Cut holidays to create jobs: French business chief

France's situation is 'urgent': MEDEF

The head of MEDEF, France's leading business lobbying group, unveiled a controversial plan on Wednesday to kick-start job creation and economic growth in his unemployment-ridden country.

In a proposal aimed at creating 1 million jobs, MEDEF President Pierre Gattaz advised the French government to consider cutting bank holidays, among other measures.

The French "are really ready for reforms now", Gattaz told CNBC from the sidelines of the MEDEF conference in Paris on Wednesday, at which the group launched its "One million jobs" proposal.

"They are anxious about labor, about losing their jobs and about the really slow growth in France," added Gattaz.

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Cutting two of France's 11 bank holidays could extend the annual working week by 1.2 days, adding around 0.9 percent to French gross domestic product (GDP), estimated MEDEF. It also forecast that cutting these two holidays could create 100,000 jobs.

MEDEF also advised the government to review its 35-hour working week law that sets the maximum number of hours that people can work. Instead, businesses should be allowed to negotiate the number of hours that employees work, Gattaz said.

While unemployment remains very difficult to contain. In July 2014, it increased on the month to 10.3 percent from 10.2 percent the previous month.

Other proposals include pushing back retirement age, opening businesses in the evenings and on Sundays and allowing the exploitation of shale gas.

"Social laws in France are still very complicated so we have to simplify them," Gattaz told CNBC.

Unemployment hit a record high in France in July. Official statistics from the Labor Ministry showed unemployment climbed during the month to 10.3 percent from 10.2 percent in June. Meanwhile, economic growth remains stagnant, with the country's economy flatlining in the first half of the year.

However, MEDEF's proposals are likely to meet fierce political opposition. The 35-working hour week, implemented in 2000 by the then-Socialist government, is seen by some as untouchable. When the new economy minister, former Rothschild banker Emmanuel Macron, showed willingness to scrap the law, he was quickly shot down by the government.

Fresh week of woes for France

On Wednesday, MEDEF said its proposals would support President Francois Hollande's Responsibility Pact. The Pact was unveiled by Hollande earlier this year and is designed to slash labor costs by 40 billion euros ($51.3 billion) over the next three years and to boost business competitiveness.

"This (Pact) goes in the right direction" said Gattaz, "But it is not enough, we should do more and this has to happen".

According to MEDEF, French labor costs are among the highest in Europe due to high social security costs for employers, the high minimum wage ($12.24/per hour) and the low number of hours worked. The average French full-time employee worked 1,661 hours in 2013, compared to 1,847 hours in Germany and 1,900 hours in the U.K., according to European Commission figures.

In a report detailing its "One million jobs" proposals, MEDEF said it was aware some of its suggestions would prove controversial.

"We entrepreneurs know that several of our proposals will be criticized, caricaturized, misrepresented. We know our country's quirks, its immobilism maintained by some of its elites, its taste for controversy and its fear of change," the business group wrote.

Gattaz told CNBC: "The MEDEF is pushing hard the government and unions to move ahead in order to have a France which has to win, which will win."

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