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France's Labour, Employment and Social Dialogue Minister Michel Sapin speaks during the questions to the government session at the National Assembly in Paris September 11, 2012.

BENOIT TESSIER/REUTERS

The number of unemployed in France topped the 3 million mark in August for the first time since 1999, its labour minister said on Wednesday, adding to President Francois Hollande's woes as he seeks to revive a stalled economy and his tumbling poll ratings.

Michel Sapin said August's unemployment data would show a 16th consecutive monthly rise and blamed former President Nicolas Sarkozy for increasing insecurity in the jobs market.

"It's bad. It's clearly bad," Mr. Sapin told France 2 television. "But this is the result of a policy: in reality, these 3 million unemployed were here when we arrived in office."

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Socialist Hollande won power in May with a pledge to revive the euro zone's second largest economy and tackle rising unemployment while respecting France's EU public deficit target of 3 per cent of gross domestic product (GDP) next year.

But his plans have been waylaid by thousands of layoffs by major companies including carmaker PSA Peugeot Citroën, drugmaker Sanofi, airline Air France-KLM and retailer Carrefour SA.

"We haven't seen the peak of the crisis yet from a social point of view," Mathieu Plane, economist at the French Economic Observatory (OFCE), told Reuters television. "There are almost one million more unemployed people compared with early 2008 and we can't yet say that we have reached the peak."

France's €2-trillion ($2.6-billion U.S.) economy has posted three consecutive quarters of zero growth. Weak PMI data for September suggested it would contract in the third quarter as tax rises, unemployment and flagging exports weigh.

With voters frustrated by unemployment already running at a 10-year high, Mr. Hollande's approval ratings hit a new low of 43 per cent, according to an Ifop poll on Sunday.

Earlier this month, Mr. Hollande staked his political reputation on reversing the upward trend in unemployment by the end of next year, after an overhaul of the labour market currently being negotiated with unions and employers.

"That is a risky bet," said Jean-Claude Mailly, secretary-general of the Force Ouvriere union, told Europe 1 radio. "When growth approaches zero, unemployment grows and it is an almost automatic effect."

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Confidence among consumers – the motor of the French economy – slipped in September to a seven-month low, data showed on Wednesday.

"Confidence is weak both with companies and, even more so, with households. It's not really surprising given the economy has fallen in recession and the private sector is facing the biggest tax hike in decades," Bruno Cavalier, analyst at Oddo securities, wrote in a report on Wednesday.

The 2013 budget, due to go before the cabinet on Friday, is expected to contain more than €30-billion in budget savings – the harshest adjustment in decades. Economists have warned that some €20-billion in tax rises, split evenly between households and businesses, risk exacerbating the downturn.

The rise in long-term unemployment, particularly among the young, also risks destroying human capital and having long-term repercussions on France's potential growth rate, they say.

"Unemployment is high and it will stay high. For me there is no future," said Gilles, a 49-year-old standing in line at an employment agency in Paris. Declining to give his name, he said he had drifted between short-term job contracts and unemployment for the past 12 years.

"The only way to solve this problem would be to force companies to hire people, to hire me for example!"

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