French News in English 

Published by France Now Association

Editor: Arvind Ashta

Editorial Committee:

W. W. Strangmeyer,

Emmanuelle Ashta




French News in English

March 2000, Monthly, Issue No. 35, 50 Francs.

Tax 2000



The tax return for individuals has to be filed by 15th March. The important budget proposals were presented in our October 1999 edition. We resume the propositions which were finally passed.

1. The VAT rate for repairs to housing was lowered from 20.6% to 5.5% effective from 15th September, 1999. This concerns housing which is at least two years old. The tax reduction for major repairs is abolished from 15th September. However, a new tax-credit is offered for large household equipment. Note, this is a tax-credit and is, therefore, reimbursable for households who do not pay tax. A decree precised that this includes large heating equipment, boilers bought for central heating of apartment buildings, elevators, a hammam and a sauna cabin.

2. The notary charges for acquiring houses were reduced from 7.6% to 4.8%. Now, the same fiscal regime is applicable to professional and personal buildings.

3. The rental lease duty (droit de bail) of 2.5% will be abolished from 2001. From 2000 itself it is waived for those paying rent of less than FF 3000 per month. Those having income from property of less than FF 60,000 per year will be refunded the rental lease duty related to rentals from January to September 1998.

4. For income from immovable property, the simple tax regime is extended to those earning up to FF 60,000 (up from FF 30,000) and the standard deduction is raised to 40% (up from 33%).

5. The Professional tax contains two bases: capital employed and salaries. The "salary" base is abolished for small and medium enterprises. Doctors or professionals without "capital employed" would therefore not pay any professional tax.

6. The additional contribution on the corporate income tax is abolished.

7. The VAT on services relating to helping old and disabled people is reduced from 20.6% to 5.5%.

8. There is a 30% reduction in gift duty pertaining to gifts made by people older than 75 years. This is extended till June 2001.

9. For low income households, the housing tax (taxe d'habitation) is capped at FF 1200 (earlier FF 1500).

10. The exemption for inter-spouse succession is raised to FF 500,000 (from FF 400,000)

11. Succession duties for transferring small and medium enterprises are reduced to half, if the inheritor keeps the shares for at least eight years.

12. The tax credit on dividends is reduced for enterprises engaged in the business of financial investments. Dividend exoneration is now limited for groups of companies.

13. The FF 1500 tax for creating an enterprise is abolished.

14. The tax on the sale of goodwill (fonds de commerce) is reduced from 11.4% to 4.8%.

15. The tax forfeit of FF 5,000 payable by small enterprises with an annual turnover of less than FF 500,000 is suppressed.

16. 49 small taxes and duties have been abolished and many formalities simplified.

17. The four different systems of taxing capital gains are now unified.


Public Finances: Budget 2000

Receipts Billions of Francs Expenses Billions of Francs
VAT 681 Education and research 401
Personal Income tax 333 Employment and solidarity 258
Corporate Income Tax 227 Defence 243
Tax on Petrol and Petroleum products 167 Interest on deficit 235
Stamp and registration duties 88 Localities 221
Other taxes 55 European Union 98
Total tax receipts 1551 Administration expenses 40
Other receipts 201 Others 471
Total receipts 1752 Total Expenses 1967
Deficit -215


Details of the 35-hour week

In January this year, the government passed the second law relating to the 35-hour week. This was followed by a number of decrees indicating specific details. We summarise the details.

For those who came in late, we remind you that the 35-hour week was the major electoral promise of this government. The promise was made towards the end of France's recession. The government was elected in 1997. The first law on the subject, stimulating experimentation with the 35-hour week was passed in 1998. Now, a second law has been passed, taking into account the results of the experiment.

The 35-hour week is a philosophic, economic and social concept.

Philosophically, it was considered that if we are moving to a point of increasing unemployment, it is because productivity is going up, and less labour is required. The productive workers should be allowed to share in the material prosperity by being allowed greater leisure (a superior good), allowing them to lead a more balanced and more enjoyable life.

