Post date: Jan 29, 2012 9:20:6 PM
PARIS, FRANCE (JANUARY 29, 2011) (TF1) - French President Nicolas Sarkozy announced a swathe of new economic reforms on Sunday (January 29) to create more jobs, improve business competitiveness and convince voters he is the right leader to revive France's sputtering economy.
French President Nicolas Sarkozy announces a hike in value added tax as part of a range of economic reforms to cut the cost of labour and boost the economy, says Europe is over the worst of the financial crisis.
Three months before presidential elections in which Sarkozy has yet to announce his candidacy, the incumbent is focused on economic competitiveness, amid a long-running euro zone crisis and what many economists believe is a mild recession in France."With caution, I think we can say that the elements of a financial stability in the world and of Europe have been laid down. The economic crisis is still there, extremely profound, but the financial crisis at the beginning of this year 2012 -- the measures that were taken by France, the measures taken by Europe, the regulation measures that were taken by the G20, allowed things to stablise," Sarkozy said, in the interview televised on nine channels.
Sarkozy said France's budget deficit could come in at a better-than-forecast 5.4 percent or even 5.3 percent of gross domestic product for 2011.
"I can tell you one element, as proof -- France will announce in the coming weeks, a much better deficit result than anticipated. We committed ourselves to getting a deficit equal to 5.7 percent of our GDP, we are sure at this very moment of being at 5.4 and maybe at 5.3 percent," he said.
The French government said earlier this month the 2011 deficit could be less than 5.5 percent of GDP, below an official target of 5.7 percent.
In a bid to boost competitivity of labour in France, Sarkozy said he would waive some employer social security payments and that this would be financed by a 1.6 percentage point increase in value added tax, combined with a two point rise in social charges on unearned income.
Sarkozy also announced measures that would allow employees in companies where a majority voted in favour to abolish the 35-hour working week, a measure introduced in the mid-1990s by the Socialist government of then prime minister Lionel Jospin.
Challenged by his interviewers as to whether it spelt the death of the measure, Sarkozy snorted: "Well, if you look at it that way, it's good news. Honestly, in any case these 35 hours weren't copied from us by anyone in the world and lead us to catastrophe."