Sarkozy rejects scandal, pushes pension reform

13th July 2010, Comments 0 comments

French President Nicolas Sarkozy rejected claims he took illegal cash donations from France's richest woman, seeking to calm the scandal before the launch of a major retirement reform on Tuesday.

Sarkozy gave a prime-time television interview on the eve of a cabinet meeting to officially launch plans to raise the retirement age from 60 to 62, in a sweeping pensions overhaul that labour unions have vowed to fight.

The plan is a centrepiece of Sarkozy's reform agenda as he eyes a reelection bid in 2012, but it has been overshadowed by a huge political funding scandal that has hit his Labour Minister Eric Woerth.

Sarkozy backed Woerth, who as chief fundraiser for Sarkozy's 2007 campaign is accused of accepting 150,000 euros (190,000 dollars) from L'Oreal heiress Liliane Bettencourt, and declared "France is not a corrupt country."

"The political class, left and right alike, is in general honest. French public officials are people of great rigour," he said in the interview on public broadcaster France 2.

The three-week scandal has weakened Sarkozy, whose poll ratings have hit their lowest level since he took office in 2007 and who is fighting a difficult battle over the pension reform.

The president insisted Woerth will stay on as labour minister to enact the reform but said he would advise him to step down as treasurer of the majority UMP party to "devote himself exclusively to pension reform."

The leader of the opposition Socialists Martine Aubry pounced on Sarkozy's sole concession. "It means he recognises there is a conflict of interest," she said on the television channel France 3.

Woerth's role as treasurer fuelled accusations of a conflict of interest, along with revelations his wife helped manage Bettencourt's 17-billion-euro fortune when as budget minister he was tasked with fighting tax dodgers.

Sarkozy rejected the allegations, including reports that former Bettencourt accountant Claire Thibout had accused Sarkozy of himself taking envelopes of money from the billionaire when he was mayor of the town of Neuilly.

"I was described as someone who for 20 years has been going to Mrs Bettencourt's house to pick up envelopes. It's shameful," Sarkozy said.

Bettencourt, 87, is France's richest woman and was one of the biggest beneficiaries of a tax break for the wealthy passed by Sarkozy after he won the 2007 election, receiving a lawful 30-million-euro rebate.

Opposition Socialists have demanded an independent magistrate be appointed to investigate all the allegations surrounding the Bettencourt fortune, and have also joined unions in attacking Sarkozy on the pensions front.

Like many other European countries, France is facing a funding shortfall in its pensions plan due to a growing older population and fewer working-age people paying contributions.

Sarkozy complained that 10 percent of France's pension payments were currently financed by debt and pointed to the higher retirement ages of its European neighbours and the effect of population changes.

"Since 1950 we have gained 15 years of life expectancy," he said. "If we are going to live 15 years longer it is understandable that we are going to work two years longer."

Sarkozy's opponents complained of his unbending position on the pensions plan, which they say puts an unfair burden on workers.

"The president of the republic has been deaf to the problems of the French and to the injustices," said the leader of the CFDT union, Francois Chereque.

Aubry said Sarkozy had signalled "no change of course that could offer hope in the face of this moral crisis we are going through and this terrible economic and social crisis.

"He goes on like before, self-assured and self-satisfied."

© 2010 AFP

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