Written by Hilary Barnes
France’s top business leaders have launched an appeal to the socialist government of President Francois Hollande to recognise that it is only business than can generate jobs and save the economy, not the public sector.
Pierre Gattaz, newly elected president of MEDEF, France’s biggest and most important association of employers says:
“The house is burning, France is not in a good condition. When France is destroying a thousand jobs a day, it’s urgent.”
He referred to the “extremely dogmatic” start made by the government that had placed enormous stress on business leaders – a reference to hefty increases in taxes on business imposed by the government. Gattaz continued:
“It’s business that can save France. It is not the world of associations and the public sector that create jobs, but enterprises…..In France it is the heads of business who create jobs who are the heroes.”
He is obviously launching a head-on confrontation with the prevailing opinion in left-wing circles that business is at best a necessary evil and that all good things are delivered by the government. Gattaz counters such thinking:
“The job of the government is to prepare the terrain so that is not strewn by rocks and brambles.”
With the country suffering from record unemployment, a considerable deficit on the current balance of payments account, and wage costs in manufacturing that have overtaken those in Germany, and the lowest profit ratios in the Euro zone, French industry is in steep decline and losing world market shares.
The business leaders urge the government to have the courage to implement necessary if unpopular reforms of the retirement pension system, the labour market and the energy sector.
But the government’s policy is shackled by the necessity of curbing the budget deficit and the national debt in order to meet its commitments to the European Commission in Brussels.
These austerity policies are deeply unpopular with the government’s own supporters in the National Assembly and even within the government, forcing the government to proceed vary cautiously with any reforms. Even so several large trade unions are preparing demonstrations against reforms in September.
The leaders of some of France’s leading companies, PSA Peugeot Citroën, EADS (group head of Airbus), Sanofi (pharmaceuticals), Air Liquide (industrial gasses), Saint-Gobain (glass), Solvay (chemical industry) and Publicis Worldwide, joined Pierre Gattaz’ attack with a letter published on July 8 in Paris business newspaper Les Echos.
They called on the government to give a shock to the country’s international competitiveness by transferring a chunk of the very high wage-sum social security charges to consumption taxes, to make the labour market much more flexible, and to ensure that energy policy is devoted to providing a secure supply at prices that are competitive.
From the industry leaders’ letter:
“De-industrialisation is not irreversible. Everything is still possible. We invite the government to accelerate and deepen its actions to redress the situation. We will support these efforts, but they must be up to the measure of the situation.”
