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Last Updated: Tuesday, 27 July, 2004, 22:34 GMT 23:34 UK
Raffarin vows to fight jobs drain
Jean-Pierre Raffarin
Mr Raffarin has vowed to stem the flow of jobs abroad
France's prime minister has pledged to make the battle to halt to flow of jobs abroad his top priority.

In an attack on the previous Socialist administration Jean-Pierre Raffarin said France's 35-hour working week had "killed" economic growth.

Laws implementing the shorter working week was introduced in 1999 as a bid to curb unemployment before Mr Raffarin's centre right party came to power.

He has now vowed to allocate 2005 budget funding to lure firms to France.

"The 35 hours have killed growth since 2000," Mr Raffarin said.

"Our next budget will aim to relocalise jobs to our country. The fight against delocalisation will be one of my very top priorities in the 2005 budget."

Production switch

Many French companies are now outsourcing production to lower-cost countries in the face of high labour costs, sparking concern among the government about the competitiveness of French industry.

Semiconductor maker STMicroelectronics,is just one firm that is switching production to Singapore from a plant in Rennes.

In an attempt to stem the problem, Finance Minister Nicolas Sarkozy has suggested exempting from firms that "relocalise" jobs to France in poor areas from taxes.

Mr Raffarin is eager to reduce France's jobless rate of 9.8% - above the Eurozone's rate of 9.0% - after voters gave his administration a pounding over its jobs record in June's European elections and March's regional elections.

Furthermore, last week, a poll of 1,000 small firms in the country found many French bosses thought the shorter working week was having an adverse effect on the country's economy.

Of those polled by Ifop, 93% said they would like to see restrictions on staff work hours eased.

Hours battle

Earlier this month, President Jacques Chirac said French workers should be able to work more than 35 hours a week.

The move was seen as an answer to the finance minister's calls for changes to boost the competitiveness of French industry.

Meanwhile, some French workers have begun to accept longer working hours as the price for holding onto their jobs.

This month, workers at a Robert Bosch car parts factory became the first employees in the country to scrap the 35-hour week when they voted to work longer hours in an effort to save jobs.

Robert Bosch had said it would prevent production moving to the Czech Republic, where labour is cheaper.

Wage concerns

In its monthly bulletin for July, the Bank of France said that despite weak productivity increases workers in France and the broader euro zone had enjoyed pay rises which had contributed to "stickiness" in inflation.

"Productivity gains remained very low in 2002 and 2003, in both France and the euro area, while average per capita wages continued to increase steadily at an annual pace of close to 2.5%," the bank said.

Mr Raffarin's pledge to fight outsourcing came as he delivered an upbeat economic outlook, saying growth would be above the government's previous forecast.

"We modestly predicted growth at 1.7%... Today we have a forecast of 2.3%," he said.




SEE ALSO:
French bosses slam 35-hour week
20 Jul 04  |  Business
Scrap 35-hour week, Sarkozy says
23 Jun 04  |  Business
French economy sees strong growth
12 May 04  |  Business
France vows to fix fragile budget
04 May 04  |  Business
Sarkozy pledges 'growth and jobs'
01 Apr 04  |  Business


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