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France's Hollande says to take 'any risk' to bolster growth

Published 05/01/2015, 10:41
© Reuters. France's President Francois Hollande attends the recording of his New Year's speech at the Elysee Palace in Paris

PARIS (Reuters) - President Francois Hollande said on Monday he would take "any risk" to boost French economic growth above the government's forecast 1 percent in 2015, in a bid to cut unemployment with help from economic reforms.

Hollande said he would continue to pursue growth via economic reforms despite very low approval ratings and two local elections coming up in March and December of 2015 where his Socialist Party is expected to receive a drubbing.

"I was elected on change: I will change everything that blocks, that hinders, that brakes and hampers equality and progress," he told France Inter radio. "On this point, I will take any risk."

He said he would do his utmost to make growth as high as possible in 2015 and 2016, adding that with more people entering the job market than leaving it, growth of over 1 percent was necessary to reduce unemployment.

The government forecasts growth will rise to 1.7 percent in 2016.

Unemployment stood at a record 3,488,300 in November, up 5.8 percent on the year. The jobless rate was 10.4 percent in the third quarter.

France, which has long suffered weak growth and high unemployment, is seen enjoying a modest recovery this year thanks to lower oil prices, cheap borrowing rates and a lower exchange rate for the euro.

Hollande economic reform programme has included relatively minor changes to the job training system and hiring and firing rules, as well as measures to free up competition in protected job sectors.

The latter reform comes up for debate in parliament later this month and is likely to face tough opposition from the Greens, who left the government last year.

Hollande said that if France exceeded its growth target, any excess revenue would be used mainly to cut the budget deficit and not to lower taxes.

© Reuters. France's President Francois Hollande attends the recording of his New Year's speech at the Elysee Palace in Paris

France has fallen behind several times on its commitment to the European Commission to bring its budget deficit under three percent of gross domestic product, pledging last year that it would reach the target by 2017.

(Reporting by Elisabeth Pineau, Andrew Callus and Nick Vinocur; Editing by Richard Borsuk and Jon Boyle)

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