Announcing a two-year 26 billion Euro (US$32.9 billion) stimulus package on Thursday, French President Nicolas Sarkozy said the global crisis would result in long term changes to the economy, society and politics.
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| France's President Nicolas Sarkozy announces his economic stimulus plan on December 4, 2008 in Douai, North of France. [AFP PHOTO] |
The package, which amounts to 1.3 percent of France’s GDP, includes measures to boost the ailing construction and automobile sectors, and a major increase in spending on roads, railways, hospitals and education.
In a wide-ranging speech, the President, who was elected on a center-right ticket but was last month labeled a closet socialist by the Economist, reaffirmed his belief that the crisis would profoundly change the world. Demands for regulation, protection and justice would refashion relationships between the state and the market, finance and production, and between capital and labor, he said.
He also said that major emerging countries would no longer accept their exclusion from world governance.
Sarkozy said massive investment is the answer to the crisis and governments cannot restrict their actions to damage limitation but must display ambition, audacity, and imagination.
While he emphasized the need to lay the foundation for the jobs of tomorrow, he made it clear that with unemployment above the politically sensitive 2 million mark, his short term aim was to preserve existing jobs.
The 1.8 billion Euro boost to the construction industry will include 100,000 units of social housing to be built in 2009-10, and a doubling of zero-interest loans available to people on low incomes.
The President stated that he intended to do whatever it takes to preserve the French automobile industry which, he said, directly or indirectly employed 10 percent of France’s workforce.
To boost car sales there will be a subsidy of 1,000 Euros for car buyers who exchange older vehicles for new, low-emissions models. The state will also provide a one billion Euro line of credit to refinance vehicle purchase loans.
Anticipating accusations of protectionism, and with an eye on Washington negotiations on the future of American carmakers, Sarkozy said “I believe in globalization, I believe in free trade, I believe in the market economy. But if our American friends do more for their industry, I will not leave the French automobile industry at a disadvantage…I will not let French industry be dismantled.”
(China.org.cn by John Sexton, December 5, 2008)