France

Sarkozy seeks to calm fears over economy

Article published on the 2009-02-06 Latest update 2009-02-06 11:58 TU

President Sarkozy on prime time TV
(Photo : Reuters)

French President Nicolas Sarkozy spoke to the nation on prime time national television on Thursday evening. The broadcast was aimed at calming fears over the effects of the global financial crisis on the economy.

For 90 minutes, the President answered questions from a panel of high-profile journalists on issues ranging from the controversial billion euro bail-out package for French banks to measures to boost employment.

He defended the banking package by insisting that it would not cost French taxpayers a single centime. It was a loan, he said, which would bring in 1.4 billion euros in interest by the end of the year. He has already said the bank bosses must forego all bonuses for 2008.

Abolishing a local tax on businesses by 2010 was the only concrete proposal announced by Sarkozy, although he is to discuss a raft of other measures with trade unions and employer's associations on 18th February.

These include profit-sharing within companies and possible changes to the rate of income tax for some employees.

The President insisted that despite the current economic woes he would stick to his plan to revive the French economy by investing in businesses rather than boosting consumer spending. He said that Britain was attempting a demand-led recovery plan that would "lead to nothing".

He also refused to back down on his reform programme which aims to cut taxes and slim down the country's large public sector. He has vowed to reduce the civil service to its 1992 size.

In a surprise move, Sarkozy hinted that he may decide not to stand for second term as President.

"My job is very difficult," he said, "It's needs a lot of energy [...] there's still three and half years to run and I give no undertaking in one direction or the other."

Critics of the President say he has done nothing to help the unemployed or people on low incomes.

French unions are to meet on Monday to decide whether to renew calls for a general strike similar to the one that brought millions of people onto the streets on 29th January.