As investor sentiment plunges across the world, President François Hollande of France has unveiled an economic plan to deal with what he describes as his country’s “state of economic emergency”.
Setting out a new €2 billion (£1.5 billion) job creation plan for France, the socialist leader said the country is facing an “economic and social emergency” as well as an “uncertain economic climate and persistent unemployment”, reports the BBC.
Recently President Hollande said that the social emergency in France, caused by unemployment, was as every bit as serious as the emergency caused by terrorism. In his annual speech to business leaders he reinforced that idea, prioritising his response to it.
“Our country has been faced with structural unemployment for two to three decades,” he said, “and this requires that creating jobs becomes our one and only fight.”
France’s unemployment rate has soared to an 18-year high of 10.6 per cent, against a European Union average of 9.8 per cent and 5.4 per cent in Britain. Facing re-election next year an increasingly desperate President Hollande proposes to pay French employers to hire young unemployed people as a means to restore confidence in his country’s “broken” economic model, one which is marred by low output and stagnant growth.
France’s state of economic emergency was declared at the same time as Germany faces its most difficult start to a year in recent memory, reports The Express. With consumer confidence plummeting, industrial production growth in the EU’s biggest economy has slipped to zero per cent.
Germany and France are the eurozone’s two biggest economies, and two of the six largest economies in the world. Economists have warned that if the French and German economies collapse the ensuing domino effect would bring down the entire eurozone and severely damage the global economy at a time when it is already under considerable stress.
Some are even warning that with the downturn in China a global recession is now more likely than at any time since the 2008 financial crisis.