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Less than 24 hours after announcing the cessation of a subsidy to French firms hiring apprentices, the government has backtracked on its decision. In spite of the growing concern over youth unemployment, the French government decided to halt the payment of €1,000 per year to companies hiring apprentices.
In a joint cost-cutting and modernisation measure, the government announced on Wednesday that the €550 million in savings would contribute to the reduction target of cutting €3 billion from the deficit in 2014. The original apprenticeship scheme has been considered by politicians as ineffective and too expensive.
After reconsideration; financial aid will now only be given to very small enterprises that employ fewer than 10 employees; exact figures have yet to be announced. Very small enterprises with less than 10 employees accounted for 57.5% of all apprentices during 2011.
In order to combat rising youth unemployment, President Francois Hollande had prioritised increasing the number of apprentices from 435,000 in 2013 to 500,000 by 2017. This target has now been declared ‘wishful thinking’ by the General Confederation of Small and Medium Enterprises (CGPME). The Association of Regions of France (ARF) stated: “[Removal of this support would be] a major mistake [and] in contradiction to the priority given to youth employment.”
Youth unemployment in France in 2012 was 25.4%, compared with total unemployment which was 10.2% for the same period. Average youth unemployment across the European Union during 2012 was 22.8%, and even higher in the Eurozone at 23.1%.