Hollande's 'unbalanced' tax deal

Last updated 12:39 22/01/2014

Relevant offers


Labour's Annette King denies internal rift over TPPA deal The toxic tech sector culture and how to do things differently Unlimited holidays basically a no-brainer for employers Rising in Japan's workforce: Women Barack Obama puts his finger on the real danger of robots Can you sell a sweatshirt for $2000? Why fashion is looking for new ways to define luxury US asks why extremists drive Toyotas Bundesbank to doubters: Here is our gold Australian public servant wins legal fight over A$20,000 breast surgery Hillary Clinton doesn't support Trans-Pacific Partnership deal

French President Francois Hollande told top companies that they have to promise to hire and invest more if they want to benefit from a promised cut in payroll taxes.

Companies in France pay the highest payroll taxes in Europe. A promised €30 billion ($49 billion) payroll tax cut is the centerpiece of Hollande's new bid to keep the economy from sliding back into recession and to bring down unemployment, which is nearly 11 per cent .

In a speech on Tuesday to French chief executives, Hollande said companies have to promise to hire a fixed number of workers in exchange.

He said it's up to unions and employers to decide how many, but the outcome of their negotiations "must be clear and specific and measurable, therefore verifiable."

"Companies must commit to investing more in France and moving jobs back" to France from cheaper sites abroad, he said.

Employers and unions will negotiate this spring so that the government can turn the deal, which he calls a "responsibility pact", into law by summer, he said.

Pierre Gattaz, head of France's biggest employers' association Medef, praised the general idea but warned: "If we turn the pact into obligations, additional legal rules, penalties, we completely miss the point."

Jean-Pierre Mailly, head of the hard-left Workers' Force union, criticised a "completely unbalanced deal. You announce tax cuts but what the companies might give in exchange is very unrealistic."

Hollande announced last week the tax cut to reduce the burden on companies and independent workers by €30b by 2017.

He came under immediate criticism from fellow Socialists for being too friendly to big business. He also promised to cut €50b in public spending over the years 2015-2017.

Ad Feedback

- AP

Special offers

Featured Promotions

Sponsored Content