Analysis: France's new president

Hollande summons French unions and bosses as new recession looms

Reuters/Kenzo Tribouillard

French President François Hollande has summoned trade union chiefs and business leaders to debate social policy on Monday and Tuesday as the central bank warns that the country is sliding back into recession. The “social summit” is billed as a social democratic consultation but participants are unlikely to agree on how to tackle growing unemployment and shrinking incomes.

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France has lots of trade unions but not many union members.

No fewer than five union federations have been invited to this week’s conference and some smaller ones have been left off the guest list.

But union membership stands at less than eight per cent.

Unions gain their legitimacy from workplace votes for representation on works councils and other elected bodies, in which all a company’s workforce can take part, and in mass meetings that vote whether to support calls for industrial action.

And, of course, they can call strikes ... and, from time to time, they do.

The two-day conference signals of “a new method”, Prime Minister Jean-Marc Ayrault on his arrival at the headquarters of the Economic, Social and Environmental Council at Paris’s Place d’Iéna. 

Social summits are nothing new in French politics but the government claims that under former president Nicolas Sarkozy they were more showbiz than consultation, lasting less than a day and assembling bosses and unions to hear what the president had already decided.

Hollande’s election commitments, such as the promise to create thousands of jobs in education, are presumably non-negotiable, too.

But, with unemployment already at about 10 million, several large French companies, including carmakers PSA Peugeot Citroën and Air France, have announced plans to shed thousands more jobs.

And the economic crisis looks set to worsen. The Bank of France confirmed Monday its estimate that the economy shrank by 0.1 per cent in the second quarter of this year, the first negative growth since France pulled out of recession in 2009.

The decline follows zero growth in the first quarter and if it lasts into the third quarter, it will mean that France slipping back into recession, as other EU countries like the UK, Greece, Italy, Portugal and Spain already have.

So there will be plenty to discuss at the summit’s seven round tables on jobs, public service, pensions, economic recovery, incomes and training.

There will be plenty of disagreement, too.

Union leaders have already declared that they will not be used as a rubber stamp and expressed shock at last week’s announcement of job losses in the civil service without any prior consultation.

They will be pushing for legal limits on layoffs by companies who are turning a profit and, after the largely symbolic rise in the minimum wage, and more help for those hardest hit by the crisis.

Parliamentary elections 2012

Employers’ groups, on the other hand, view the minimum wage rise as a worrying sign of government interference to come.

They warn of “catastrophe” after the summer holidays, claiming that French industry is losing competitivity day by day, want a reduction in employers’ social security contributions.

Economy Minister Pierre Moscovici on Sunday hinted that he was considering such a move, telling a TV interviewer “we shouldn’t increase labour costs any further”.

The government probably doesn’t expect consensus or even to coopt all of France’s mutliplicity of trade unions into the austerity policies it is likely to introduce as the crisis deepens. But a show of “national unity” social-democratic style would be welcome at the start of Hollande’s mandate.

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