French employers stir row

French employers' federation Medef on Wednesday presented a reform blueprint it says would create one million new jobs and kickstart stagnant growth in Europe's second largest economy.

The proposals include a cap on corporate taxation, lowering the country's minimum wage, and raising the retirement age. In addition, business leaders represented by Medef demanded that two of the country's 11 public holidays be scrapped.

"Getting rid of two public holidays per year would extend the average annual working year by 1.2 days, which represents 0.9 percent of gross domestic product and 100,000 extra jobs," Medef said in a statement accompanying a 100-page catalogue of measures.

The group also called for a revision of the principle that the 35-hour working week has to be applied to all companies, saying sector-wide agreements should be allowed for parts of the economy that want to opt out.

Medef boss Pierre Gattaz insisted he was not calling into question the 35-hour week or the minimum wage, but called for an urgent shake-up of the French economy that even its own economy minister has described as "sick." He said France needed "a debate without taboos" over its "outdated social model."

France is increasingly seen as the "sick man of Europe" over its inability to rein in rampant unemployment and kickstart its faltering economy, which has remained stuck at zero growth for the past two quarters. In addition, a runaway public deficit limits government's scope for stimulus spending.

"Given the economic and social condition of our country, given the period of economic crisis we are suffering, given the dangers we have to overcome, the time for hesitation, procrastination and half-measures is over," said Gattaz.

France's powerful trade union immediately lashed back at Medef, describing the proposals a "provocation." The leader of the Force Ouvriere (FO) union, Jean-Claude Mailly, said the measures were "unacceptable."

The reforms are unlikely to become reality. France's Socialist Prime Minister Manuel Valls said last week that he won't touch the 35-hour working week. Valls also called on organized labor and employers to avoid provocations in the country's reform debate.

uhe/nz (Reuters, AFP, dpa)