France's stagnant economy has thwarted most of President François Hollande's economic plans, leaving him reliant on state-sponsored jobs to deliver his key remaining objective: curbing rising unemployment by the end of the year, The Wall Street Journal reported. A primary vehicle for government efforts to buoy the job market is the financing of up to 75% of the cost of thousands of jobs for young, low-skilled workers. Over 40,000 youths have been channeled into such jobs so far this year, and the government predicts that number to rise to 100,000 by the end of December.

The European Union on Tuesday gave approval to a financial guarantee from the French state for PSA Peugeot Citroën's in-house banking unit, saying the aid is essential to help the ailing auto maker return to health, The Wall Street Journal reported. Apart from the loan guarantee, the move gives Peugeot a vote of confidence for a restructuring plan made necessary by the collapse of the European auto market.

Europe’s long-running economic troubles have been, for the most part, confined to the feeble countries of Europe: Greece, Spain, Portugal and Italy. But more and more they are coming home to roost in France, raising questions about whether one of the Continent’s biggest economies may become the next sick man of Europe, the International Herald Tribune reported. By many measures, France is already moored in malaise.

German and French businesses will see their borrowing costs tumble by tens of billions of euros over the coming years thanks to aggressive central bank action to lower the cost of funding. Countries in the credit starved periphery – the main target of easy monetary policy – will continue to struggle however, and will benefit far less from a projected €42bn reduction in debt payments over the next five years, according to an FT analysis of European Central Bank data.

The French economy is facing a growing handicap as it struggles to create jobs and crawl out of recession: Despite low interest rates, companies and entrepreneurs are cutting back on their investments. They're delaying plans to expand existing factories, and canceling plans to build new ones, The Wall Street Journal reported. Behind the reluctance is a difficult combination. Higher taxes and cheaper foreign competition have pushed margins for French companies down to their lowest level since 1985—reducing companies' ability to stomach risk.

French water company Saur is set to be taken over by its creditors later this month after securing a restructuring deal with all its stakeholders that will see its burdensome debt pile cut in half. The state-backed company, which competes with France’s Veolia Environnement and Suez Environnement, has negotiated a deal where its more than 60 bank lenders will take ownership in return for writing off much of the debt, the Financial Times reported. The group had been struggling with €1.8bn worth of debt stemming from a 2007 leveraged buyout, which will come down to €900m.

France aims to make budget savings of around €28 billion over the next two years to restore public finances to order, finance minister Pierre Moscovici said Tuesday, the Irish Times reported. The government is struggling to find the right balance between belt-tightening and tax increases as it seeks to rein in the public deficit without hitting the already faltering economy. Speaking ahead of a parliamentary debate on next year’s budget, Mr Moscovici said that the government wanted savings of €14 billion in 2014.

A Paris court ordered the liquidation of books-to-music retailer Virgin Megastore France on Monday, sending hundreds more people to join France's record jobless queues, Reuters reported. Virgin Megastore France, which employs 960 people in France, filed for insolvency in January, blaming high property rental costs and an industry-wide slump in CD and DVD sales as consumers download more film and music online. The court last week rejected two takeover offers by clothing group Vivarte and specialist retailer Cultura, deeming neither sufficient to safeguard Virgin's future.

French state holding company FSI said it was confident of a positive outcome to debt restructuring talks at Saur, the water and waste treatment company in which it is the leading shareholder. Saur, burdened by 1.8 billion euros ($2.3 billion) of debt, is trying to negotiate a restructuring with its lenders and shareholders before June 30, after which the firm risks being put under a court-sanctioned reorganisation scheme. "Important progress has been made in the past few days. We expect a positive outcome for these talks," FSI Chief Executive Jean-Yves Gilet told Reuters.

Renault SA, France’s second-biggest carmaker, is ending a five-year partnership with Better Place LLC after the operator of electric-vehicle charging stations announced plans to shut down, Bloomberg reported. Better Place filed a motion for liquidation with an Israeli court yesterday after failing to attract new investments, according to a company statement. Renault and Better Place began working together in 2008 and said a year later that they aimed to sell 100,000 of the Fluence ZE, the French carmaker’s first electric vehicle, in Israel and Denmark by 2016.