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The French President François Hollande held a two-day summit this week with trade unions and business representatives, and expectations were high for the newly elected president and his prime-minister Jean-Marc Ayrault, who are facing a difficult economic climate with the European debt crisis looming in the background and widespread job cuts in the industrial sector.
Jean-Marc Ayrault confirmed plans to increase social contributions for employers making “unreasonable” use of the temporary workforce, i.e. those on fixed-term contracts and agency workers, although it is still unclear what can be deemed “unreasonable”. At the summit, the reformation of the French labour market was announced as the Government’s primary focus in its attempt to overhaul the national social system, but still no specifics were unveiled.
Mr Hollande also confirmed the Government’s plan to reduce the cost of employment. It is rumoured that a reduction of the employer contribution CSG (Contribution Social Généralisée) may be further looked at in September this year; the cost of the French social security system may be shifted slightly away from employers and onto the CSG levied on revenue from investments.
Finally, the summit also revealed that the Government will announce a batch of new employment contracts aimed at young people without qualifications in order to improve their employability and to combat youth unemployment.