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ECONOMICS

Minister: 35-hour week not working in France

France's Economy Minister Emmanuel Macron took aim at France's 35-hour working week on Thursday, saying the Socialists were wrong to think life would improve if people worked fewer hours.

Minister: 35-hour week not working in France
French Economy Minister Emmanual Macron. Photo: AFP
The 37-year-old Macron, a former banker, kicked up a storm with his views on France’s famous 35-hour working week at a conference for the Medef employers' association on Thursday.
 
His comments, which echoed similar sentiments from an interview almost exactly a year ago – made a splash across front pages of French newspapers on Friday. 
 
“The left was wrong to think that France would improve if people worked less. It was a false idea,” he said during his closing statement at the conference. 
 
He added that “one shouldn't ask what your country can do for you, rather what you can do for your country's economy”.
 
Supporters say the flagship policy of the French left creates jobs by limiting the amount of time employees are allowed to work, thereby encouraging companies to take on more staff.
   
But critics at home and abroad say it is an inflexible law that hampers business and creates a bloated workforce.
 
France's Prime Minister Manuel Valls stepped in on Friday to say that there were no proposed changes in store for the 35-hour week. 
 
“The real issues are employment and growth. Small comments harm public life,” he added, while Macron himself said he was not talking specifically about the 35-hour week but of work in general.
 
The 35-hour week was created under former Socialist Prime Minister Lionel Jospin in 2000, who said at the time that: “One makes more, while working less”.
 
While Jospin's supporters marvelled at the humane piece of economic policy that was introduced in 2000, his critics, both in France and beyond its borders, have continued to argue the now sacred 35-hour week acts as a jobs-killer and a brake on the economy.
 
Numerous exceptions in reality mean the 35-hour week applies to slightly less than half of French workers, and does not include managers. 
 
Reports in recent years have found that French workers put in as much as 39.5 hours of work a week, slightly behind the EU average of 40.3 hours.
 
Macron, a former advisor to President François Hollande and close ally of head of state, is seen as responsible for Hollande's shift towards a more liberal economic policy.
 
He was drafted in to the government last year to replace left-wing rebel Arnaud Montebourg and has been tasked with pushing through the president's reforms and shaking up the rigid labour market.

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MONEY

German shops hit by supply problems ahead of festive season

Germany's business climate worsened in October for the fourth month in a row as supply chain woes weighed on the country's export-driven economy, according to survey data published Monday.

A man walks through the MediaMarkt carpark
A man walks through the carpark of MediaMarkt in Eschweiler, North Rhine-Westphalia. Photo: picture alliance/dpa | Henning Kaiser

The Ifo institute’s closely watched indicator fell to 97.7 points in October from 98.9 points in September, its lowest standing since April, as businesses in Germany were hit by supply chain fears. 

“Supply problems are giving businesses headaches,” Ifo president Clemens Fuest said in a statement, describing the bottlenecks as “sand in the wheels of the German economy”.

The upheaval caused by the pandemic has given rise to global shortages in everything from timber to semiconductors and plastics.

Germany’s key automotive sector has been hit hard by a lack of computer chips, a key component in both conventional and electric vehicles, forcing several German carmakers to pause production.

The news comes after German shops aired concerns that popular Christmas gifts could be short supply when the festive season rolls around.

A recent survey of retailers conducted by the Ifo Institute revealed that 100 percent of bicycle shops were facing supply issues, while the vast majority of furniture, electronics and DIY stores were also struggling to replenish stocks.

In particular, the shortage of chips is expected to have a knock-on effect on the availability of laptops and smartphones. Economics experts believe the issues with electronics and cars could continue until at least 2023. 

READ ALSO: Why everything is suddenly getting so expensive in Germany

Only in construction did the business climate improve, according to the Ifo survey, while sentiment in manufacturing, services and trade deteriorated.

Growth could be “much weaker” in the coming months, according to Fritzi Koehler-Geib, chief economist at German public lender KfW.

“Material bottlenecks and disruptions in the global transport system have been a burden for longer than originally expected and will probably only ease in the coming year,” Koehler-Geib said.

Earlier this month, German economic institutes, including Ifo, revised down their forecast for growth in 2021 due to global supply chain disruptions to 2.4 percent from their earlier prediction of 3.7 percent made in April.

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