Economically, it was considered first that labour productivity declines with length of time worked. If workers work less, their marginal product should be higher. So, it was considered better to use more workers for less time. Second, the redistribution of work-time would leave workers the time to consume and boost aggregate demand. Third, the redistribution from better-off workers to those presently unemployed would raise income in the hands of those with a higher marginal propensity to consume and thus increase the multiplier effect.

Socially, it was considered that a society with high unemployment is not a healthy society since some are socially excluded, especially because individual identity is often derived from work-identity. So, there was a need to include the unemployed in the workforce.

The 35-hour week was therefore a political decision to share the work between the workforce, i.e., between the employed and the unemployed. Since it was estimated that about 13% of the workforce was unemployed, the work-week was reduced by 10% (from 39 hours to 35 hours), leaving scope for a little frictional unemployment so that there would not be too much pressure for wage increases. At the same time, statistics were presented to the employers indicating that productivity increases would compensate for most of the effects of the reduced work-time and that the reduction in unemployment would not really be so high. This reassured employers that there would not be any real upward pressure on wages.

The model of the 35-hour week is not expected to reduce income-inequalities between the businessmen and the salaried. It is expected to reduce the income-inequalities within the salaried class, between the active and the temporarily inactive. To a small extent, therefore, the enhancement of the multiplier effect would come into play, thus boosting the economy.

1. The Legal Duration of the Work Week and the regime of supplementary hours

The legal duration of the work-week is fixed at 35-hours. This is applicable from 1st January 2000 for enterprises with more than twenty salaried employees and from 1st January 2002 for those with twenty or less.

For agglomerations of more than 50,000 inhabitants, the President of the intercommune is to stimulate measures to ensure the reduction in time.

The time taken to eat and all breaks are taken as effective work-time in some cases.

If uniforms have to be worn and taken off, the branch convention or the union accord has to decide if the time for breaks is to be included in the effective time.

The notion of a period of "constraint" has been defined as a period where the employee is "on call". The employee has normally to be informed fifteen days in advance for all such periods. The remuneration for these periods of waiting is to be fixed according to accords or conventions. In any case, the employee has to be paid in some way for being available.

A complicated regime of accounting supplementary hours was considered unconstitutional by the Constitutional Council. Thanks to this, the principles are simple:

For enterprises subjected to a 35-hour week, the first four supplementary hours of a week give a bonus of 25%. The bonus is given as leave, unless a convention allows it to be paid. During the first calendar year after the coming into effect of the 35-hour week, this would be limited to 10%.

The next four supplementary hours in the same week give rise to a bonus pay of 25% and all further hours a bonus of pay of 50%, unless an agreement allows it to be taken as leave.

For small enterprises who would continue at the 39-hour week for another two years, the first eight supplementary hours would be paid at 25% bonus and the next hours at 50%.

Compensatory Leave can be taken as full working days or half-days, as wished by the employee. This is only normal: after all, he worked extra when the employer wanted him to: he should take leave when it suits him.

Normally, an enterprise is allowed a maximum limit of supplementary hours it can force a person to work. This used to be 130 hours a year. For enterprises adhering to the 35-hour week, the limit is fixed at 70 hours, but the limit applies from the 37th hour in 2000 and the 36th hour in 2001.

In all cases, the average work time per week for any period of 12 weeks should not exceed 44 hours or, in certain cases, 46 hours.

2. Repartition and changing the Work Time: Allowing flexibility to the employer

The average work week of 35-hours corresponds to 1600 hours per year, after accounting for the weekly holidays, annual leave and an average of 11 paid holidays.

A branch convention may allow the enterprise to fix different hours to be worked at different times of the year, ensuring that the average week stays at 35 hours and the annual total at 1600 hours. The convention must also respect the maximum hours to be worked in a day (ten hours) and in a week (which varies from 46 to 48 hours, depending on different situations). In such a case, the legal work-week conforms to that agreed by the convention for that part of the year, and the supplementary hours are to be calculated in relation to the period.

The Convention has to solve such complicated issues as to how to count absences during different periods. For example, is an employee who takes five weeks leave in the peak season in the same situation as those who take in low season?

The reduction of the work-week may take effect by giving employees half-days or full-days off within four weeks.

