Hollande says France in state of economic emergency

President Francois Hollande has set out a €2bn (£1.5bn) job creation plan in an attempt to lift France out of what he called a state of "economic emergency".

Under a two-year scheme, firms with fewer than 250 staff will get subsidies if they take on a young or unemployed person for six months or more.

In addition, about 500,000 vocational training schemes will be created.

France's unemployment rate is 10.6%, against a European Union average of 9.8% and 4.2% in Germany.

Mr Hollande said money for the plan would come from savings in other areas of public spending.

"These €2bn will be financed without any new taxes of any kind," said President Hollande, who announced the details during an annual speech to business leaders.

"Our country has been faced with structural unemployment for two to three decades and this requires that creating jobs becomes our one and only fight."

France was facing an "uncertain economic climate and persistent unemployment" and there was an "economic and social emergency", he said.

Scepticism

The president said recently that the country's social emergency, caused by unemployment, was as serious as the emergency caused by terrorism.

He called on his audience to help "build the economic and social model for tomorrow".

The president also addressed the issue of labour market flexibility.

"Regarding the rules for hiring and laying off, we need to guarantee stability and predictability to both employers and employees. There is room for simplification," he said.

"The goal is also more security for the company to hire, to adapt its workforce when economic circumstances require, but also more security for the employee in the face of change and mobility".

However, the BBC's Paris correspondent Hugh Schofield said there was widespread scepticism that the plan would have any lasting impact.

"Despite regular announcements of plans, pacts and promises, the number of those out of work continues to rise in France.

"With a little over a year until the presidential election in which he hopes to stand for a second term, President Hollande desperately needs good news on the jobs front. But given the huge gap so far between his words and his achievements, there is little expectation that this new plan will bear fruit in time", our correspondent said.