Sarkozy defends economy revival plan

6th February 2009, Comments 0 comments

Nicolas Sarkozy attempts to appease the public by giving a detailed interview on the economic stimulus plan in a TV interview.

PARIS – President Nicolas Sarkozy vowed Thursday to stick by his plan to revive the French economy by investing in business rather than by funnelling money to households, despite mounting public anger.

In a major prime-time interview carried simultaneously on several television networks, Sarkozy defended his handling of the economic crisis while admitting that the French have every right to be concerned.

"It's normal that the French are worried. It's a crisis the like of which the world has not seen for a century," he said, addressing the nation one week after more than a million strikers took to the streets to protest.

Sarkozy's left-wing critics accuse him of shovelling billions of euros into banks and industries while ignoring the working poor, and demand lower sales tax, increased wages and cash grants for the poor.

Confronted by plunging approval ratings and threats of further unrest, Sarkozy invited the cameras into his Elysee Palace residence to make a detailed 90-minute defence of his 26-billion-euro stimulus plan.

Firstly, he dismissed the notion that in setting aside billions to recapitalise fragile banks and guarantee deposits he had showered money on those responsible for the crisis while ignoring its victims.

"The money loaned to the banks will not only cost the French people not one cent, but will bring in money," he declared, predicting that the state will earn EUR 1.4 billion in interest this year on money loaned to banks.

And, in a gesture to the previous week's protesters, he said the money thus earned would be spent on social measures, including an increase in welfare payments to families and vouchers for the elderly to hire home helps.

He added that he would meet trade unions and employers' associations on 18 February to discuss France's response to the downturn.

This meeting would allow these players to discuss profit-sharing within companies so that employees and not only shareholders can enjoy a stake in successful firms, he said.

"How can we mediate between the legitimate demand of shareholders to earn money from firms and the demand of employees to be involved with the profits that they help to create?" he mused.

But these gestures aside, Sarkozy said he would not be budged on the main thrust of his reform programme, having been elected in 2007 on a promise to cut taxes and slim down France's large public sector.

"I won't undertake any extra public spending, notably on the rule on not replacing one public employee in two," he said, vowing that by replacing only half of retirees he will reduce the civil service to its 1992 size.

"We will get rid of local taxes on business in 2010, I want us to keep factories in France," he added, noting that France still has high levels of manufacturing compared to Britain, with its service economy.

He said that Britain had decided to attempt a demand-led recovery plan but "that will bring them nothing".

"Consumption continues to decrease in Britain," he said.

Trade union leaders have warned that they will call for more strikes and protests unless Sarkozy backs down on a number of reforms, and students have already begun to march against reforms to higher education.

"We have a lot of protests in France. If you have to stop every reform because of a protest, then you'd be better off not having any reforms," shrugged Sarkozy, promising to push forward with his plans.

"Naturally, we are going to continue to reform the country. That's the mandate I received, that's my duty."
[AFP / Expatica]  

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