France: tackling unemployment and preserving employment are the new Prime Minister’s top priorities

In his speech on France’s national 14 July holiday, President Macron presented the policy priorities for his last 600 days in office. The following day on 15 July his new Prime Minister, Jean Castex brought clarification to a number of points from that speech, during his own general policy address. While the philosophy of the recovery plan was explained, the actual measures will not be known until September. First indications are that the plan will have definite elements of digital and ecological transformation, and will include an ‘industrial policy’ component for which EUR 40 billion will be earmarked. A ‘Commissariat au Plan’, (Economic Planning Division) will be set up to steer this plan that will be reminiscent of that which operated between 1946 and 2006 and which was responsible for defining the country’s forward economic planning, especially by way of consecutive five-year plans. Prime Minister Castex also underlined that at the top of his priorities stood tackling unemployment and safeguarding jobs. 700,000 young people entering the job market are being targeted, and “none should find themselves without a solution”, stated the Prime Minister. This plan’s first imperative will be to encourage the hiring of these young people via the implementation of “an extraordinary provision exempting social security contributions”. This will take the form of financial aid of up to EUR 4,000 per year for the hiring of young people under 25 years of age (the employee salary however is capped at 1.6 x the minimum wage) in all companies (regardless of size) and for at least one year. A substantial investment will also be made to safeguarding employment, amounting to EUR 30 billion for 2020 and EUR 8 billion for 2021, and which will finance measures to support employment and wages for companies that experience a sustained fall in their order books. Skills development is another objective of the plan with EUR 1.5 billion being allocated to training. Several controversial topics are also being placed onto the social dialogue table including the unemployment insurance reform (set to tighten conditions for access to unemployment insurance benefits), which was adopted but which has not yet fully entered into force, as well as the pensions reform (which provides for the implementation of a universal points system). Both reforms have previously triggered waves of social unrest and mobilisation.