French jobs: malade sets in Appointing a human relations executive - Stéphane Roussel - to run France's second largest mobile phone service might seem bizarre. But Vivendi's SFR is mired in a domestic price war and desperately needs to cut costs and jobs. It is not alone in the country. At carmaker Peugeot - thought to be preparing for the first French assembly plant closure in two decades - unions fear 10,000 jobs could be culled this year. At Air France-KLM, the plan is to lose 5,000 jobs over the next 18 months. France's unemployment rate is already 10 per cent, compared with under 8 per cent in 2008. In spite of a new worker-friendly president, the rate may well trend higher. The jobs malaise is sadly inevitable. France's economy is still in better shape than many peers" - although public debt is approaching 90 per cent of gross domestic product and growth this year will be minimal. But there has been a steady, serious deterioration on the competitiveness front. A current account surplus, which exceeded 3 per cent of GDP in 1999, had turned into a 2.7 per cent deficit by 2011. International Monetary Fund staff estimate that 2.5 percentage points of world export market share has been lost over the past decade. This is blamed less on unit labour costs - bettered by Germany but nothing like as bad as in Italy or Spain - and far more on labour market rigidities. France has some of the strongest protections in Europe according to the OECD, and a notably high minimum wage. To date, there is no sign that the new government intends to tackle this problem: rather ministers talk of enhanced job protections. So that leaves companies to tread delicately as they seek workforce deals. And the problems are not just procedural: a big restructuring at France Telecom between 2006 and 2008 was accompanied by a tragic spate of suicides, prompting much high-profile debate about workplace stresses. Perhaps the choice of Mr Roussel, a psychology college graduate, is not so odd after all.