French President Francois Hollande has set out a €2 billion job creation plan in an attempt to lift France out of what he called a state of “economic emergency”.

Under a two-year scheme, companies with fewer than 250 staff will get subsidies if they take on a young or unemployed person for six months or more.

In addition, about 500,000 vocational training schemes will be created.

France’s unemployment rate is 10.6%, against a EU average of 9.8% and 4.2% in Germany.

Francois Hollande said money for the plan would come from savings in other areas of public spending.

“These €2 billion will be financed without any new taxes of any kind,” said Francois Hollande, who announced the details during an annual speech to business leaders.

“Our country has been faced with structural unemployment for two to three decades and this requires that creating jobs becomes our one and only fight.”

France was facing an “uncertain economic climate and persistent unemployment” and there was an “economic and social emergency”, he said.

Francois Hollande said recently that France’s social emergency, caused by unemployment, was as serious as the emergency caused by terrorism.

The president called on his audience to help “build the economic and social model for tomorrow”.

He also addressed the issue of labor market flexibility.

“Regarding the rules for hiring and laying off, we need to guarantee stability and predictability to both employers and employees. There is room for simplification,” Francois Hollande said.

“The goal is also more security for the company to hire, to adapt its workforce when economic circumstances require, but also more security for the employee in the face of change and mobility”.