Job market in France suffers as unemployment rate hits fifteen year high

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Sunday, June 9, 2013

François Hollande, the President of France, has vowed to reverse unemployment trends by the end of the year.
Image: Jean-Marc Ayrault.

Last Thursday, the French National Institute for Statistics and Economic Studies (INSEE) announced the French job market continued to struggle as unemployment rose to 10.8%, the country's highest recorded unemployment rate since 1998. The 0.3% rise in the first quarter of 2013 had increased doubt around French President François Hollande's promise to reverse the trend by the end of 2013.

According to INSEE data this had been recorded to be the 24th uninterrupted month of unemployment increases, leaving 3.25 million people jobless. France's economy was predicted to marginally retract overall this year and had experienced a minor recession this quarter due to deteriorating economic activity.

The news came as the European Central Bank (ECB) planned to meet to discuss interest rates. It was assumed that the ECB would reveal plans to encourage lending in the eurozone, a significant outcome for small and medium sized business, who employed around three quarters of the eurozone.

The International Monetary Fund (IMF) had advised France that they may fall behind surrounding European economies if they do not take action and introduce new economic reforms. The IMF has suggested a decrease in labour costs and stopping tax increases could help to improve the country's economic competitiveness and increase growth.