Hollande promises to address unemployment with two-year plan

French president Francois Hollande last night announced a two-year plan to quell mounting discontent over the flagging economy, rising unemployment, and mass layoffs.

“I have to set the course and the rhythm” to combat “high joblessness, falling competitiveness and serious deficits”, he said. “My mission is a recovery plan and the timeframe is two years.”

Mr Hollande, a Socialist, also acknowledged that unemployment currently stood at around three million, pledging to curb the spiral in a year’s time.

Promising sweeping reform, he said: “We will not spend one euro more in 2013 than what we did in 2012.”

He said a planned 75% upper tax rate to be imposed on annual income above €1m could be dropped after around two years in place.

“Once the economy has recovered it can be dropped,” Mr Hollande said.

He also revealed his government was likely to revise down its 2013 economic growth forecast to around 0.8% from an existing estimate of 1.2%.

“It will be below 1%, most likely 0.8%,” Mr Hollande said.

Economists had widely expected the government to lower its 2013 growth forecast in line with more pessimistic market estimates when it presents its budget bill at the end of this month.

It came as the leaders of the three parties in Greece’s coalition government failed to agree yesterday on a package of spending cuts worth €11.5bn.

The prime minister had said the measure is crucial to restoring the country’s financial credibility and sustaining its bailout funding.

Conservative premier Antonis Samaras and the other two leaders — socialist Evangelos Venizelos and Fotis Kouvelis of the Democratic Left — disagreed on across-the-board cuts in pensions and wages.

The latter two insisted that Greece’s international creditors give the country more time to implement the spending cuts.

The three agreed to meet again on Wednesday. Before that, Mr Samaras will meet the creditors’ representatives today and again on Tuesday with European Central Bank president Mario Draghi.

“The talks were not conclusive. There is no final decision on the package... We need to protect the economically weak,” said Mr Kouvelis, who left the meeting first.

“We cannot exceed the [people’s] limits of endurance,” said Mr Venizelos. “There are some measures we cannot agree on, such as across-the-board cuts in pensions and cuts in disability benefits.”

The two denied that the governing coalition was shaky.

In the fifth year of a deep recession, Greece has seen its economy shrink by about 20% and the unemployment rate soar to 24.4% in June.

The cuts are required for the release of a long-delayed €31bn loan instalment from the European Commission, theEuropean Central Bank, and the International Monetary Fund, without which Greece would default on its loans.