French government predicts rosy future (in 2025)

Associated Press
French President Francois Hollande, center, and government members, sit, at the start of a government seminar held at the Elysee Palace in Paris, Monday Aug. 19, 2013. From left: education minister Vincent Peillon, businesswoman Anne Lauvergeon, Francois Hollande, foreign minister Laurent Fabius, justice minister Christiane Taubira, interior minister Manuel Valls and employment minister Michel Sapin.(AP Photo/Remy de la Mauviniere/Pool)
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PARIS (AP) — Full employment, plenty of cheap housing, a new Industrial Revolution and Police 3.0. Those are the French government's predictions for the year 2025.

Leaders in the Socialist administration, who are under criticism for the struggling economy and rising joblessness, met Monday to discuss the way forward. Grappling with an 11 percent unemployment rate, high taxes, and a declining industrial sector, they looked to better times in the future — the distant future.

"The countries that succeed are those that look ahead," said Prime Minister Jean-Marc Ayrault. "France has been lagging in a globalized world and at times has doubted its future."

There were skeptics.

"Voila, a government aware of its inabilities and weaknesses that is trying to cover them up by conjuring up dreams of a radiant future," said Roger Karoutchi, of the conservative UMP.

Here are some of their predictions, coupled with a more sober look at reality:

UNEMPLOYMENT

Pierre Moscovici, the finance minister, predicted anyone who wanted a job would have one: "Full employment is a realistic goal."

But France's unemployment has been historically high — it hasn't fallen below 7 percent since 1983 — due partly to rigid labor laws that increase the costs of hiring and firing.

And the trends aren't promising: independent experts believe unemployment will actually rise over the next 18 months. The French Observatory for Economic Forecasts predicts it will increase to 11.6 percent by the end of 2014, while the OECD, a global economic think tank, expects a somewhat more optimistic 11.2 percent.

The government reached a compromise in January with unions and employers designed to relax some of the labor market regulations, but the International Monetary Fund said recently that "significant avenues for reform remain."

HOUSING

Renting or buying in France is a tangle of high prices and red tape. The country that came up with the word "bureaucracy" has elevated it to an art form when it comes to housing. Much as employers are loathe to hire because it is so hard to fire, landlords are reluctant to rent because it is so hard to evict tenants who stop paying.

Housing Minister Cecile Duflot, whose office has records pre-dating the Black Plague in the 14th century, wants to build 6 million new homes by 2025, with one-third of them subsidized. She predicted on Monday that future homes would be plentiful and affordable, and hunting for a new one would become "a pleasurable stage of life."

France's efforts to tame public spending and reduce its budget deficit threaten those plans. Although Paris — France's largest population center by far — has several projects under construction, it's nowhere near the amount needed under Duflot's 2025 projection.

PUBLIC SAFETY

Manuel Valls, France's top security official, offered this prediction: "A police force that reflects the evolution of society, with the advantage of new technology — I'm talking about a police 2.0, even 3.0 — but also a force on the ground."

The government has used technology to its advantage in recent months, most especially in the field of DNA identification, which Valls said helped locate a militant accused of stabbing a soldier within days of the attack.

But the police are mainly struggling with the non-technological side of public safety. Relations are tense with the growing Muslim population, especially in the suburbs on the outskirts of Paris, where riots have erupted in recent years. Earlier this summer, a police station was torched and about 250 people clashed with riot police in Trappes.

INDUSTRY

Arnaud Montebourg, a minister who has campaigned relentlessly — although not often successfully — to keep factory jobs in France, said he expects industry to make up 20 percent of annual gross domestic product by 2025.

French industrial jobs have been in steady decline for years — in the past decade one in six manufacturing jobs has been lost, and the sector now makes up about 10 percent of GDP.

Industrial production dropped 1.4 percent in June. Investment firm Natixis says that without major reforms "factory employment continues to decline and the same goes for the overall sophistication of jobs."

Economists say France won't be able to attract industry until it solves its competitiveness problem: Labor costs are too high, red tape too restrictive, and it is too hard to convert a lab discovery into a profit.

Despite the skepticism that Monday's forecasts drew from opposition and businesses, Ayrault argued it was vital for France to aim high.

"France has been lagging in a globalized world and at times has doubted its future," he said in a televised address Monday. "If we don't have ambitious goals, we won't advance."

Medef, France's biggest business lobby, applauded the ambition but said the seminar fell short by failing to invite the private sector.

"Only private enterprise, entrepreneurs and their teams are able to return our country to a dynamic of growth and jobs," the group said in a statement.

The counterproposal? A seminar next week with projections to 2020.

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Follow Lori Hinnant at https://twitter.com/lhinnant

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