French President Nicolas Sarkozy on Thursday unveiled a 26-billion-euro (33 billion U.S. dollar) stimulus plan to revive the French economy, focusing on investment in infrastructure rather than directly aiding consumers.
Sarkozy announced the plan amid a trip to Douai in northern France, home of French famous car brand Renault's factory.
"The crisis we are facing is not a transient crisis but a structural one," said Sarkozy, "It prompts us to act quickly, act strong."
"Our answer to this crisis is investment, because it is the best way to support business and save the jobs of today, and the only way to prepare for the jobs of tomorrow," Sarkozy said. He described the plan an investment-driven bid to stimulate growth and employment.
France is the latest European Union country to open state coffers to confront the sharp economic downturn. The plan combines state infrastructure projects with targeted measures, including cash-flow improvement for businesses, projects, support for the car industry and the construction industry, which are hardest hit by the crisis.
"The state is ready to do everything to save the automotive industry, which accounts for 10 percent of the workforce in France," Sarkozy said, announcing an incentive offer of 1,000 euros (1,260 dollars) for every purchase of a new vehicle to replace the old one.
The plan earmarks 10.5 billion euros (13.23 billion dollars) of additional public investment next year. It includes 4 billion euros (about 5 billion dollars) to be injected into the state energy, transport infrastructure and postal industries, and 4 billion euros (5 billion dollars) for sustainable development, education and defense projects.
According to the president, the plan accounts for 1.3 percent of the French gross domestic product (GDP), and is expected to boost French economic growth by around 0.6 percent next year. However, the plan will also bring France's public deficit rate to 3.9 percent of the GDP against the previous target of 3.1 percent.
Except the 26-billion-euro package, Sarkozy also promised 11.5 billion euros (about 14.5 billion dollars) of credits and tax breaks on companies' investment in 2009.
France has so far escaped economic recession thanks to the slight growth in the third quarter in 2008. But the OECD (the Organization for Economic Cooperation and Development) forecasts it will fall into recession in 2009.
Source:Xinhua
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