Jospin to pay firms that cut working week to 35 hours

The French government plans to subsidise companies which move rapidly to a shorter working week, so long as they create new jobs.

The Prime Minister, Lionel Jospin, made this promise yesterday in an attempt to extricate himself from an earlier promise: that he will impose a 35-hour week within the next five years.

He was speaking at the start of a conference of government, employers and unions on unemployment at the official prime ministerial residence in Paris.

Employers' federations have rejected the Socialists' original campaign promise - a reduction in statutory working hours from 39 hours to 35 without loss of pay - as economically suicidal. Mr Jospin, in government, has come around to their point of view.

But the main union federations went to yesterday's meeting still insisting on the spirit, if not the letter, of Mr Jospin's election pledge. Left- wing elements of his own coalition government are also insisting on a rapid move to a 35-hour week. The prime minister said yesterday that he would decide how to square this circle after he had heard all sides speak at the conference. He said that he intended to bring forward a framework law which would "launch the movement" towards a shorter working week.

However, he hinted that this would, at least at first, be voluntary.Those companies which took the lead, and created new jobs, would be eligibile for "financial aid to diminish labour costs".

The economics of this new idea appeared strange, to say the least. Even left-leaning French economists and commentators have poured cold water on the original suggestion that a shorter working week will create jobs. Now Mr Jospin seemed to be saying that public finances, already under great pressure to meet the guidelines for a single currency, would be used to "buy" reduced working hours.