Worn by the descent of the rate of unemployment to 8

Restored growth, unemployment in the one four years and the promise of a budget deficit declining: in this 2006 re-entry, a gentle euphoria delude the Government. It was patent, yesterday in his press conference monthly, delocalized in Troyes (Aube). On the form, the Prime Minister, faithful to its new line of conduct, has endeavoured to low profile. After the travel by bus with all of his ministers, he merely a concise preliminary intervention effect of style, and is is kept commenting on the results obtained with emphasis. "I am aware that we are still far from complete, that much remains to be done", has taken care to clarify.

Ambition found

Yet, under this speech smooth, pierces the renewed ambition. Worn by the descent of the rate of unemployment to 8.9 in July, the Prime Minister is fixed as "next frontier" back in the 2 million unemployed. To achieve this, it has on the new plan, submitted yesterday by the Minister of employment, Jean-Louis Borloo. This "third stage" of the battle for the job must be to tackle the most resistant pockets of unemployment. "It must ensure that everyone can actually take the train of employment: small business, territories, young people and long-term unemployed", summarized Jean-Louis Borloo. He received the arbitrations to give a blow of accelerator tools put in place two years ago: future contracts, contracts for insertion in the social life and learning in the public service.

Beyond these measures, companies retain especially the deletion, to July 1, 2007, all employer contributions social security at the level of the SMIC, in companies of less than twenty employees. "It is fashionable to lower social charges", welcomed Laurence Parisot (Medef), while the CGPME "approve without reservation". This relief is criticised by the unions, who see it as a strong incentive to make wages down. Most importantly, this risk, by creating a "threshold effect" (see below), to curb the growth of SMEs.

In the immediate future, the bet is that this perspective will help to give a new boost to hiring in these small businesses which derive the creation of posts. The Government also enhances its employment forecasts: Thierry Breton, Minister of the economy, now provides 250,000 net creations this year, 200,000, and 80 per cent in the private sector.

Release the pressure

This beautiful enthusiasm is not shared by the unions. Secretary General of FO, Jean-Claude Mailly is "reserved" on these forecasts, given "the weakness of growth and the fragility of consumption". And, while welcoming "good news", his counterpart from the CFDT François Chérèque, questioned the "sustainability" of improving the economic situation and employment. But it would take more to begin the optimism of a Government who think if re-pledged be sufficient margins for manoeuvre in order to release the pressure on spending without compromising declining deficits. Dominique de Villepin it is defended, yesterday, to yield to "ease" but between the grant of 500 million additional euros to the premium for employment in the 2007 budget and the 370 million cost, next year, the new expenses decrease, it is well to what looks like re-entry. The tone is no longer that prevailed at the beginning of the year, when, before the first Conference of public finances, it is prohibited any tax cut not funded and arose as a model of budgetary orthodoxy.

All measures announced since Monday and the reform of the tax on the income passed last year, or between 6.5 and 7 billion euros, will be financed by"savings", attempted to reassure Thierry Breton arguing the 1 decline in the volume of the 2007 budget expenditures. The argument does not, since this decline to the best of 3 billion. Will he need therefore well almost all of the tax revenue by the growth. "In these circumstances, calculates Gilles Carrez (UMP), rapporteur of the commission of Finance of the Assembly, I do not see how it can reduce the budget deficit," voted to 46.9 billion in 2006. But the Government is not consistent. "My objective is to bring him back to 43 billion euros in the 2007 budget", said however in "Echoes", the Minister of the Budget, Jean-François Copé.