Francois Hollande vows action on Peugeot job cuts, economy
July 16, 2012, 12:09 am TWN
PARIS--President Francois Hollande vowed Saturday to take action to stop huge job cuts at carmaker Peugeot and to revive France's stagnant economy as he gave his first major interview since his May election.
In the televised interview after taking the salute at France's annual Bastille Day military parade, Hollande said the state would not stand idly by after PSA Peugeot Citroen announced plans this week to cut 8,000 jobs.
"This plan is not acceptable, it must be renegotiated," Hollande said in the interview with the TF1 and France 2 channels, adding: "The state will not leave this be."
Hollande said the government would launch consultations to find ways "to reduce the number of jobs being cut" and to ensure that no employees were let go without compensation.
Struggling with falling European sales, Peugeot shocked France on Thursday by announcing the job cuts, sparking union anger and underlining the country's difficulty competing in the international labour market.
Socialist Hollande was elected in May on a promise to put the economy back on track, focusing on growth rather than austerity measures adopted elsewhere in Europe in the face of the eurozone debt crisis.
"The first priority is employment. Everything must be done so that employment is as high as possible at the end of my five-year term," Hollande said.
He also promised France would clean up its public finances, saying: "We will control spending, make savings."
But he rejected the idea put forward by his right-wing predecessor Nicolas Sarkozy of enshrining a "golden rule" on budget balances in the French constitution.
"I told the French that the golden rule, the return to a balanced budget, would not be in the constitution," Hollande said.
"It will be in the framework of organic law... I don't think a commitment that is necessarily for only a few years should be written in marble."
The Bank of France recently confirmed an estimate that the French economy will shrink by 0.1 percent in the second quarter — the first quarter of negative growth since France emerged from recession in the spring of 2009.
A second contraction in the third quarter would mean France joining other EU countries like Britain, Greece, Italy, Portugal and Spain in recession.
Hollande confirmed that France was considering raising the CSG social welfare tax as a way of tackling the deficit and boosting competitiveness by lowering payroll charges.
But he said it was not the "only instrument" under consideration. "It's not with the CSG that we will make up the state deficit."
He added however that the government did not want to increase the value-added tax, saying such a move would "weaken growth, put people out of work and cut purchasing power."
Hollande started the day reviewing the traditional Bastille Day military parade in Paris that saw soldiers, sailors and gendarmes march down the Champs Elysee avenue from the Arc de Triomphe, with fighter jets and other military planes flying overhead.
Sitting alongside government ministers and accompanied by his partner Valerie Trierweiler, Hollande watched as nearly 5,000 uniformed servicewomen and servicemen took part in the parade.
Asked during the interview about an incendiary tweet sent by Trierweiler during last month's parliamentary election campaign, Hollande said he had told those close to him to resolve personal issues in private.
"Private affairs are resolved in private. And I have told this to those close to me so they can scrupulously accept this principle," Hollande said.