FRANCE ANNOUNCES PLAN TO BOOST EMPLOYMENT
The government announced a three billion
franc program to combat long-term unemployment amid speculation
among political and economic analysts that it is positioning
itself for a period of economic reflation.
    The package presented to the cabinet of Prime Minister
Jacques Chirac by Social Affairs and Labour Minister Philippe
Seguin today is to be financed out of a 7.5 billion franc
contingency fund announced on February 25.
    Finance Minister Edouard Balladur previously ruled out a
reflationary program.
    Long-term unemployment, defined as being out of work for
more than one year, affects about 830,000 people or one third
of French unemployed, government figures show.
    The main measures of the employment program give employers
financial incentives to offer short-term work contracts of at
least two years and stress retraining to help the long-term
unemployed return to the labour market.
    Training subsidies and exemptions from social security
contributions are the main incentives for employers.
    "Companies tell us that we have to give them a strong
incentive to take on people who have fallen out of the labour
market and that's why the proposals...Are costly," an aide to
Seguin said.
    The analysts said speculation the government is considering
a reflationary program was sparked by Chirac spokesman Denis
Baudouin, who said yesterday that ministers were generally
agreed on the desirability of relaunching the economy.
    He appeared to contradict statements by Balladur ruling out
economic stimulation despite the government's revision of its
1987 growth forecast to about 2.0 pct from 2.8.
    Finance ministry officials later clarified Baudouin's
remarks, saying there was no question of any move to stimulate
the economy through a boost to consumer spending although
government policy allowed for increased industrial investment
from the proceeds of France's five-year privatisation plan.
    The 1987 budget allowed for 30 billion francs in revenue
from privatisation, to be split between repaying national debt
and providing state enterprises with fresh capital.
    Some political analysts said Baudouin's comments possibly
reflect widening differences within the RPR-UDF coalition on
social issues ahead of next year's presidential elections.
     Divisions began to show last December, when a wave of
strikes led by transport workers paralysed the country and
drove the government into a new mood of conciliation with
labour.
     Officials said that after the success of the privatisation
of Cie de Saint Gobain <SGEP.PA> and Cie Financiere de Paribas
<PARI.PA> the government had decided to speed up its five-year
privatisation program with the aim of completing a third of it
this year, ahead of the presidential elections expected in
1988.
    The accelerated program could provide additional unbudgeted
revenue to boost industrial and research investment and
spending on infrastructure such as the national motorway
network.
   The government also today revived a proposal, blocked last
year by Socialist president Francois Mitterrand, to encourage
more flexible working hours, which it says will boost jobs by
improving the competitiveness of French industry.
    The proposals allowing night-shift work by women and
variations in the standard 39-hour working week are to be put
to parliament as a self-contained draft bill after being vetoed
for procedural reasons by Mitterrand and later the Council of
State.
 REUTER
