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France, Labour market reform, unemployment

Sarko dances to tune of Standard and Poor’s

It was meant to sound tough on business and the banks, friendly to the struggling, man on the street. But despite Nicolas Sarkozy’s talk on TV Sunday of protecting employment and French industry, the President’s plan to get him re-elected this Spring appeared largely a smoke screen for the same old policies that favour the 1%, and hurt the 99%. Or rather, the 85%, as Jean-Luc Mélenchon, leader of the Left Front has put it.

Some of the headline measures were a financial transaction tax on the banks*, forcing large companies to take on interns, a one billion euro investment fund and a major house building programme. But there will also be a rise in value added tax (a tax on sales), to 21.2% from 19.6%, designed to cover the cost of  a cut in national insurance-type charges on companies, which will see their spend on labour fall by Euros 13 billion. Companies will also be given new ‘freedoms’  to negotiate ‘flexible’ working hours and pay levels with unions that will further erode France’s statutory 35-hour working week.

For Mélenchon, it was a case of ‘obeying Standard and Poor’s’, the international credit rating agency that has been at the centre of the sovereign debt crisis and an endless string of self-defeating austerity and privatisation programmes across the EU.

The French President’s third austerity plan ‘will be paid for by 85% of households. Capital will may six times less. Indeed, they won’t pay anything at all. For the measures that hit the people will be applied immediately, while those that affect capital will be introduced after the election,’ Mélenchon stated, referring to the August date set for the introduction of the financial transaction tax. The Presidential election is on 22 April, with the run-off May 6.

Mélenchon further argued that longer hours wouldn’t be negotiated but simply imposed on workers.

For the communist leader Marie-George Buffet, Sarkozy ‘always serves the same dishes: belt tightening for workers, gifts for the bosses’. She attacked the valued added tax rise and said that by undermining the right to the 35 hour week workers would be ‘forced to choose between their job or their wages; or work more or earn less. This is unfair and ineffective.’

Nathalie Arthaud, candidate for President for Lutte Ouvriere, predicted Sarkozy – widely expected to stand again although he hasn’t announced it officially – wouldn’t be at the Elsyée Palace much longer. She said: ‘The President of the rich has done everything to serve his class right up to the last Euro. As for the workers, we will have to respond as we must, in the streets, in the factories, through struggle, to foil this new offensive in the interests of the bosses.’

Sarkozy, facing a collapse in manufacturing amid an accelerating jobs crisis, claims that his measures simply emulating the model in the Continent’s most successful economy, where wages have been kept down through more local bargaining.

But Martine Aubry, first secretary of the Socialists and architect of the the 35-hour week that was introduced in 2000 when she was labour minister, was dismissive: ‘Genuine competitiveness, even if you look at Germany, is not achieved by reducing labour costs….this is an economic error and socially, profoundly unjust.’

She added: ‘Sarkozy started his term helping the privileged, through tax rebates, and finished it by making the middle and popular classes pay [more tax].’

Did you know?

France has the third-highest number of millionaires in the world, behind the US and Japan, according to Crédit Suisse Global Wealth Report. The bank says there are 2.2 million in France, representing nine per cent of the world total.

*Read the British TUC’s comment on this proposal

About revoltingeurope

Writer on Europe's Left, trade union and social movements @tomgilltweets or @revoltingeurope

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