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30 August 2012 10:11
The French government has announced that it is to combat unemployment by subsidising 100,000 new jobs for young people next year in the hope of reducing unemployment.
The country's overall unemployment rate is 10%, but this rises to 22.8% for those under 25 as labour laws make it extremely difficult for companies to lay off new employees.
Under the plan, unveiled at a cabinet meeting, companies that hire people between 16 and 25 for at least a year will only have to pay 25% of their salary.
The government estimates that the plan will cost Eu2.3 billion (£1.8 billion) in 2013 and it plans to add another 50,000 contracts in 2014.
The proposal needs to make its way through parliament, but Francois Hollande's Socialist Party has a solid majority there and the issue was a major campaign promise. He has staked his credibility on driving down unemployment and encouraging growth whilst meeting strict budget deficit targets.
