France still has the second largest economy within the Eurozone, but it has struggled in the aftermath of the Global Financial Crisis. Anger at austerity measures swept President Sarkozy from power, but the promises made by his successor, Francois Hollande, have proved difficult to implement and he is having to take unpopular measures designed to free-up the labour market in a bid to boost stubbornly intractably unemployment.
The long-term average unemployment figure for France is relatively high at 9.22% (between 1996 and 2015) with a range of 7.1 to 10.7% and currently stands at 10.3%. The French cherish the concept of a 35 hour working week and enjoy significant protection measures for workers in employment. Inflexibility in the workforce has been blamed for hampering the recovery and economic growth – most of the protections were brought in under socialist administrations. It is therefore not a little ironic that it is the socialist administration of Francois Hollande that has used executive authority to push through reforms without having them debated and voted through by parliament.
The new reforms have sparked angry demonstrations in Paris and other French cities. Under the new rules, the 35 hour working week is protected, but as an average with employers and unions able to negotiate variations for fewer or a maximum of 46 hour working weeks. Statutory constraints which underpin workers’ rights to leave for maternity/paternity and special leave for marriage have also been diluted. Lastly, flexibility for employers to reduce wages and to lay-off staff have also been increased. The concept behind the relaxation of strict rules governing redundancies is that employers are likely to hire more staff if they can let them go should orders fail to materialise.
The move has triggered a vote of no confidence in the government which will be held on Thursday. If the government was to fall, the proposals would be shelved, but analysts expect that the opposition will be unable to muster enough votes to bring the administration down.