FRANCE ANNOUNCES PLAN TO BOOST EMPLOYMENT

  The government announced a three billion
  franc program to combat long-term unemployment amid speculation
  among political and economic analysts that it is positioning
  itself for a period of economic reflation.
      The package presented to the cabinet of Prime Minister
  Jacques Chirac by Social Affairs and Labour Minister Philippe
  Seguin today is to be financed out of a 7.5 billion franc
  contingency fund announced on February 25.
      Finance Minister Edouard Balladur previously ruled out a
  reflationary program.
      Long-term unemployment, defined as being out of work for
  more than one year, affects about 830,000 people or one third
  of French unemployed, government figures show.
      The main measures of the employment program give employers
  financial incentives to offer short-term work contracts of at
  least two years and stress retraining to help the long-term
  unemployed return to the labour market.
      Training subsidies and exemptions from social security
  contributions are the main incentives for employers.
      "Companies tell us that we have to give them a strong
  incentive to take on people who have fallen out of the labour
  market and that's why the proposals...Are costly," an aide to
  Seguin said.
      The analysts said speculation the government is considering
  a reflationary program was sparked by Chirac spokesman Denis
  Baudouin, who said yesterday that ministers were generally
  agreed on the desirability of relaunching the economy.
      He appeared to contradict statements by Balladur ruling out
  economic stimulation despite the government's revision of its
  1987 growth forecast to about 2.0 pct from 2.8.
      Finance ministry officials later clarified Baudouin's
  remarks, saying there was no question of any move to stimulate
  the economy through a boost to consumer spending although
  government policy allowed for increased industrial investment
  from the proceeds of France's five-year privatisation plan.
      The 1987 budget allowed for 30 billion francs in revenue
  from privatisation, to be split between repaying national debt
  and providing state enterprises with fresh capital.
      Some political analysts said Baudouin's comments possibly
  reflect widening differences within the RPR-UDF coalition on
  social issues ahead of next year's presidential elections.
       Divisions began to show last December, when a wave of
  strikes led by transport workers paralysed the country and
  drove the government into a new mood of conciliation with
  labour.
       Officials said that after the success of the privatisation
  of Cie de Saint Gobain &lt;SGEP.PA> and Cie Financiere de Paribas
  &lt;PARI.PA> the government had decided to speed up its five-year
  privatisation program with the aim of completing a third of it
  this year, ahead of the presidential elections expected in
  1988.
      The accelerated program could provide additional unbudgeted
  revenue to boost industrial and research investment and
  spending on infrastructure such as the national motorway
  network.
     The government also today revived a proposal, blocked last
  year by Socialist president Francois Mitterrand, to encourage
  more flexible working hours, which it says will boost jobs by
  improving the competitiveness of French industry.
      The proposals allowing night-shift work by women and
  variations in the standard 39-hour working week are to be put
  to parliament as a self-contained draft bill after being vetoed
  for procedural reasons by Mitterrand and later the Council of
  State.
  

