Hollande makes last-chance push to curb French unemployment

French President Francois Hollande arrives to deliver his speech as he presents his New Year greetings to Employment and Unions forces at the Economic, Social and Environemental Council in Paris, France, January 18, 2016. President Hollande announced a job-creation scheme worth two billion euros ($2.2 billion), as he tries to improve his chances in the 2017 presidential elections. [Photo/Agencies]

PARIS - French President Francois Hollande announced a two-billion-euro ($2.2 billion) job-creation scheme on Monday as he sought to save his 2017 re-election chances, offering a nod to the left of his Socialist party without undoing business-friendly reforms.

Rising unemployment, at an 18-year high of 10.6 percent, has dogged Hollande throughout his presidency and is a reminder to voters that he has failed to live up to promises to put the jobless rate on a convincingly downward path, which he set as a pre-condition for running in the next presidential election.

Hollande said the plan, which includes subsidies for firms that hire new staff, was not a political calculation.

He resisted pressure from some in his party for something more radical to help the low-paid and unemployed after regional election losses, drawing ire from some lawmakers and trade unionists, while employers said the moves were a step in the right direction but did not go far enough.

Hollande reaffirmed plans to push ahead with more business-friendly changes, including a cap on the amount dismissed workers can claim in labour courts, something employers have long called for.

"What counts is to go all the way with reforms, to do the reforms that are expected without thinking about anything else other than their effectiveness, the utility and pertinence," Hollande said in a speech presenting the measures.

"On that point, I will go all the way and I urge everyone to take part," he said.

Under Hollande's two-year plan, which takes effect immediately, companies with fewer than 250 workers would get 2,000 euros for hiring youths and unemployed people on contracts lasting more than six months.

A further one billion euros would go towards job training

and a payroll tax cut will be made permanent. The aim is to get 500,000 people into training programmes, up from 400,000 in the first nine months of last year, bringing them out of the jobless total which has been stuck at a record high of 3.5 million.

"It's a victory for the reformist side," said Saxo Bank economist Christopher Dembik. "He clearly thinks the election will be won on the centre-ground of politics."

Drawing the ire of some trade unionists, Hollande also suggested unemployment benefit payments go on for too long, a nod to representatives of employers and employees who are in charge of reforming the deficit-stricken unemployment benefit system.

"How shameful to suggest the jobless are lazy or privileged people," said Philippe Martinez, the head of the communist CGT union, France's largest.