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€2.6 billion for people not enough

Unions and economists judge government social plan insufficient, employers’ federation says it is a burden on the future

A SOCIAL aid programme of €2.6 billion has been judged insufficient to help people by unions and not large enough to restimulate spending by economist.

A series of announcements were made by the government following four hours of talks between ministers, unions and business leaders yesterday.

The assistant director of the Obervatoire français des conjonctures économiques (OFCE) Eric Heyer said: “The money is not there.

“To come to the aid of people who risk falling into poverty is very important but ten times more needs to be put on the table.”

Chief Economist of Barclays Capital Laurence Boone said the strategy was not as ambitious as the relaunch plan of the USA.

“The ideas are not bad, but consumers in France represent 75% of GDP – €1,500 billion. So €2.6 billion is just a drop in the ocean,” she said.

The head of employers’ federation Medef, France’s CBI, Laurence Parisot said: “I don’t know how you can say there is enough money there because I can’t even do the maths.”

“All this is happening at a time that Brussels is calling France to order,” she said on radio France Info.

“We need to act in a way that does not burden the future and today we are not asking these questions,” she added.

The secretary general of the CFDT François Chérèque said: “Union action has prompted a first change of tack in the actions of the government. The measures announced today are heading in that direction but in the face of workers’ situations they are not enough.”

The head of the CGT Bernard Thibault said the government needed to bring up the €2.6 billion it had just allocated to match the €8 billion it has set aside for business by removing the taxe professionnelle.

Union heads will meet next Monday to discuss their programme for the national strike set for March 19.

Measures

President Sarkozy announced that two-thirds of the first band of income tax (revenues of €5,850 to €11,670) would be lifted for those paying the first third. Tax credits will be made available for households that just pass into the second tax bracket.

Job seekers who have only worked for two to four months (not enough to gain full unemployment benefits) will receive a one-off payment of €500 if they are signed up next April 1 or May 1. This could affect 234,000 people.

Redundancy payments could be set at 75% of salary with the cost being born up by business and the state.

A fund of €2.5-3 billion euros will be set up for “social investment” – a large portion of which could go towards job training. The idea was originally proposed by the CFDT union.

Three million families on “modest” incomes – those that benefit from the allocation de rentrée scolaire (back to school benefit) will receive a one-off €150 payment in June.

A sum of €200 to pay for home help will go to 660,000 households currently drawing the allocation personnalisée d'autonomie à domicile benefit, 470,000 who already receive money to help pay for childcare, 140,000 homes with a handicapped child and the recently-employed who need childcare facilities.

Bosses who resort to partial layoffs and redundancies should not accept any bonuses, said the president.

He has asked the director general of government statistics monitor Insee, Jean-Philippe Cotis, to study the potential impact of a profit sharing scheme between employees and shareholders.

Future discussions on how unions can take part in business restructuring talks will also take place.

Photo:Afp

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