France's $2.2 billion plan to tackle unemployment
French President, Francois Hollande, unveiled a $2.2 billion plan to subsidize employment generation and provide skill training to 5,00,000 people. This is expected to curb an 18 year high unemployment rate of 10.7% with 3.5 million unemployed. However, critics have declared the move as more political than economic which is aimed at enabling Hollande to fight the next Presidential elections due in 2017.
According to the French labour ministry, the number of job seekers had declined by 15,000 or 0.4% in November 2015. This came as a relief because Oct 2015 registered the highest monthly increase in unemployment in two years. While the figures showed a 1.1% decline in youth unemployment rate, it made a 0.5% increase in unemployment rate for the above 50 age group.
French President Hollande announced a 'state of social and economic emergency' to redefine France's business model for enabling faster growth and reviving employment rates in the country. France's economy has almost stagnated with a mere 1% economic growth. France had earlier imposed an emergency post November 2015 terror attack and hiked spending on military and domestic security to prevent any such attacks in future.
The plan becomes important as President Hollande had earlier announced that he would not fight the next Presidential election if he fails to bring down unemployment in France.
The plan will provide a subsidy of €2000 to small and medium businesses who hire and retain a full-time employee for 6 months. Additionally, 5,00,000 unemployed would receive vocational training and 1,50,000 would be engaged in civic service programs. This would immediately remove 0.5-1 million people from a pool of 3.5 million unemployed people seeking jobs, significantly easing unemployment rates.
"Even if 5,00,000 people can get training, you need 5,00,000 jobs to hire them into. Otherwise it's back to the unemployment line the day after the program ends" - Éric Woerth, member of the opposition conservative Republican party.