The 35 hour work week introduced in France by a Socialist government in 2000 gave off a “negative signal” and should not be sacrosanct, Economy Minister Emmanuel Macron said on Thursday (20 November), breaching a major left-wing taboo.
Right-wing politicians, foreign investors and many economists have criticised the labour laws supporting the 35 hour week as hurting business in Europe’s No. 2 economy since it was introduced by former Socialist Prime Minister Lionel Jospin.
But despite persistent unemployment above 10% and weak growth, no member of President François Hollande’s government had yet publicly criticised one of the shortest legal working weeks in the world.
“The 35 hours sent a negative signal for French companies, because this reform was perceived as the reform of a country which no longer wanted to work,” Macron, a former banker, told a parliamentary hearing.
“It’s possible to defend the 35 hours – and for my part, I do defend them – without putting them on a pedestal… Given our economic reality, we can look at the reality of the 35 hours with pragmatism.”
Macron said that he did not wish to dismantle the 35 hour week but to adapt legislation so that companies could strike their own wage and worktime agreements with unions internally.
Former conservative president Nicolas Sarkozy watered down the 35 hour week by making overtime payments tax free, but did not retract the law, arguing that that would create unnecessary backlash. Hollande has since revoked the tax break on overtime.
Separately, Macron said it should be easier for businesses to implement short-time work schemes and pay cuts during a downturn, urging trade unions and employers to renegotiate last year’s labour reform deal.
Senior officials told Reuters this week the government should press ahead with labour reform as it tries to cut unemployment, stuck above 10%, by making the job market more flexible.
“I hope that in the coming months, social partners and the legislator will be able to take into account amendments to the 2013 agreement because experience shows, after a bit more than a year, that it is probably a bit too restrictive,” Macron said.
Since the agreement was struck in January 2013, only about half a dozen such work-time reduction deals have been struck.
With an annual deficit of 4.1% of GDP in 2013, France has exceeded budgetary limits established by the Treaty of Maastricht.
The European Commission launched measures to deal with excessive deficit and gave France an extra two years, until 2015, to reduce its public deficit to 3%.
But France announced in September 2014 that it will not reduce its budget deficit to within EU limits until 2017, despite the extra time given.
France's announcement went down badly with some eurozone finance ministers who saw it as an affront after the painful cuts many governments have implemented to bring down swollen deficits and win back investor confidence.