An accord or convention may allow the compensating leave to be computed annually. In such a case, part of the timing of the leave would be determined by the employer and part of the timing by the employee.

3. Managers

Managers at the directorial level are not concerned with the 35-hour week. These are the managers who make autonomous decisions, whose work-week is self-organised and whose earnings are at the highest echelons of the enterprise.

At the other extreme, those who are deemed managerial staff owing to the income they earn and whose work-time can be predetermined, are placed within the framework of the 35-hour week.

Managers who are in between these two extremes can be put on a system of forfeit of hours or days to be worked in a week, month or year. But they must respect the reduction in working time to an average of 35-hours a week or a total of 1600 hours per year or 217 days per year.

However, the limit of 10 hours per day or five days per week is not applicable to these managers. They can be asked to work as much as thirteen hours a day. A day off per week is obligatory for those on an hourly base, but not for those on an annual base.

4. Part-time and intermittent work

The notion of part-time work has been revamped to align it with EU directives. In France, part-time work was less than 80% of full-time work. In the EU, it was anything less than full-time work. The new position conforms to the EU position. But, it can be calculated weekly or monthly or annually.

Part-time workers can also be asked to increase their work at some points of the year, and compensate by less work at other times. The new part-time contracts can establish a schedule of different hours in different parts of the year. These contracted hours can also be modified at a week's notice (three days if permitted by accord or convention). But the salaried people have been offered some protection. Firstly, those whose family situation does not allow this, do not have to conform to changed hours. Even part-time workers who have a second job can refuse extra work conflicting with the second job. Those pursuing studies or having another non-salaried activity can also refuse this. Secondly, a salaried person can ask for leave during the children's vacations to be compensated by him by working longer hours later. In short, where it serves both the employer and the employee, flexibility is permitted by the State legally instead of the off-the-record understandings between the worker and the boss.

Overtime is permitted within 10% of the contracted time (33% if an accord or a convention stipulates) and within the 35-hour limit. An overtime bonus is paid if the overtime exceeds 10% of the contracted time. But the salaried person must be given three days' notice and overtime must be foreseen in the contract.

If the overtime of two hours or more per week is persistent for more than twelve weeks within a period of fifteen weeks, the new average time becomes the normal part-time.

An accord or convention can also permit the modulation of part-time work over the year. But it must indicate the types of salaried staff, the weekly or monthly minimum time to be worked, the minimum per day, the limits between which the work-week will vary. Normally, the work-week stipulated can be increased or decreased by a third, without exceeding 35-hours in any week.

Workers can request a reduction of their working time over one or many periods, each greater than a week, for family reasons. The request has to be made six months in advance and the employer has to reply within three months.

The exoneration of social security charges for engaging part-time workers is limited to one year after the application of the 35-hour work-week to the enterprise.

A new contractual relationship has been created, termed "Intermittent Work". This allows people to alternate between periods of work and no-work. The contract has to indicate the minimum annual working duration and the periods of work. Overtime is permitted to the extent of one-third of the stipulated minimum period. The salary can be based on the hours worked in each period or be averaged out.

5. Leave

To calculate an employee's annual leave, the half-days or full-days taken off (in the case of monthly or annual adjustments to the 35-hour week) are included in the effective work-time.

To encourage part-time work with many different employers, to determine the timing of an employee's leave, the employers have to take into account the fact that the employee has to take leave simultaneously from the other employer.

The provisions for cumulating leave have been relaxed.

6. Time-saving Account

The system of leave accumulation under Art L.227-1 has been modified significantly. This system allows accumulating leave and taking it later when, hopefully, it is worth more because one is earning more. Besides the leave which is not taken, all kinds of bonuses and indemnities can be converted into accumulated leave in one's time saving account. This will now include the bonuses for working late or the compensatory leave for overtime, as well as a part of the leave associated with reducing the work-time to 35-hours.

A maximum of twenty-two days per year can be accumulated for the above reasons.

Another five days per year can be accumulated for overtime worked if the activity fluctuates and if the convention or accord permit it.

