Sarkozy to launch Phase II of economic reforms

30th August 2007, Comments 0 comments

PARIS, Aug 30, 2007 (AFP) - President Nicolas Sarkozy is Thursday to unveil Phase II of his economic reform programme for France, outlining a road map to jolt the economy into higher gear before a congress of business leaders.

PARIS, Aug 30, 2007 (AFP) - President Nicolas Sarkozy is Thursday to unveil Phase II of his economic reform programme for France, outlining a road map to jolt the economy into higher gear before a congress of business leaders.

Three months after taking over the presidency, Sarkozy is riding high in opinion polls but has faced disappointing figures on the economic front with second quarter growth falling below expectations, at 0.3 percent.

The data cast doubt on whether Sarkozy's right-wing government -- banking on stronger growth to finance a 13.6 billion euro (19 billion dollar) package of tax breaks adopted last month -- can meet its target of 2.25 percent growth for 2007.

In a speech to the summer congress of the MEDEF employers' federation at 3:00 pm (1300 GMT), Sarkozy was expected to announce a raft of measures to make French companies more competitive and boost consumer spending.

Presidential spokesman David Martinon said his address would "mark the second phase of economic reforms".

"This new stage will enable us to move ahead with the process of reform and help strengthen the competitiveness of the French economy," he said.

The MEDEF has applauded tax reforms adopted by Sarkozy's government, which scrapped payroll tax on overtime pay, capped personal taxation at 50 percent, and introduced a generous tax credit for new home-buyers.

But the federation's leader Laurence Parisot is also urging the government to take firm steps to slash the cost of doing business in France, encourage investment in small businesses and loosen rigid labour rules which are believed to discourage hiring.

European Commission President Jose Manuel Barroso was also due to address the MEDEF gathering, taking place at the campus of the HEC School of Management near Paris, ahead of a lunch with Sarkozy.

Half a dozen government ministers, several other European commissioners, trade union leaders and figures from the left-wing opposition including the Socialist mayor of Paris Bertrand Delanoe were also to attend.

The MEDEF congress comes a week after three explosive devices were discovered at the HEC campus, prompting an investigation by French anti-terrorist prosecutors.

AFP

Subject: French news

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