French jobless data may understate problem -paper

PARIS, Mar 7 (Reuters) France's jobless rate might have been 9.5 per cent at the end of 2006, a newspaper reported far higher than the official figure and potentially embarrassing for the government ahead of presidential elections.

Data released in January from national statistics office INSEE put the jobless rate in December at 8.6 per cent.

But it has delayed releasing its annual revisions of the unemployment numbers until after the April and May election, fuelling speculation it is under pressure from the government to drag its feet because the actual number is much higher.

Le Monde daily said yesterday that three government workers had calculated that the unemployment rate was around 9.5 per cent at the end of the year, based on International Labour Organisation standards.

The trio, of whom two work for INSEE and one is a unionist at the National Employment Agency (ANPE), produced a 15 page report on their findings which they e-mailed anonymously to several economists.

INSEE declined to comment on Le Monde's report.

Official numbers show that the unemployment rate has dropped steadily from around 10 per cent when Prime Minister Dominique de Villepin took office in June 2005.

He and his government have used this decline in the run-up to the election, saying it is a sign that their economic policies have borne fruit.

High unemployment is one of the key issues in the election campaign so any evidence that the fall in the jobless rate was much weaker than the current figures would be a blow to centre-right candidate Nicolas Sarkozy.

Villepin has denied any interference with the release of the revised INSEE numbers and the statistics office has said the delay until the autumn of 2007 is due to technical problems.

Reuters SRS VP0428