Keep-it-in-France business bill ready soon, minister says

France's new left-wing government will soon propose legislation that seeks to prevent profitable businesses being closed down or  transferred abroad by their owners when a buyer is willing to keep the affair going in France, a minister said on Friday.

Draft legislation, following up on election campaign pledges by President Francois Hollande to combat industrial decline and  a haemorrhage of activity to low-cost countries, will be ready in the coming weeks, he said. The announcement was made by Arnaud Montebourg, a lawyer and member of parliament who has made himself a name as a strident critic of globalisation and landed a job as industry minister in Hollande's cabinet, a post now rebranded minister of industrial revival.

"The bill will establish a judicial framework for passing on the baton when there's a buyer for a profitable business instead of closing things down and letting big corporations shift their production out to low-cost countries," Montebourg, a 49-year-old lawyer, told BFM TV. Hollande, elected on May 6, appointed an interim cabinet in mid-May that is set to become permanent if his Socialist Party and allies win control of the lower house of parliament in an   election taking place on June 10 and 17, as polls predict.

The Senate upper house of parliament is already controlled by the Left and an election victory would guarantee Hollande the majority he needs in the lower house, the National Assembly, to secure safe passage of legislation to implement his programme. One case that has inspired the planned law is the plight of two blast furnaces steel giant ArcelorMittal idled in eastern France last year.

Workers have lobbied hard to highlight what they fear will be the permanent shutdown of a viable and high-performance plant as Arcelor tries to sit out a lull in demand without surrendering the factory to a potential rival. The CGT trade union, one of France's largest, has told the government as many as 45,000 jobs risk being lost imminently in the euro zone's second-largest economy, where the jobless rate hit 10 percent in the first quarter of this year.

Business leaders and some economists are concerned that more state intervention in the economy to halt layoffs will only discourage investment and weigh on growth. In another move to discourage layoffs, the government is also planning legislation that would making firing people more expensive for companies by raising the cost of redundancy payments. The government's push to clamp down on layoffs and factory shutdowns contrasts with reforms under way in euro zone countries such as Italy and Spain where governments are easing regulation.

2012-06-08

Muhabir: Reuters