Francois Hollande Admits Socialist Policies Failed, Declares “Economic State Of Emergency”

Remember when showing ‘progress’ in Europe was as simple as pointing to your high stock market or low bond yields to “prove” everything is awesome.

Since 2012, when Mr Hollande came to power, more than 600,000 people have joined the ranks of the unemployed at a time when joblessness has decreased in most of the other large European economies.

Well for Francois Hollande, the days of hiding behing manipulated data are over and the open kimono reveals a nation whose stability is wracked by record unemployment. In a desperate-for-re-election speech today, The FT reports that socialist leader Hollande admitted his policies needed reform and that France is an economic “state of emergency.”

In a turn towards pro-business policies (sacre bleu!), Hollande prescribed new measures which involve the creation of 500,000 vocational training schemes, additional subsidies for small companies and a programme to boost apprenticeships.

With 15 months before the presidential election, the sense of urgency is also political for the socialist leader, who has tied his decision to run for a second mandate to his ability to curb unemployment significantly this year.

“We have to act so that growth becomes more robust and job creation more abundant,” Mr Hollande said in an address to unions and business leaders. “Our country has been facing structural unemployment for too long and it needs to reform.”

Under the plan, which takes effect immediately, companies with fewer than 250 workers will receive a €2,000 payout for hiring youths and unemployed people for contracts lasting more than six months at salaries below 1.3 times the minimum wage. After two years, the subsidy will become permanent in the form of a decrease in social security charges. The tax breaks previously announced will become permanent beyond 2017, he said.

The new measures, which will cost about €2bn, are seen as aimed at this political goal. Conveniently, offering 400 hours of training to thousands of jobless people would also reduce nominal unemployment before the presidential run.