Juppe tries economic kick-start

The French Prime Minister, Alain Juppe, yesterday set out a programme of measures to stimulate the economy and meet concern about unemployment. It was his opening gambit at the "social summit", the round-table discussion intended to end more than a month of industrial turbulence and economic paralysis.

The summit, bringing together ministers, employers' representatives and trade union leaders, was one of the conditions set by the trade unions for ending their strikes and protests against Mr Juppe's plan for welfare reform. While repeatedly offering opportunities for further dialogue, however, Mr Juppe proposed nothing that altered the welfare reform, resisting strong pressure even from members of his own party and government to delay a controversial new tax.

He said he was asking his Economy Minister, Jean Arthuis, to pursue four priorities: to release savings and increase consumer spending; to support house-buying and selling; to relieve the burden of personal taxation and social charges and to impose a moratorium on deductions from pay, but only once the welfare-reform legislation was in place.

This includes a 0.5 per cent tax on all income, to be levied from 1 January, which is earmarked to pay off the accumulated debt of the current health and social security system.

Mr Juppe also promised working parties to meet between now and the summer to plan measures on youth employment, family policy and working hours.

The proposals, which relied heavily on provisions and agreements broached earlier in the year, conformed to Mr Juppe's technique of intricate categorisation, making ministers figure out how to implement tricky policies and postponing difficult decisions by delegating them to working parties. Trade union leaders who had demanded "immediate"and "concrete" measures were likely to be disappointed. They already were unhappy with the timing of the meeting, fixed by Mr Juppe for 3pm on what for many was the last working day before the Christmas holiday, fearing the "summit" would be little more than a media event offering no long-term solution to anything.

In demanding a "social summit" in the first place, the trade unions had in mind the emergency round-table of May 1968, which produced the "Grenelle accords", a series of agreements substantially raising the minimum wage, increasing pay across the board and reducing working hours. Although the accords did not end the revolt of 1968, and arguably precipitated the devaluation of the franc a year later, the Grenelle meeting is seen by union leaders as one of their finest hours.

Well aware of the parallel, Mr Juppe had denied his "social summit" was in any way a "Grenelle-2" and tried to limit the agenda to employment. His office even preferred to call the meeting a "jobs summit". Disunited and concerned that the strikes could end of their own accord, the more militant trade union leaders chose to ignore this discrepancy in their haste to claim victory.

Marc Blondel, for the Force Ouvriere, who had emerged as one of the leaders of the strikes, said before the meeting that he would raise the subject of the welfare plan whether it was on the agenda or not. Louis Viannet, the leader of the other militant union, the CGT, said he was prepared to negotiate all night if it would make any difference. Only Nicole Notat, of the more moderate CFDT, who has generally been more sympathetic to the concept of Mr Juppe's reforms, was prepared to discuss employment alone, especially in the context of reduced working hours.

While there was always the risk that yesterday's "summit" would founder on the diplomatic compromises that had brought it into being, a truce was expected to be reached, if nothing else. The unions needed a truce to bring honour to the return to work; the employers needed one to recoup some of their losses from the past month, and the Mr Juppe needed one to salvage something of his battered authority.