France's Hollande warns economy to stall in 2013
Monday, September 10, 2012
PARIS (AP) — French President Francois Hollande is blaming a worse-than-expected economic slowdown for new cuts in the government's growth forecast.
Speaking Sunday in a televised interview on French channel TF1, Hollande said gross domestic product growth will be "barely" above zero this year and only 0.8 percent in 2013. His Socialist government had previously predicted 1.2 percent growth for next year.
Hollande also is pledging to forge ahead with a controversial plan to raise income tax on France's wealthiest citizens to 75 percent.
He said he expects to unveil proposals for lifting France's growth and ability to compete by the end of the year, with the results expected to be felt in 2014.
One area that could see reforms is labor market flexibility.
The president said his goal was to reverse France's rising unemployment trend by the end of next year. Overall unemployment in France is now at 10 percent, but it is 22.8 percent for those under 25. French employers are especially reluctant to hire young people because restrictive labor laws make it very hard for companies to lay off new employees.
Last week, the Organization for Economic Cooperation and Development warned that Europe's debt crisis is pushing the entire 17-country eurozone toward recession and dragging down the global economy with it.
Hollande admitted the economy was "even worse than I anticipated because of the aggravation of the crisis," but pledged that by the end of his term in 2017, "the French will be able to say we live better than in 2012."