News

Bank of France governor calls for longer work week to tackle unemployment

MONTREAL – Europeans have long been proud of their work-life balance, with legislation in many countries that limits hours and guarantees vacation. France even recently considered outlawing work emails after normal work hours.

But the governor of the Bank of France says that needs to change in order to restore the competitiveness of European economies.

Christian Noyer told reporters at the Montreal Economic Conference on Monday that the relatively early retirement age and short work week for most workers are putting a strain on governments and weakening the competitiveness of businesses.

“It means that jobs are moving outside the country and the fiscal imbalance of the pension systems is impossible to attain with the increased duration of life if you retire too early,” Noyer said.

Different European countries are trying to tackle the challenges, including France which has already engaged in three pension reforms.

“All the countries have also started more or less decisively to reform their pension systems and we know that we need more flexibility in the working hours,” Noyer said.

He added that rules that limit Sunday work need to change, especially in the tourism sector.

In remarks prepared for the event, Noyer said economic growth has improved too little to significantly reduce high unemployment, especially among youth.

Also Monday at the conference, the chairman of General Electric said Canada’s battered manufacturing sector can regain its foothold and create jobs because of the abundance of cheap energy.

Jeffrey Immelt said low energy costs will be a factor in determining where factories are located and can offset higher wage costs that have traditionally been manufacturing job-killers.

“Be not mistaken. That is a big part of how you drive manufacturing excellence in the future,” he said in a luncheon speech.

New manufacturing plants will be much smaller, flexible facilities that employ a few hundred workers that can compete with many in the world, he said.

Premier Philippe Couillard also spoke of the lure of affordable energy for industry, saying Quebec’s availability of cheap hydroelectric power can restore the province’s manufacturing sector.

“We have the right environment to attract this type of business, not only because of the current macroeconomic climate with low dollar and low oil costs, but also because of hydroelectricity,” he said in an interview before meeting Immelt to pitch the province.

Follow @RossMarowits on Twitter.