* Hollande offers firms 30 bln euros in tax breaks vs hiring
* Employer group opposed, says labour costs must come down
* Unions sceptical that deal can be reached
PARIS, Jan 27 French unions and employers hit
out on Monday at President Francois Hollande's plans to impose
hiring targets on companies in exchange for a tax break as talks
over his competitiveness push got off to a rough start.
The Socialist Hollande won support from Brussels, Berlin and
financial markets for a reform drive unveiled on Jan. 14 that
may be his last chance to defeat unemployment and stimulate
growth in Europe's second-largest economy.
In a shift to the political centre, he announced 30 billion
euros ($41 billion) of tax breaks for companies by 2017,
slashing labour costs in an effort to bolster squeezed margins
and help them regain lost international market share.
But as parties met for a first day of talks, they appeared
split over Hollande's idea of setting "measurable" hiring
targets for companies benefitting from the tax breaks, with most
labour unions expressing scepticism.
"Nobody can force companies to hire," said Jean-Claude
Mailly, head of the hard-left Force Ouvriere union.
"Counterparties in terms of hiring are only possible in exchange
for specific subsidies, not a general policy."
Hollande is trying to achieve two goals with his so-called
"Responsibility Pact": cutting France's public deficit to 3
percent of output next year and bringing down the joblessness
rate down from a record near 11 percent.
He faces pressure to bring the rate down quickly this year
having made an optimistic-looking pledge to bring unemployment
down during 2013. Despite billions of euros spent on subsidised
jobs schemes last year, Labour Ministry data due later on Monday
expected to show that joblessness continued to rise through the
end of last year.
With unions already criticising the pact as a "gift to
companies", Finance Minster Pierre Moscovici urged business
leaders to accept that they would have to show goodwill.
"Employers will have to accept the logic of a counterparty,"
he said on France Info radio. "That's fundamental, because if
not the French will see it purely as a gift."
Yet the chief of Medef, France's main employers group, has
already ruled out the idea of legally binding hiring targets for
specific job sectors, arguing that companies would first need to
evaluate their staffing needs in the event of an upturn.
After a meeting with Prime Minister Jean-Marc Ayrault, Medef
boss Pierre Gattaz said labour costs would have to be slashed by
at least 60 billion euros by 2017 if companies were to start
"That would be 35 billion euros of cuts on labour costs and
25 billion in lower taxes," Gattaz said, adding that cutting
costs by "a few billion" euros would not be enough.
Unions appeared divided, with only the moderate CFDT and
smaller CFTC unions expressing optimism.
Three of five major unions at the talks must sign an
agreement with the Medef in order for it to form the basis for
legislation, which Hollande has said he wants to be sent to
parliament in the second half of 2014.
Thierry Lepaon, leader of the hard-left CGT union,
criticised the terms of talks which he said gave too much to the
corporate sector, calling instead for a revision of billions of
euros in existing tax breaks for companies.
"It seems as though the president and the Medef have not
agreed on any counterparty to justify the 30 billion euros in
new subsidies for companies," he said. "We would have like to be
part of this 'deal' they have agreed."