The leave has to be taken within five years of its crossing the two-month mark. For those who have children less than sixteen years of age at the end of this period and whose spouse is dependent or older than 75 years, the leave can be taken within ten years of crossing this minimum two-month period.

7. Training and reduction of work-time

Employers are obliged to train employees in accordance with the evolution of their work. All training activities constitute effective working time.

Nevertheless, some training activities may be taken up on the employees' time if the employee is willing.

Young workers less than eighteen years of age on initiation training or alternating contracts have to be allowed two consecutive days' leave. An exception may be made for specific activities and this could be reduced to thirty-six hours consecutive.

8. Developing bargaining and Easing social contributions

The enterprises which reduce the work-week to 35-hours per week or 1600 hours per year would get an exoneration of social security charges for employees earning up to 1.8 times the SMIC, provided the work week time reduction is obtained by negotiation: accord within an enterprise or convention for a branch of activity.

The accord has to define the new work-conditions as well as objectives relating to new employment, training, switching to part-time work, etc. These objectives have to be compared with actual results at the end of the year and new objectives have to be placed for the next year.

To benefit from the reduction in social security charges, the employer has to provide information to the URSSAF or similar organisation on employment effects of the 35-hour week. In fact, the easing of charges is a payment for information provided and interference in the employer's domain of hiring, firing and exploiting.

The benefit of reduced charges is lost for those working overtime for more than the legally allowed 70 hours per year.

The benefit is suspended if the employer does not recruit the agreed new employees within a year.

New enterprises created now, using the 35-hour week or 1600-hour year, will get the social security reduction benefit if they pay their employees a minimum wage equal to 169 times the hourly SMIC (which corresponds to the old 39-hour week).

The social security reduction is for social insurance, work-accidents, professional illnesses and family welfare.

It is given for all employees working more than half-time.

The amount of the deduction is digressive in relation to the salary of the person: but there is a minimum forfeit benefit beyond a certain salary (1.8 times the SMIC). A decree dated 28th January fixes the monthly amount as determined by the formula:

[(41500 x 6881.68÷monthly gross salary of the employee)-20000]÷12,

with a minimum of FF 333.33 per month (or FF 4,000 per year).

To illustrate the impact, after rounding off to lighten the presentation, the government had indicated the figures in the table.

The amounts will be higher by FF 3500 per year (or pro-rata FF 292 per month) for enterprises who reduce the work-time to 32 hours per week or 1460 hours per year. Another FF 1400 per year may be attributed to employees engaged in areas of rural revitalizing.

This permanent aid, given to all enterprises, is in addition to the temporary aid (maximum for five years) given as an incentive to those who brought in the 35-hour week sooner than it was legally obligatory. It is also given in addition to those who followed the Robien law. In either case, the cumulating is subject to a reduction of FF 4,000 per year for enterprises reducing to a 35-hour week and FF 7,500 per year for enterprises who are reducing their work-time to 32 hours a week, fixed by the decree of 28th January. The total of reductions in social security charges cannot be greater than the charges due from the employer.

9. Legal Security

Contracts signed in accordance with the first law (June 1998) are valid as long as they adapt to the new stipulations concerning overtime bonuses and compensatory leave.

If an employee refuses to accept the reduction of his work-week subsequent to an accord, he can be fired.

In such a case, the employer does not have to pay a special indemnity to the ASSEDIC.

10. Remuneration

There are 2.2 million employees paid at the SMIC, France's minimum wage. This wage is currently at FF 40.72 per hour, which works out to FF 6882 per month (40.72 x 169). If the hourly SMIC remains the same, the people on the SMIC will obviously be paid less at 35-hours than at 39. Their pay would work out to about FF 6176, a monthly loss of FF 706. The 2.2 million voters would not like their monthly pay to be reduced. The government had promised that they would not lose out. So, a complementary allowance of FF 706 per month is being paid to them to compensate the reduction in their monthly pay. A lower complementary allowance will also be paid to those earning a little more than the SMIC whose pay reduces to less than 169 times the SMIC. The old monthly SMIC will therefore be the minimum for all full-time workers.

