Sarkozy unveils $550 million jobs plan before vote

January 18, 2012 - 9:55 AM
France Politics

French President Nicolas Sarkozy, center, shakes hand with MEDEF union president Laurence Parisot prior to a meeting with unions at the Elysee Palace Wednesday Jan. 18, 2012. Representatives of unions and members of the French government are gathered at the Elyysee for a Crisis Summit. Visible at right is prime minister Francois Fillon. (AP Photo/LionelBonaventure/Pool)

PARIS (AP) — President Nicolas Sarkozy announced a euro430 million ($550 million) plan to drive down unemployment and restart growth Wednesday, a move criticized as an attempt to boost his popularity three months before France's presidential election.

With the unemployment rate pushing 10 percent and the recent downgrade of France's credit rating by Standard & Poor's, Socialist candidate Francois Hollande is hitting the president hard, saying the financial crisis reflects Sarkozy's failed economic stewardship.

Sarkozy, who is trailing Hollande in polls, has countered that the crisis is Europe-wide and that French people who are suffering need help now. To that end, he met with business and labor leaders on Wednesday to formulate a plan to create more jobs and ease the pressure on those looking for work.

It's unclear whether Sarkozy's government can put the jobs plan in place before the presidential elections, held in two rounds in April and May.

"The current economic situation in France as in Europe is very perilous. It's urgent," Sarkozy said in the opening remarks of the closed-door session, according to a transcript made public by his office.

In a clear rebuttal to his critics, Sarkozy told reporters after the meeting: "Regardless of the political calendar, the crisis, unemployment, the suffering of our compatriots don't give any of us the right to stay immobilized, inactive."

He said he'd proposed a euro430 million ($550 million) jobs plan in the meeting — a relatively minor package compared to France's euro1.9 trillon GDP.

The measures include increasing aid to those forced to take unpaid leave, training for the unemployed and incentives to hire young people. He also suggested creating a state-funded body to invest in industry.

But he gave little detail on his main plan to increase France's competitivity and spur hiring: reducing the amount companies contribute to the social benefits system, and raising the sales tax to make up for the shortfall.

After Wednesday's meeting, Bernard Thibault, head of the CGT labor union, said he didn't think the measures outlined would "have a real impact on the current employment situation."

Thibault and representatives of other hard-charging unions said they wanted more details on Sarkozy's main plan, which they've resisted because it would shift some of the burden of paying for generous social benefits from businesses to all consumers — including workers.

"We refuse to see household budgets diminished," said Philippe Louis, head of the CFTC union.

In his speech to the meeting, he compared France, at times unfavorably, with "our main competitor ... Germany" — the bellwether of economic success in Europe. Germany retained its triple-A rating from S&P when France lost it last week.

Sarkozy said French labor costs have risen 20 percent between 2000 and 2009, compared to 7 percent in Germany. He said the relative cost to employers for a worker who earns a gross monthly salary of euro2,500 ($3,200) was twice as high in France than in Germany.

Sarkozy's gamble is that reducing those costs will spark a hiring spree.

But labor unions insist workers shouldn't have to pay the cost of the financial crisis at a time when many French companies are still making profits, and accuse Sarkozy of putting together a slapdash solution ahead of elections.

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Associated Press writer Sarah DiLorenzo contributed to this report.