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A tale of two cities: French firms envy German conditions

From Juliet Mann, CNN
updated 1:41 PM EDT, Thu April 19, 2012
  • Two towns either side of the French-German border have contrasting economic fortunes
  • French Selestat has 7.4% unemployment, compared with 2.8% in German Emmendingen
  • French businesses say they envy the lower tax and labor costs across the border
  • They fear the burden on French business will increase after the forthcoming election

(CNN) -- Emmindingen is a small town in southwest Germany, with about 26,000 people and an enviable unemployment rate of just 2.8% .

But barely 20 miles away, across the French border, the picture is very different. The Alsatian town of Selestat has a similar industrial base, but an unemployment rate of 7.4%. Among young people, the contrast is even starker, with 23% of under-25s unemployed in the French town, compared to 1.8% in Emmendingen.

The differing fortunes of these neighboring border towns illustrate the complaints of many French businesses, as their country heads towards a presidential election.

Anne Leitzgen is the president of SALM Kitchens, a family-run business which has operated since the 1930s, and has one of the largest worktop production lines in Europe.

We are afraid money will be taken from our companies, and afraid that taxes will increase a lot
Anne Leitzgen, president of French kitchen manufacturers SALM

Despite a commitment to invest in Selestat, she worries about the increased costs of running a firm in France, saying taxes are higher, labor is twice as expensive, and workers' benefits are double those paid in Germany.

Leitzgen says she is concerned the next French government will tax companies like hers out of business. "We are afraid money will be taken from our companies, and afraid that taxes will increase a lot and the situation will become bad for companies our size ," she says.

Further, she says, the "relationship between the unions is more constructive and easier in Germany."

Across the border is the workplace of Emmanuel Foyer, a Frenchman who lives in his homeland but commutes to work in Emmendingen. Foyer, the sales manager for plastics industry solutions provider Braunform, believes a German focus on the long-term is behind the current success.

"In Germany, for sure, we are thinking of the long-term. In a company like this, [there's a] huge focus on training and the future of our employees," he says. "The approach in Germany to keep workers in times of low-load level means we were ready when the economy restarted."

I sincerely hope that jobs reforms will be put in place immediately
Marcel Bauer, mayor of Selestat, France

The trade-off for German workers is less job security, no national, fixed minimum wage, and less extensive social protections for the unemployed.

But the mayor of Selestat, Marcel Bauer, says it is time for France to make these changes to regain its economic competitiveness.

"As soon as the next president is in office -- be it the one we've got or a new one -- I sincerely hope that jobs reforms will be put in place immediately," he says. "The system needs to be more flexible. There is a lot that must change, starting with the mindset of employers and employees."

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