Dominique de Villepin unveiled on 16 January a new set of measures aimed at boosting employment among young people below 26 years of age. The measures will likely be welcomed in Brussels where labour market reforms are encouraged to relaunch the economy (Lisbon Agenda).
"My priority in this second stage is youth employment," Villepin said, pointing out that the working population will for the first time start to decrease in 2006 as baby-boomers reach retirement age. However, young people are the first to be hit by unemployment with a jobless rate of almost 23% for the under 25 population compared with a 9.6% rate in general, he added. And education is no longer a guarantee against precarious work conditions. "When they finish their studies, [young graduates] take from eight to eleven years to find a stable job. In the rest of Europe, it is half as much," Villepin pointed out.
The main measures proposed in Villepin's plan:
- 'First enrolment contract': a 'contrat première embauche' (CPE) will allow companies to hire youths aged under 26 and keep them on a trial period for two years (instead of 6 months). In exchange, young people will be able to claim unemployment benefits after 4 months spent on the job (instead of a more complex system where benefits are paid on the basis of 6 worked months out of 22). Up until now, CPE contracts have been reserved for SMEs of fewer than 20 employees.
- 3-year exemption of employers' tax: for companies permanently hiring youths under 26 who have been out of a job for more than 6 months
- Interns: mandatory pay for interns staying for more than 3 months and recognition of internships in university degrees. A charter will be drawn up to define good practices and "put an end to injustice"
- Combining temporary with permanent jobs: part time and full time employees will be authorised to work on an temporary basis, in respect of working time legislation.
Senior people also receive their share, in line with European recommendations to increase the employment rate among this sector of the population:
- Part time retirement allowed as of age 60
- Limited duration contracts (18 months) available as of age 57 (renewable once)