French President Francois Hollande Saturday kicks off a summit with business leaders aimed at creating half a million vitally-needed jobs in return for lower taxes, but a labour row threatens to mar the event.
The two-day conference aims to tackle record unemployment of 3.38 million people, a key factor behind humiliating election defeats for the Socialists this year.
Hollande’s government has pledged to cut state spending between 2015-2017 to finance a package of payroll and income tax cuts designed to bolster demand, make companies more competitive and attract investment.
The centrepiece of the strategy is a so-called Responsibility Pact, offering businesses 40 billion euros ($54 billion) worth of cuts in taxes and social charges, in exchange for a pledge to create some 500,000 jobs.
But unions have threatened a boycott of the round table talks on job creation, accusing the government of failing to make employers keep their end of the bargain.
They are particularly incensed by Prime Minister Manuel Valls delaying a promise of early retirement for people in physically-tough jobs following pressure from Medef, the main employers’ union.
Under the new system, people engaged in demanding jobs- working nights, exposed to loud noise or heavy loads or performing repetitive tasks-would gain extra job training or early retirement as compensation.
The so-called “hardship accounts” were supposed to come into force in January 2015 but have now been delayed by a year.
Trade unions described the government backdown on the issue as a “breakdown in labour dialogue.”
More broadly, union leaders say talks on the hiring targets have failed to make real progress.
On Sunday, five senior members of the Socialist party urged Hollande to hold employers accountable, saying that Pierre Gattaz, the head of Medef, was “harassing the government.”