This "minimum monthly salary" (new SMIC plus complement) will also be indexed to consumer prices and to half of the growth in the buying power of an average worker. But it would not receive the ad hoc boosts (coups de pouce) provided to the hourly SMIC every few years, notably before or after elections.

The guarantee is also offered to those working part-time on the SMIC as they are also assured a proportional minimum on the above base.

New employees doing similar work in the same enterprise to those earning the old SMIC must also be paid an equivalent monthly salary.

Apprentices and disabled workers are provided a similar advantage based on their respective minimum pay.

This guarantee will no longer be needed after 2005, since the evolution of the hourly SMIC, with the ad hoc boosts, should have caught up to that of the monthly pay packet determined in this way.

11. Agricultural Professions

The dispositions of this law have been applied to the 1.4 million agricultural workers also.

12. Diverse

The government will be presenting a report on the impact of this law on employment every year to the Parliament.

13. Free or subsidised advice

The stipulations of the subsidised consultancy, introduced after the first law, have been renewed by a decree. Such subsidised consultancy is available for internal reorganisation owing to introduction of the 35-hour week and for negotiations concerning the 35-hour week. The former can be before or after introducing the 35-hour week. Of course, government-approved consultants have to be taken.

The government subsidy would be for a daily fee of up to FF 5,500. The subsidy would be 100% for the first five days. For the rest of the period, the subsidy would be for 70% of the consultancy cost for enterprises with less than 200 salaried people, and 50% for those 200 or more.

In short, free advice is being given on how to reorganise.

14. Modified Salary Bulletin

The salary bulletin has, of course, become more complicated. It must indicate, if necessary, whether it is based on a weekly, monthly or annual salary with corresponding hours. If the salary is not calculated on the basis of the number of hours, the bulletin must indicate the salary base.

For those on the minimum wage, the new salary and the complement to insure their earlier monthly wage must be indicated separately.

15. Retrenchment benefits linked to 35-hour week

When companies partially lay off older employees (55 to 65 years), they have to provide them a replacement income. The State is willing to bear part of the cost if the enterprises and employees satisfy certain conditions. One of the conditions is that the enterprise should have reduced its work-time to 35 hours a week or 1600 hours a year.

The percentage of the State participation is fixed at 20% for employees who are 55 years old, 35% for those 56 years old, and 50% for those older than 57 years.

Electrifying the Electricity sector

On the 10th of February the government passed a law relating to the modernisation and development of the public service of electricity. The law contains fifty-five articles distributed under nine titles. These include the definition of the public service, production, transport and distribution, access to the network, accounting, regulation, objectives of EDF, social provisions and diverse and transitory provisions.

Since 1946, electricity and gas are virtual state monopolies exercised by EDF and GDF. The nationalisation and monopolisation were considered essential to French post-war development. French energy dependence was considered at 77% in 1973 (to import oil for thermal production) before the first oil shock. Subsequently, France decided to go in for nuclear energy sources and today its dependence rate is assessed at 50%. EDF, the largest electricity company in Europe (about FF 185 billion in electricity sales) exports far more than it imports. However, it is only the fourth largest exporter in Europe. EDF's monopoly is similar to the situation in Ireland, Greece, Portugal and Italy.

With the coming in of the EU and the consequent liberalisation and opening of markets, the governments needed to permit foreigners to compete in all member-countries. An EU directive of 1996 (applicable from February 1997) required the opening of the electricity market in three phases. Within two years, the part of the market open to competition would be at least equal to the consumption of large customers (more than 40 Gwh per year), i.e., about 25% of the European market. Within three years, this threshold is lowered to 20 Gwh per year, representing about 27% of the European market. At the end of six years, this threshold is further reduced to 9 Gwh per year, representing about 30% of the European market. We note that the EU directive is aimed at liberalising electricity sold to the industrial market.

