April 21, 2004

AFTER ALL, IT WAS JUST A FEW DECADES AGO THAT THEY HAD A FUNCTIONING ECONOMY:

French unemployment revised upwards to 9.8% (Jo Johnson, April 20 2004, Financial Times)

The number of people seeking work in France is now brushing against the politically traumatic 10 per cent threshold, following an upwards revision to official unemployment figures for February.

For President Jacques Chirac, who has made job creation the priority for the embattled government, Tuesday's figures from Insee, the French statistics office, make worrying reading. Unemployment at the end of February was revised upwards to 9.8 per cent from 9.6 per cent.

All the polls show unemployment to be the biggest single concern of the French public today. Nicolas Sarkozy, France's new finance minister who is struggling for ways to stimulate consumer spending, has promised that "everything will be done for economic growth and jobs".

For the first time since 1993, France destroyed jobs last year. Some 67,000 fewer people worked in 2003 than in 2002, principally because of a sharp fall in the number of people employed on the public payroll, employer of one in five French workers.

The number of public employees in 2003 fell by just over 100,000, in large part because of the government's decision not to renew a work-creation scheme for young people introduced by the last Socialist administration.

This was offset only partially by an increase in the number of controversial fixed-length contracts in the private sector. The total number of unemployed in France now stands at 2.68m, compared with 2.43m when the centre-right came to power in mid-2002.

The revised figures mean France's jobless rate is a full percentage point above the eurozone level of 8.8 per cent in February. Insee on Tuesday also revised upwards its figures for December 2003 by 0.2 per cent to 9.9 per cent.

Leaked finance ministry data suggest the French government no longer believes it can reduce the budget deficit to below 3 per cent of GDP in 2005. With growth sluggish, the European Commission predicts France will have a deficit of 3.7 per cent next year and 3.6 per cent in 2005.


As Paul Krugman could tell them, these things are just cyclical. The fact that they're in economic decline during a >global boom just means their cycle is running a bit differently....

Posted by Orrin Judd at April 21, 2004 8:29 AM
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