Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Hollande troubled by France recession

16 May 2013, 11:22

Paris - President Francois Hollande's nagging headache to reboot the French economy has turned into a migraine as the economy slipped into its second recession in four years, fuelling speculation of an impending cabinet reshuffle.

Having just marked his first year as French president, Hollande's ambition to reverse the trend of soaring unemployment is now deemed an impossible task by many economists who say the government's efforts to create more jobs will at best limit the damage.

The national statistics agency, Insee, said on Wednesday the eurozone's second-largest economy fell into recession - two consecutive quarters of contraction - in the first three months of the year with the economy shrinking by 0.2%, just as the eurozone posted its sixth straight quarter of economic contraction.

The French opposition was quick to pounce on the news, with ex-prime minister Francois Fillon of the right-wing UMP blaming the recession on Socialist government inaction since Hollande took power.

"Francois Hollande's government stopped all reforms, cancelled them, and did not replace them with any real initiative for competitiveness," Fillon told news website lopinion.fr.

Record-high unemployment

But Finance Minister Pierre Moscovici insisted that the recession was "not a surprise" and was "largely due to the environment in the eurozone".

He also maintained the government's promise of stemming the rise in unemployment by the end of the year.

The government's woes come after Hollande last week for the first time hinted at a reshuffle of ministers and with speculation intensifying after Foreign Minister Laurent Fabius on Tuesday said the finance ministry lacked a proper "boss" to co-ordinate economic policy.

In March, the number of unemployed French jobseekers reached a record-high, hitting 3 million.

"Reversing the curve by the end of the year is a mission impossible," said Mathieu Plane, an economist at the French Economic Observatory at the Sciences Po University.

Plane said that although the government might be able to produce one month of good news by applying a raft of measures to boost employment, "an exit from the crisis is not in sight".

"The only way to limit the damage is to offer part-time unemployment", referring to policies that allow employers to retain staff by reducing their hours.

Zero growth in 2013

The March jobless data was a real set-back for Hollande who in September gave himself one year to reverse the curve. In late December, he moved the goalposts, saying the trend would be bucked by the end of this year.

"Clearly when Francois Hollande said 'the trend will be reversed at the end of the year' he had in mind that activity could resume before the end of the year, something which seems complicated.

In no region in the world are we seeing an activity pick-up, and Europe isn't very robust," said Philippe Waechter, an economist at Natixis investment bank.

To curb unemployment, economists estimate that France needs annual growth of around 1.5%.

But on Wednesday, the president told a press conference in Brussels: "It is likely that there will be zero growth in 2013".

He nonetheless added: "It is my view that we are past the worst."

Earlier in the day, Moscovici had said in Paris that a tiny economic expansion of 0.1% was still expected this year.

Hollande's government still expects a slight decline in jobless figures in the last quarter owing in large part to a gradual recovery of global activity.

Hollande met European Commission head Jose Manuel Barroso and other commissioners in Brussels for talks on boosting eurozone growth and France's efforts to reach EU deficit limits of less than 3% of Gross Domestic Product (GDP).

The EU has signalled it will likely give France an extra two years, to 2015, to bring its deficit back under 3% of GDP, although Paris will be obliged to undertake reforms in return.

On Thursday, Hollande is to give a wide-ranging press conference when he is expected to sum up his first year as president and respond to questions about a cabinet reshuffle.



Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Nigeria @ 56: Words to my green f...

A leader’s job is not to dictate, but rather to be respected, admired and be a trustee, of the land we love, with so much potential, a land which should be freer than free. Its still a long way to fufilling our destiny! Read more...

Submitted by
Isaac Asabor263
Recession: An opportunity for Nig...

The recession should be seen as an opportunity for the country’s promotion as long as we all collectively conduct ourselves in a patriotic manner, writes Isaac Asabor.  Read more...

Submitted by
Black and White

We want to imitate the whites in everything because we are ignorant of our inherent originality and content. We spend all our Naira to acquire his inventions because we so oblivious of our natural endowments that we allow him have it for free. Read more...

Submitted by
Nate Nat
Adamawa State University Mubi: A ...

ADSU integrity forum has accused the Sunday Joshua Wugira, a lawyer, of adopting unorthodox tactics by abusing his privilege by attacking the integrity of ADSU Vice Chancellor Dr. Moses Zira Zaruwa, writes a News24 reader. Read more...

Submitted by
Abdulsalam Jubril
My Country Nigeria (Part One)

Poetry by Abdulsalam Jubril.

Submitted by
Abdulsalam Jubril
Recession, dearth in leadership a...

Every leader has the opportunity to become great and making himself immortal in the lives and hearts of people for generations to come. Will Mr. President seize this opportunity?, questions Abdulsalam Jubril. Read more...