FRANCE ANNOUNCES PLAN TO BOOST EMPLOYMENT The government announced a three billion franc program to combat long-term unemployment amid speculation among political and economic analysts that it is positioning itself for a period of economic reflation. The package presented to the cabinet of Prime Minister Jacques Chirac by Social Affairs and Labour Minister Philippe Seguin today is to be financed out of a 7.5 billion franc contingency fund announced on February 25. Finance Minister Edouard Balladur previously ruled out a reflationary program. Long-term unemployment, defined as being out of work for more than one year, affects about 830,000 people or one third of French unemployed, government figures show. The main measures of the employment program give employers financial incentives to offer short-term work contracts of at least two years and stress retraining to help the long-term unemployed return to the labour market. Training subsidies and exemptions from social security contributions are the main incentives for employers. "Companies tell us that we have to give them a strong incentive to take on people who have fallen out of the labour market and that's why the proposals...Are costly," an aide to Seguin said. The analysts said speculation the government is considering a reflationary program was sparked by Chirac spokesman Denis Baudouin, who said yesterday that ministers were generally agreed on the desirability of relaunching the economy. He appeared to contradict statements by Balladur ruling out economic stimulation despite the government's revision of its 1987 growth forecast to about 2.0 pct from 2.8. Finance ministry officials later clarified Baudouin's remarks, saying there was no question of any move to stimulate the economy through a boost to consumer spending although government policy allowed for increased industrial investment from the proceeds of France's five-year privatisation plan. The 1987 budget allowed for 30 billion francs in revenue from privatisation, to be split between repaying national debt and providing state enterprises with fresh capital. Some political analysts said Baudouin's comments possibly reflect widening differences within the RPR-UDF coalition on social issues ahead of next year's presidential elections. Divisions began to show last December, when a wave of strikes led by transport workers paralysed the country and drove the government into a new mood of conciliation with labour. Officials said that after the success of the privatisation of Cie de Saint Gobain <SGEP.PA> and Cie Financiere de Paribas <PARI.PA> the government had decided to speed up its five-year privatisation program with the aim of completing a third of it this year, ahead of the presidential elections expected in 1988. The accelerated program could provide additional unbudgeted revenue to boost industrial and research investment and spending on infrastructure such as the national motorway network. The government also today revived a proposal, blocked last year by Socialist president Francois Mitterrand, to encourage more flexible working hours, which it says will boost jobs by improving the competitiveness of French industry. The proposals allowing night-shift work by women and variations in the standard 39-hour working week are to be put to parliament as a self-contained draft bill after being vetoed for procedural reasons by Mitterrand and later the Council of State.