Of course, in practice, much of this has already been done in the last two years. Some countries have moved much faster. Sweden, Finland and Spain are ahead of the EU directive. Germany and the UK have opened their markets totally. Others have opened a much larger part than the 30% previewed in six years. Only France, Austria, Greece and Portugal have decided to stick to the minimum required by the EU. France dragged its feet and the first law has come out a year later than scheduled (February 2000 instead of February 1999), after the UK threatened retaliatory measures. About 60% of the EU market may have been liberalised end-1999. As a result, it seems, Spain and Austria have witnessed 15% reduction in electricity prices benefiting the consumers.

The field of electricity has also witnessed mergers and acquisitions in the last few years e.g., Alsthom and ABB. EDF has bought out London Electricity. At the same time, EDF has also diversified by purchasing Clemessey. In fact, it seems that each provider is trying to now provide a variety of complementary services (electric, thermal, air-conditioning) in all the European markets. The market is also being opened to North American operators. Concomitantly, new decentralised techniques (co-generation or combustible batteries) seem to be cost-effective large centralised operators.

French electricity prices have remained stable since 1983, with a 10% decline over the last few years. Meanwhile, competitive products, notably gas, seem to be more price-competitive with the fall in global prices of natural resources. The end-result is that French electricity is now considered 8% more expensive than international prices for electricity. All this means that all products which are intensive in the use of electricity will be manufactured outside of France if French prices do not come down or if cheap imported electricity is not allowed in.

Besides the industrial market, the domestic or retail market is also very important and constitutes more than 30% of the total market. This domestic market grew at a rapid pace of 11% per annum from 1951 to 1973 thanks to the increased number of electrified houses as well as increase in applications (appliances, heating). 60% of new housing is adapted to electric heating. What this means is that electricity is now considered a necessity and those whose electricity is cut off are considered socially excluded. Which is why the government passed a law end-1998 to stop the practice of peremptorily cutting off the electricity of the half-million consumers (2% of households) who could not pay their bills.

At the same time, local electricity companies having universal operator status, such as EDF, have a social obligation to furnish rural markets. This includes about 29000 little communes with a total population of 12.7 million (about 438 per commune). The extent to which they fulfil this obligation makes them non-competitive in the international market. So, a separate subsidy is required to ensure that this obligation does not interfere with competitiveness in the industrial segment.

Which means that there are two markets. The first is a competitive industrial market where the big consumers can negotiate agreements and choose among the different European and international suppliers, allowing them to reduce the price of their inputs essential to cost-efficiency for their own product-pricing. The second market is that of small domestic consumers who have little choice as to their supplier. This is complicated by obligations to poorer consumers who can't pay and a national tariff equalisation system to cover not only the small rural consumers but also to integrate the electricity-rich regions with deficit regions.

The obvious conclusion is that all electricity companies will try to make domestic customers pay for subsidising industrial sales. The accounting treatment to determine the losses of the rural segment and those of continuing electricity supply to poor people who cannot pay their bills will effectively determine the ability to negotiate industrial tariffs. Clever use of transfer-accounting should be able to increase losses attributed to domestic and rural sectors permitting increased taxpayer financing. The consequential increase in subsidies could in turn increase the margin for negotiating industrial contracts Europe-wide. After all, lower industrial tariffs may mean withstanding competition and permitting Electricity production jobs to remain in France.

To avoid such cross-subsidies and distortions, the EU directive requires separate accounting for production, transport and distribution of electricity to be made available for each enterprise to all member-countries on a reciprocal basis. The law passed in February 1999 respects this obligation. However, neither the EU directive nor the French law indicate the need for transparency regarding markets (industrial and domestic - including defaulters and rural) as distinct from activities (production, transport, distribution).

Supporting the Professional Education Business

Unlike French university education, which is very cheap (FF 1,200 to 2,000 per year), professional education can be as expensive as anywhere in the USA or UK. A four-month course could cost anywhere between FF 5,000 and FF 75,000. Long MBA programs could cost well over FF 100,000.

