With French Election Over, Unions Fear Layoffs

As presidential rivals debated the roots of unemployment during the recent campaign, many companies held off on announcing job cuts to avoid inflaming an already fraught political issue. But now that voters have chosen Socialist François Hollande over center-right President Nicolas Sarkozy to be their next president starting on Tuesday, labor unions say many large French companies are preparing to announce large layoffs in the weeks and months ahead, The Wall Street Journal reported. Any spate of layoffs would aggravate the state of the French economy, Europe's second largest, and pose an additional challenge to Mr. Hollande, who has made reversing the country's rising unemployment a top priority. The jobless rate has climbed to a 13-year high of 10% and the Bank of France predicted Thursday that the French economy would stall in the year's first half, after expanding 1.7% last year. A wave of job-cut plans could also spark labor tensions and complicate Mr. Hollande's pledge to foster a constructive dialogue between union and business leaders, as Germany has done more successfully. France's high and rising jobless rates highlight the diverging paths of the French economy with that of its stronger German neighbor, where unemployment has fallen to 6.6%, helped by more flexible, government-sponsored labor arrangements between government and labor. Read more. (Subscription required.)