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Sarkozy unveils stimulus package

Paris: French President Nicolas Sarkozy has announced a massive €26 billion bailout plan to help his country pull itself out of recession.

A sizeable amount of this money will go to the troubled auto industry while the construction business which is in the doldrums will also benefit. The car and construction industries together account for some four million French jobs and have been the hardest hit by a recent rise in the country’s jobless figures

Mr. Sarkozy who announced his plan during a visit to a car factory said his package would stimulate the economy and create 1,00,000 new jobs. The country’s two main car manufacturers have resorted to large scale temporary layoffs in response to a huge slump in sales.

“Our answer to the crisis is a massive investment drive, because that is the best way to support businesses and to protect jobs,” Mr. Sarkozy said. He announced €10.5 billions in state investments for 2009, pulling forward four billion euros of scheduled transport, education and defence projects, as well as ploughing four billion euros into the state energy, transport and postal companies.

To improve business cash flow, Mr. Sarkozy said the state would speed up the repayment of sales tax and of tax refunds for research and development investments, measures worth €11 billions. Most of the money in the two-year plan is aimed at the construction industry. Unemployment figures jumped by 49,000 in October — the largest singly jump in 15 years. France, which has one of the highest unemployment rates in Europe, narrowly missed falling into a full blown recession.

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