French business lobby promises 1 mln jobs in 5 years as it tries to burnish companies' image

PARIS – France’s business lobby is promising to create 1 million jobs over the next five years as it tries to convince the French that companies are not the enemy in the fight to reduce unemployment.

In an open letter released Friday, the Medef, however, said companies cannot be expected to lower 11 per cent unemployment by themselves. The group is calling on the government to lower taxes and spending to give companies the room to act.

“We’re in a kind of vicious cycle that, if we don’t fix it, more taxes and more constraints on companies will only accelerate unemployment,” Pierre Gattaz, the new head of the Medef, told reporters.

Gattaz said that the group thinks French companies pay 100 billion euros ($138 billion) more in taxes than they should.

That’s a common refrain from French businesses, which are just as often criticized for paying their executives too much and not paying enough in taxes, especially during the economic downturn. Companies and executives are often dismissed as ruthless firing machines, and government officials frequently promise that companies won’t be allowed to proceed with the layoffs they announce.

Gattaz said he is trying to change this dynamic by not simply asking for tax breaks. Instead, his letter calls on businesses to work with elected officials and unions with the goal of creating 1 million jobs. There are currently at least 3.3 million people without jobs in France, according to the Labor Ministry’s count.

He added that he wants to remind people that there are no jobs without companies, but first those businesses need to grow.

Jacob Kirkegaard, an economist with the Peterson Institute for International Economics, said it appears that the sectors of the French economy dominated by private firms have not created 1 million jobs in a five-year period since detailed data started being collected in the 1990s.

“Here we are in essence trying to arrest the growth rate of the French state as a share of the French economy,” he said. “France will not see 1 million new private-sector jobs created without further labour market reform.”