Unemployment marks the divide between France and Germany


As unemployment rates are increasing in France while decreasing in Germany, the French government could hire a German advisor to remedy the situation, EURACTIV France reports.

One of French President François Hollande’s ambitions is to put in place social and fiscal convergence between his country and Germany, but for now the two economies are taking opposite turns.

The number of unemployed people looking for a job has increased by 0.3% in France, which marks the president’s failure to decrease unemployment by the end of 2013.

According to official figures published by the Labour Ministry this week, people without any activity (known as category A) have reached a record high number of over 3 million.

Categories B and C (persons who have a slower activity) has increased by 0.5 to reach 4,898,100 in continental France and over 5 million including the overseas territories.

These figures were published on the day when Prime Minister Jean Marc Ayrault was meeting with employers’ and trade unions’ organisations to launch the “responsibility pact” announced by the president and which looks to reduce employers’ contributions in exchange for commitments for more job creation.

The situation is Germany is radically different. At the beginning of January, Germany unveiled that after four months of rising unemployment, figures fell by 15,000 to 2965 million in December in seasonally adjusted (SA) data, according to the Federal Labour Office.

The unemployment rate remained stable at 0.9%, close to its lowest level since 1990, after a peak in 2011.

In absolute numbers the job seekers, however, increased by 2.87 million against 2.80 million in November and the unemployment rate reached 6.7% against 6.5%.

Economists often argue that the unemployment calculations in France and Germany are different. Many Germans, who work part time although they would like to work more, are not included in unemployment figures.

Little chance for a decrease in France

Two French researchers, Nicolas Lepage Saucier and Stéphane Auray, studied the evolution of unemployment statistics and noticed a “particularly worrying constant increase of long-term unemployment”.

Both researchers are hardly more optimistic than the French opposition, who may be using unemployment statistics to discredit the government.

“A significant decrease seems unlikely in the short term,” they said, adding that fulfilled job offers proposed by the unemployment agency have steadily declined since January 2012 “except during the last six months when the situation slightly improved in terms of collected job offers which suggests a possible recovery if the trend is confirmed”.

German advisor for France?

The German press recently reported that there were contacts between Hollande and Peter Hatz, an advisor to former German Chancellor Gerhard Schröder and author of the labour market reforms in Germany.

The French president has denied the rumours.

Hatz’s reforms include limiting unemployment benefits to 12 months and encouraging unemployed people to accept any job offer.

In the best case, economists anticipate a stabilisation of the unemployment rate in 2014. But they believe that the expected growth (0.9% according to the the government, 0.6% according to the experts) is too low to absorb the increase of the active labour force of around 150,000.

In a press release, French Labour Minister Michel Sapin admitted that the decrease in unemployment promised by the French president did not happen but says there was “almost a stabilisation” by the end of 2013.

The European labour market is confronted with a paradox: despite record unemployment in many member states, millions of jobs remain unfilled in key economic sectors.

In spite of all efforts to bring down unemployment and match skills in the domestic labour force, Europe-based international companies and SMEs face huge problems to hire the people they need.

  • 31 January 2014 : unemployment figures for eurozone to be published
  • 19 February 2014: Franco-German summit

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