New government sets out social and employment priorities

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In July 2002, France's new Prime Minister, Jean-Pierre Raffarin, presented his government's programme to the National Assembly. In addition to a firm statement on the importance of social dialogue and the social partners, the Prime Minister announced action in important social and employment areas, including pensions, social security, youth employment, the fight against exclusion and discrimination, and the reform of the state. While employers' associations were on the whole satisfied, trade union reaction was more circumspect or even hostile.

In the wake of initial meetings with the social partners in May 2002 (FR0206105F), Jean-Pierre Raffarin, having been confirmed as Prime Minister by President Jacques Chirac following the general election in June, tabled his new conservative government's programme to the National Assembly on 3 July 2002.

Main points of the government's social agenda

As part of a call for the Republic to embrace 'social democracy', the Prime Minister expressed a desire to place social dialogue 'at the heart of government action and for unions and employers to be consulted before any major state initiative'. To achieve this, the social partners 'will be given freedom to develop - through agreement and in compliance with the fundamental principles of French law - the rules governing labour relations'.

With regard to vocational training, the government, in view of changing economic conditions, intends to implement an 'employment insurance' scheme based on personal training accounts and recognition of on-the-job experience. This overhaul of the vocational training system is to be regionally based. Action on this issue is to begin in summer 2002.

On the issue of pensions, the government is committed to safeguarding 'the pay-as-you-go system in order to ensure adequate income for all pensioners'. Nevertheless, the government intends to base its decisions in this area on the following basic principles:

  • 'greater equity between all French people', taking into consideration differences in employment status and situation;
  • 'freedom of choice', without challenging the principle of retirement at 60 but enabling those who wish to do so to extend their working lives and thus to boost their pension entitlement;
  • allowing people the 'possibility of topping up their pensions with income from savings thanks to a tax incentive'; and
  • a fair share of the burden, with the state pulling its weight.

The Minister of Social Affairs, Labour and Solidarity is to launch work on these issues in autumn 2002, with a projected completion date late in the first half of 2003.

With regard to healthcare, the Prime Minister advocates 'new governance of the healthcare and health insurance system' based on three guiding principles:

  • 'a clearer distinction', in terms of roles and funding, between the state on the one hand and the health insurance system on the other;
  • 'accountability across the board'; and
  • 'more regionalisation'.

Equality of access to care is to be strengthened, so as to provide all French people with top-up health insurance. The government will attempt to avoid both healthcare rationing and runaway spending.

As far as the fight against exclusion and discrimination is concerned, the government is set to propose a programme to tackle extreme job insecurity and exclusion by the end of 2002. A parliamentary debate on social integration is to be organised in the near future. A 'single allowance for infant care' is to be introduced for all families, to 'guarantee free choice' for women . The 1975 law on people with disabilities will be strengthened to provide for a 'right to compensation for disability'. There will be a tougher crackdown on labour trafficking and illegal immigration, but the integration of legal migrants will be made easier by an overhaul of the right to asylum provisions and by faster processing.

The state itself is to be reformed. The introduction of 'guaranteed services', designed to limit interruptions to public services during industrial action, is to be studied. Staffing levels in the civil service should correspond to requirements, on a sectoral basis, and 'civil servants will no longer be systematically replaced'. The Prime Minister reasserted that the state will withdraw from involvement the market sector. The legal status of the EDF and GDF energy utilities is to be amended, so as gradually to allow private shareholders, 'while at the same time keeping them in the public sector'.

In terms of employment policy, the government and Jean-Pierre Raffarin are committed to 'restoring employment to its rightful place'. The goal remains full employment, with the conviction that 'employment-inhibiting taxes and social contributions must be avoided'. In order to achieve this, the government 'is committed to an across-the-board cut in social security contributions'. The total exemption from employers' contributions provided for in the government's new private sector youth employment scheme (FR0208101N), the bill on which has been considered by parliament during summer 2002, is a fruit of this resolve. Employment incentives will be adapted for part-time workers. As part of the programme, an initiative to bring corporate taxes down into line with the European Union average is planned.

There will be no going back on the statutory 35-hour working week (FR0001137F), but 'adjustments need to be made'. Overall, the Prime Minister considers that the Labour Code needs to be simplified and modernised. Consequently, the previous government's 'social modernisation' law (FR0201102F) will be overhauled and simplified.

The Prime Minister is calling on trade unions and employers to hold the necessary talks on all these issues.

Social partner reactions

Both trade unions and employers' associations reacted to the Prime Minister's statement to the National Assembly. The Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) called 'the Prime Minister's stated intentions interesting and encouraging'. In the view of MEDEF, Jean-Pierre Raffarin's statement 'strongly reasserted the government's commitment to dialogue-based reform and to major policies conducive to modernising France'.

The General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME), which overall greeted the Prime Minister's speech favourably, nevertheless regretted that the government had failed to announce an immediate decree to make the 35-hour working week more flexible.

The Craftwork Employers' Association (Union professionnelle artisanale, UPA) was pleased to see that social dialogue and vocational education had been given priority status. UPA also praised the move to cut contributions and fine-tune the 35-hour working week legislation. However, it lamented the fact that legislation on the crafts sector left unfinished by the previous government had not been carried forward by the new government.

On the trade union side, the General Confederation of Labour (Confédération générale du travail, CGT) stated that the economic and social choices made by the government 'lean too far towards the free market'. CGT is now calling for an autumn of action on the issues of 'wages, employment and the development of public services' and for nationwide rallies on pensions to be held on 25 and 26 September 2002.

The French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT) is satisfied with the Prime Minister's pledge to promote social dialogue in addressing various issues and also with the approach chosen by the government in dealing with pension-related matters. CFDT also supports the idea of 'new governance for the healthcare system' and the government's resolve to reform public services. Nevertheless, it is sceptical as to whether tax and contribution cuts alone can bring about full employment and it deplored the fact that the Prime Minister made little mention of European unification and globalisation.

The General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO) welcomed the government's commitment to social dialogue, but lamented the Prime Minister's failure to broach the issues of wages and what it saw as the ambiguous nature of specific proposals, particularly those relating to pensions and social security. CGT-FO also expressed its concern over potential workforce reductions in some areas of the civil service and the opening of EDF and GDF to private capital.

The French Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l'encadrement-Confédération générale des cadres, CFE-CGC), through its president, Jean-Luc Cazettes, expressed its overall satisfaction at the Prime Minister's speech. However it is cautiously awaiting concrete proposals, in particular on pensions and on the effective relaunch of social dialogue.

Finally, the French Christian Workers' Confederation (Confédération française des travailleurs chrétiens, CFTC) noted with interest the Prime Minister's focus on social issues but was concerned by the government's apparent reliance on public spending cuts and privatisation to fund its policy agenda.

Commentary

Following the Prime Minister¹s relatively uncontroversial statement, with its emphasis on social dialogue, the government has set about the task of implementing its initiatives, such as the private sector youth employment scheme and the harmonisation of the current differing rates of the SMIC national minimum wage (FR0208102F). The government has come up against its first difficulties with the trade unions and employers' associations, which are still divided on these issues. In addition, the forthcoming elections of representatives on industrial tribunal s (Conseils de Prud'hommes) in December 2002 will fuel competition among the various trade unions, with each trying to outbid the others. At the same time, among employers' associations, UPA, openly (FR0206101N), and CGPME, after internal wrangling (FR0207101N), are trying to wrest the undisputed leadership of the employers' side away from MEDEF. (Maurice Braud, IRES)

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