Francois Hollande says France is in 'state of economic and social emergency' as he unveils €2bn employment drive

Critics dismiss plan as attempt by President to save his own job by artificially reducing the number of those out of work

Mr Hollande dismissed suggestions his plan was merely cosmetic in a New Year address to business leaders (AP)

President François Hollande has declared France to be in a “state of economic and social emergency” and unveiled a €2bn plan to attack the country’s stubbornly high jobless rate.

Critics dismissed the plan – including 500,000 new training places – as an attempt by President Hollande to save his own job by artificially reducing the number of those officially out of work.

The president has repeatedly said that he will not run for a second term in the Spring of next year unless he can “reverse the trend” of unemployment.

In a New Year address to business leaders, Mr Hollande dismissed suggestions that his plan was merely cosmetic and politically motivated. He said that the country was facing an economic emergency just as serious as the legal “state of emergency” declared after the jihadist attacks in Paris in November.

France must adapt itself to a changing world, he said, avoiding “free market dogma without a conscience and immobilism withthout a future”.

Although the French economy is expected to grow by around 1.2 per cent this year, Mr Hollande said that this was insufficient to reduce an unemployment rate which has been anchored at just over 10 per cent for years . Emergency action was needed to prevent a social catastrophe, he said.

Critics on both Right and Left said that the measures he went on to announce failed to match his rhetoric.

There will be 500,000 new training places for workers whose skills are no longer needed in the digital economy. If the plan succeeds, this will sharply reduce the “apparent” total of unemployed, now standing at around 5,700,000.

There will also be an attempt to boost flagging apprenticeships and new incentives to small employers to hire young people.

The government had been under pressure from employers and the centre-right opposition to relax France’s hiring and firing laws and its 35 hour working week. Mr Hollande announced only marginal changes.

There will be greater freedom to negotiate monthly or annual work patterns within the 35 hour week framework Penalties for breaking contracts will be reduced.

Jean-Christopher Lagarde, leader of the centrist UDI party, accused Mr Hollande of a “shameful exercise in camouflaging the unemployment figures”.