French President Francois Hollande has warned that his country is in a state of economic emergency and has unveiled a €2b two-year job creation plan. The proposal aims to offer subsidies to small firms in a bid get them to take on more employees.

Speaking at an annual speech to business leaders, Hollande said: "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. He warned that France was facing an "uncertain economic climate and persistent unemployment".

France was in a state of economic and social emergency, he said. France's unemployment rate is 10.6% against a European Union average of 9.8% and 4.2% in Germany. In the UK, unemployment stood at 5.4% in June to August, the lowest point since 2008.

Under the two year plan, companies with less than 250 employees will be handed subsidies if they take on young or an unemployed person for six months or more. The government will also set up around 500,000 vocational training schemes.

Hollande was quick to assure that the new funding will not be raised from fresh taxes. He said the proposal will be funded from savings in other areas of public spending. "These €2b will be financed without any new taxes of any kind," the president said.

He also touched on the issue of labour 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," he explained.

"The goal is 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," he added. The BBC however does not believe the plan will bear fruit in time for the presidential elections scheduled in a little over a year.

The broadcaster said President Hollande "desperate needs good news on the jobs front", noting that there is a huge gap so far between his words and his achievements.