Chirac puts jobs on summit agenda

As the city of Lyon made its final preparations yesterday for receiving the leaders of the world's richest nations at the annual summit of the Group of Seven industrialised countries, France underlined its desire to see two subjects figure prominently in the discussions: aid to less developed countries, and unemployment.

The first is an interest and alignment it shares with Japan and Canada; the second, however, reflects a large element of domestic political self- interest. For France, unlike Britain and the United States, still faces an acute unemployment problem, and one which seems not to be responding to government-prescribed treatment.

Official figures announced this week showed that unemployment in April rose to the second-highest level ever, with some 3.15 million people, or 12.3 per cent of the population of working age, now registered as unemployed.

On Tuesday, the defence ministry announced that the naval dockyards are to lose more than 6,000 jobs - around a quarter of the workforce - by the end of 1998, as a result of cuts in government defence spending and plans for restructuring the defence sector.

The Defence Minister, Charles Millon, yesterday repeated a pledge he gave a month ago, that there would be no compulsory redundancies. The cuts will none the less severely hit the ports of Brest and Cherbourg. An MP for a northern French constituency, Yves Bonnet, staged a sit-in through the night at the defence ministry in protest against the cuts.

The hitherto protected defence sector is not the only area where jobs are being lost. Earlier this week the troubled bank Credit Lyonnais announced it was to shed more than 6,000 jobs. The building industry has also announced large-scale cuts, because the housing market has failed to pick up significantly, despite a series of government incentives.

To France's few out and out free-marketeers, the current wave of job losses is a sign that French industry may finally be grappling with the overmanning and inefficient job practices that have sapped profitability. In France, however, there is a fear that the cuts will not only reflect poorly on a government pledged to reduce unemployment, but could sap morale and impede the long-heralded recovery.

Which is why President Chirac is so keen to ensure that unemployment and possible remedies figure prominently at Lyon, even though he risks a lecture from the Americans and the British about the high price of labour in France and the conservatism of the French labour market.