At these prices, you would think that there are not many takers. Wrong, there are seldom professional courses which go a-begging. Mostly because, thanks to generous subsidies, the cost to the recipient of the education is practically nil. These subsidies come from various public bodies: the State, the National Education Fund of the Labour Ministry (FNE), the Regional Council, the Departmental General Council, the Social Fund of the ASSEDIC, the Mayor's office, the retirement funds, the ANPE and the continuing education fund. Private bodies such as the Rotary Club may also finance part of the course. Each of these bodies has its own criteria as to which courses they will finance. For example, the regional council often specifies that the person must be at least 25 years old and be unemployed for more than six months. The "FNE-Cadre" specifies that the person must have worked at least five years. Each body also evaluates the institute and certifies specific courses from the institute. Most of the subsidies are provided to the unemployed.

In spite of the course being practically free, not all of France's 2.5 million unemployed wish to pursue further education. Some, because they would prefer to find a job quickly, others because they just don't believe in further training or don't have the aptitude for it. This means that French professionals going in for continuing education or the unemployed trying to fill up a deficiency in or add a skill to their repertoire like to make an inventory of advantages and disadvantages of spending time in professional education. They invest their time only if they feel that there would be some value added.

After that, they go in for a period of research, finding the appropriate course for their needs among a multitude of available courses. The research is of course not that complicated. Often, only one course specific to one's needs is offered in the region. If more are offered, their timing is different and one is clearly more suited to one's calendar that the choice is already made. It is recommended to take feedback from ex-students about the quality of the course and from the market about the quality of the organisation.

Most courses are rated from one to five, in a declining scale of professional capabilities to which the course prepares. Level one is often a general management course, level five is a technician. Often, people may take a series of courses, slowly upgrading themselves from level five to a higher level, till they feel they are qualified for the post they would like to exercise. Of course, the student must be able to justify the aptitude for the course and how it is relevant to his professional project in order to be approved to receive the subsidy.

In addition to the cost of the course, a second factor which would inhibit people from taking courses is the loss of income or free-time. The legislature has intervened in this regard too and ensured that, if anything, people gain from going in for higher education. For this, the unemployment dole, which is digressive with time, is maintained at the initial level during the length of the course. After the course is over, the trainee finds his earning falling to the level it would if he had not taken the course. For those with high doles, the course may be justified during times of seasonal troughs. But to get this special education dole (the AFR), the course must be certified in this respect by the ASSEDIC. Most courses are if they are for more than 20 hours a week.

Most professional training courses have three parts. The first is the scholarly aspect where one is actually taught the theory. A second is the practical aspect where one is sent to enterprises to put the knowledge into practice. It seems that all trainees easily find enterprises because the trainee is free to the enterprise who accepts the trainee. The third is the professional aspect, where one finalises his or her professional prospect and looks for a job: the objective of all the subsidies.

Critics of the professional education programs point to the economic distortions created in the market. People spend time and money buying education instead of other products. However, much of this is justified in the name of human investment necessary to keep the economy ahead internationally. Some distortions do occur with some students marking time in professional courses instead of attacking the realities of the real world: but many have indicated their satisfaction at having been able to convert from a frustrating career choice made in their teens or early twenties to something more suited to their nature.

A second criticism is that since many different bodies are subsidising the courses, there is no statistic available for the total outlay on professional education.

A third criticism is that the people undergoing training are not included in the unemployment statistics because they are not supposed to be looking for work during their training time. As a result, it is in the government's political interest to hide the unemployed in training courses. However, even this keeps the economy moving. After all, while the taxpayer may be paying for the courses, the institutes offering the courses are employing teachers.

. Some schemes ask people to pay back whatever the course costs if they do not complete the course. But in most cases, this does not really happen in practice if the person leaves the course because he has found a suitable job, which was the objective of the course, in the first place. But borderline cases are always causes for looking at one's conscience: does a temporary job offer justify abandoning the course, considering that one got the place instead of some other candidate?

While all the above goes to show that the professional training is the cream-end of the education business, much of the demand continues to be a function of unemployment. With economic growth and the 35-hour week, unemployment should go down and the demand for professional courses should reduce drastically, especially if the more dynamic among the unemployed find jobs immediately. The government hopes that what is lost by way of the market of the unemployed for professional training will be compensated by the increase in demand for continuing education in evening courses by all the employed, thanks to the four-hours per week of leisure time made available. Of course, professional training organisations will need to re-tailor their course timing to suit the new agenda.