New minister of Productive Recovery Arnaud Montebourg Faces His First Challenges

Arnaud Montebourg, Productive Recovery Minister.
Photo: Flickr.com/jyc1

Arnaud Montebourg, Minister for Productive Recovery for Hollande’s new cabinet, is now facing one of the most important challenges of the presidency. The Confédération Générale des Travailleurs (CGT) or “General Confederation of Workers”, an important union which traditionally leans left, has revealed its demands to the new minister and has asked him to find solutions for the supposed redundancy plans to come.

On Saturday, May 26th, Arnaud Montebourg, told the Agence France Presse that he intended to propose a plan to the Prime Minister “to take back the industrial sector” in the weeks to come. He asserted that, “there are a lot of entrepreneurs and workers who need a policy of industrial patriotism, where we gather around our industrial working tools, our economic strength, to rebuild our lost strength.”

This declaration came just one day before another declaration from the CGT on May 27th that it would give the new minister some akin to a  blacklist of 46 companies and factories that are allegedly planning to fire employees en masse , threatening approximately 45,000 jobs. The union accused the previous government of hiding this information in order to avoid new socio-economical scandals.

Nevertheless, Laurence Parisot, leader of the Movement of the French Enterprises (MEDEF) rejected those accusations, asserting that there were no more redundancy plans this year than last year, therefore denouncing a purely political and strategical gesture from the CGT. According to Parisot, who is referred to as “the boss of all bosses”, the cuts are the natural consequence of France’s lack of competitive advantage.

Arnaud Montebourg’s Ministry of Productive Recover has been specifically designed to tackle the economic downturn, and direct France on the road to industrial and economic recovery. Over the last few years, many integral companies as well as many smaller businesses, have closed their doors or left the country, increasing the unemployment rate for the entire country.

Former President Nicolas Sarkozy’s administration also put blame on the decreased competitiveness in France and sought to lower the cost of production with the hopes of attracting companies and preventing more from leaving. During his campaign, President François Hollande asserted that the economy needed a more aggressive policy and that measures needed to be taken on a broader scale. He rejected the idea that lowering the cost on production by reducing certain taxes was sufficient to counterbalance the economic threat of competitors like China.

As the candidate for the Parti Socialiste (PS), Hollande also naturally advocated for a social perspective on unemployment and industryl, refusing to give up on more traditional characteristics of the French system . For example, Sarkozy’s government raised the retirement age 62 from 60. Hollande has not indicated that he intends to repeal the reform entirely, but wants there to be a stipulation that people who began working at a  young age, around 18, to retain the option of retirement at 60. This decision would come come with a cost, which the opposition was quick to point out.  Parisot believes that the government needs to give a new incentives for hiring instead of putting more weight on companies by raising social costs.

This is a key moment for Hollande, his Prime Minister Jean-Marc Ayrault, and their cabinet. They all need to prove that, as a government, they have the ability to face industrial issues and tackle unemployment.  Hollande needs to show that he is a leader who has both social and economic credibility.  Much of Hollande’s ability to implement his ideas for recovery rests in the legislative elections and whether the PS will win a clear majority in the National Assembly.  The legislative elections are to take place in June.

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