Jospin switches back to interventionist economy intervenes on jobs

NOT SO MUCH a graceful manoeuvre, more a political hand-brake turn. Two weeks after stating on television that his government could no longer "administer" the economy, the French Prime Minister, Lionel Jospin, announced measures to discourage part-time jobs and punish "unfair" redundancies.

His promises, made to Socialist MPs, senators and MEPs yesterday at a party gathering in Strasbourg, followed a fortnight of confusion and anger in his Socialist, Communist and Green coalition. Having startled his supporters with a rhetorical bow to the Blairist centre two weeks ago, Mr Jospin has been forced to appease his coalition by lurching to the left.

In a politically disastrous television interview on 13 September, Mr Jospin said he was "shocked" by the plans of the French tyre giant, Michelin, to sack 7,500 employees - despite record profits - but he could do nothing. The days were gone, he said, when a government could "administer" or micro- manage the French economy. In the same interview, he rejected as "unhelpful" plans floated by his Employment Minister, Martine Aubry, to punish companies that made widespread use of part-time or short-contract employees.

Yesterday Mr Jospin said his government planned to do just that. Firms that have a big proportion of "precarious" jobs on their payroll would be forced to pay a higher rate of unemployment insurance.

He also announced that his government would impose financial penalties, such as higher unemployment contributions and lower redundancy subsidies, on companies that fired workers while in profit. This will probably be too late to discourage the Michelin redundancies but it will appease Socialist MPs and quieten their Communist allies, who had seized with joyous anger on Mr Jospin's apparent conversion to tooth-and-claw capitalism.

These have been an awkward couple of weeks for Mr Jospin, all the more so for coming out of what seemed a cloudless sky. The French economy is booming and creating more jobs than any other European country. The Prime Minister's television appearance on 13 September was supposed to be part of a series of events to celebrate these facts; to set out the government programme for the next two to three years; and to define Mr Jospin's policies as more successful and more socialist than those of Tony Blair.

What he actually said - that in a world of global markets, it is no longer possible for a government to second-guess decisions by private companies - would pass without notice in most countries. In France, it fed a growing debate about the influence of foreign capital on French business decisions.

The Michelin announcement was presented in France as a triumph of shareholder greed over jobs. Little attempt has been made, even on the right, to point out that the foreign holdings are an investment in France, which help to explain the country's boom.

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