France - explainer

Sarkozy's financial stimulus

Article published on the 2008-12-05 Latest update 2008-12-12 17:25 TU

President Nicolas Sarkozy announces 26 billion euro stimulus plan.
(Photo: Reuters)

Nicolas Sarkozy unveiled a 26-billion-euro financial package on Thursday designed to help protect the country against the economic slowdown. What does it include? And how will it help the French economy?

Sarkozy's financial package is one of a number of plans across Europe designed to guard against recession.

It includes a number of measures intended to help business and boost housing.

• 10.5 billion euros in state investment, including projects such as four new high-speed TGV train lines, as well as money for energy and the post office; this amount brings forward four billion euros from already scheduled projects;
• 700 million euros of tax breaks and incentives for French businesses to help job creation and ease unemployment;
• 1.5 billion euros for the car and construction industries; including 300 million euros for restructuring the car industry and one billion euros to support Renault and Peugeot.
• A 200-euro one-off bonus for the lowest-income families to help boost consumer spending;

The plan, worth about 3.9 per cent of the French gross domestic product for 2009, will put the government another 15 billion euros in debt.