French unions and employers start talks on Friday over how to cut social charges weighing on companies, though both sides doubted the cuts could be linked to hiring targets as President Francois Hollande first promised.
The government hopes the parties will agree by early April on the terms of Hollande’s so-called “responsibility pact”, which aims to restore French corporate margins – the lowest in the euro zone – by cutting what they pay in social charges by some 30 billion euros (24.4 billion pounds).
Unveiling the plan last month as part of a shift to more business-friendly policies, Hollande said business would in exchange have to commit to “clear, precise, measurable and verifiable” hiring targets.
But employers and even some union leaders agree such goals would be unworkable.
“From a macroeconomic point of view it’s absurd to think that we can set a numerical (hiring) target,” Laurent Berger, head of the CFDT, France’s largest union by membership, told Les Echos business daily.
Pierre Gattaz, the head of France’s main employers group Medef, has previously cited a target of creating one million extra jobs. But since then he has said he would reject any legally-binding hiring targets.
Talks are due to conclude shortly after local elections in late March with a draft law based on the deal to be sent to parliament around September, delaying any potential boost to job creation until the final quarter of 2014.
“The pact will take effect over time, but nobody is able to say that it will start to create jobs in six or eight months,” said Joseph Thouvenel, vice president of the CFTC union.
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