Record unemployment hits Sarkozy's re-election hopes

Figures released on Monday showed France's unemployment rate has reached a 12-year high. The data may hamper President Nicolas Sarkozy's re-election prospects, a few months ahead of a run-off that is likely to focus on France's sagging economy. French President Nicolas Sarkozy's re-election hopes have been hit by new figures showing unemployment at a 12-year high amid an austerity drive that leaves him little room to manoeuvre. The figures issued on Monday showed the number of registered jobseekers in France rising by 29,900 in November to reach 2.84 million, the highest level since November 1999. Before his election in 2007, Sarkozy vowed to lower joblessness to five percent, but the unemployment level hit 9.3 percent in the third quarter of this year and is on track to surpass 10 percent. "We're expecting a quite catastrophic 2012 and expect to finish the year with an unemployment rate of around 10.7 percent," economist Henri Sterdyniak of the French Economic Observatory told AFP. The news could hardly be worse for Sarkozy, who is facing a tough battle for re-election in April against Socialist frontrunner Francois Hollande with the economy expected to take centre stage. Sarkozy, who is expected to formally announce his candidacy in February, called a summit of unions and business chiefs on January 18 in a bid to tackle unemployment. But his options are limited. Keen to maintain its cherished triple-A credit rating, the French government has vowed a series of austerity measures, including the announcement last month of 65 billion euros ($85 billion) in savings by 2016, on top of a 12-billion-euro deficit-cutting package announced in August. The government has said it needs to make 100 billion euros in savings to balance the budget by 2016. So unlike during the 2007-2008 financial crisis -- when Sarkozy's government introduced a 26-billion-euro stimulus package aimed at fostering growth -- this time there has been no mention of state support for the economy. Reacting to the unemployment figures on Tuesday, Labour Minister Xavier Bertrand said government efforts would focus on a "competitiveness-employment pact" aimed at boosting labour flexibility to curtail job losses. Bertrand also sought to minimise the political fallout from the unemployment figures, saying the eurozone debt crisis was to blame and not government policies. "When economic figures are not good, employment figures can also not be good," he said on RTL radio. "Unemployment is not just a French problem. Only Germany has seen its unemployment recede, because they have been making fundamental reforms to the labour market for 10 years," Bertrand said. "We have been undertaking reforms for only a few years," he said. But Sarkozy's opponents have pounced on the unemployment figures as ammunition against his economic record. "Nicolas Sarkozy's balance sheet is a million more jobseekers during one mandate!," said Socialist lawmaker Alain Vidalies, the party's labour critic. "The government is following a policy that can only lead to an increase in jobseekers and economic lethargy." Opinion polls have consistently shown Hollande leading over Sarkozy in the race. France will vote in the first round of the presidential election in April and potentially a second round in May, followed by parliamentary elections in June.