strongly pointing in that direction. Please consider French unemployment tops 3 million as economy struggles

The number of unemployed people in France has topped 3 million for the first time since 1999, according to latest labour ministry figures.

Speaking before the data was officially announced, Labour Minister Michel Sapin said: "It's bad. It's clearly bad."

However, the government blamed the previous regime of Nicolas Sarkozy.

[Hollande] pledged to revive the eurozone's second largest economy, tackle rising unemployment, and reverse industrial decline. However his approval rating is now at its lowest since he assumed power, pollsters say.

Since May, major companies have announced thousands of layoffs, including carmaker Peugeot, drugmaker Sanofi, airline Air France-KLM, and retailer Carrefour.

Mathieu Plane, economist at the French Economic Observatory, told the Reuters news agency: "There are almost one million more unemployed people compared with early 2008 and we can't yet say that we have reached the peak."

The French economy has posted three consecutive quarters of zero growth, and forward-looking data suggests it may continue to flatline.

The 2013 budget, due to go before the cabinet on Friday, is expected to contain more than 30bn euros in budget savings, and fresh tax rises.

The government has forecast 0.3% growth for the year, and has so far kept its 2013 target at 1.2%, which many economists now consider unrealistic.

France's central bank this month predicted that the economy would contract by 0.1% in the third quarter after flatlining for the first half of the year.
Flatline? Please Be Serious

The idea that France is going to flatline is ridiculous. Growth estimates for next year are even more ridiculous.

Eurozone Unemployment Rates

With the rest of Europe slowing dramatically, do not expect German unemployment to buck the trend forever. Italy is in a steep downturn now, and France is going to follow suit.

Meanwhile, France, Spain, Greece, and Italy are busy hiking taxes which is economic insanity in a recession. They ought to be reforming work rules, but on that score there is little progress, with negative progress in France.

Mike "Mish" Shedlock
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