Nicolas Sarkozy sets out stall for re-election
President Nicolas Sarkozy set out "shock measures" designed to show he has the "courage" needed to reinvigorate France's faltering economy three months ahead of elections.
Defending his efforts to save the euro and the French economy, Mr Sarkozy said: “The financial crisis is calming down. Europe is no longer on the edge of the abyss...The elements of a stabilisation of the financial situation in the world and in Europe are in place.”
Mr Sarkozy all but announced his candidacy for the two-round election, due to be held on April 22 and May 6. “I have a rendezvous with the French,” he said. “I will not shirk my responsibility.”
But the uncharacteristically downbeat president admitted to having "regrets" about some of his policies, which he said he would address "at the appropriate time".
His remarks came a day after Chancellor Angela Merkel of Germany backed his — as yet unannounced — re-election bid by unexpectedly announcing that she would join him on the campaign trail.
In a hour-long “do or die” TV interview broadcast simultaneously by nine channels, Mr Sarkozy adopted Churchillian tones as he unveiled measures from reducing working time and salaries to save jobs to raising VAT in order to cut employers’ contributions by €13 billion (£11 billion). However, the man who staked his presidency on boosting the French economy faces a tough task as he lags in the polls, unemployment stands at a 12-year high and public debt is at record levels.
Mr Sarkozy believes the reforms will show that, unlike his Socialist rival, François Hollande, he is brave enough to do the “dirty work” to save France.
As aides warned that the measures could provoke “street protests”, Mr Sarkozy appears to think he can win the begrudging praise afforded to David Cameron’s austerity measures.
Instead, he spent most of his airtime demonstrating that he intended to fight for France’s economic future until the last moment before entering the electoral arena.
The introduction of so-called “social VAT”, in which a value added tax rise would be matched by a decrease in employers’ payroll contributions, is aimed at increasing competitiveness and boosting French exports.
The German-inspired reform, which will raise VAT by 1.6 percentage points to 21.2 per cent, is a risky move that has cost previous governments dear. The mere mention of the measure at the beginning of Mr Sarkozy’s five-year term is blamed for the loss of dozens of UMP seats in 2007 parliamentary elections.
Under new “competitiveness accords”, employers will now be able to cut or raise working hours and cut salaries to save jobs if a majority of workers approve.
Mr Sarkozy said it would herald “the end” of France’s 35-hour working week. He also said that Socialist proposals to return to a retirement age of 60 were “madness” and “a lie”.
He also gave details of a financial transaction tax of 0.1 per cent to be introduced in France in August. He hopes the tax will be adopted across the European Union. Other taxes affected covered revenue from investments and property.
His television appearance came a week after Mr Hollande launched his campaign with an assault on “the world of finance”. He promised to reverse Mr Sarkozy’s legacy when unveiling his manifesto.
Mr Hollande plans to tax the rich and enact €20 billion in new spending by 2017, creating 60,000 new teaching jobs and 150,000 new jobs for young workers.
Mr Hollande earned plaudits for last week’s combative launch phase, and an opinion poll last week indicated he would romp home in the second round of the election, taking 56 per cent of the votes compared to Mr Sarkozy’s 44 per cent.
The president has been on the back foot since France lost its coveted triple-A credit rating, undermining his claim to having the safest pair of hands to steer the country clear of economic ruin.
He suffered a fresh blow when an Ifop poll published in Le Journal du Dimanche suggested voters see Mr Hollande the best candidate to tackle unemployment and debt reduction.He suffered a fresh blow on Sunday when an Ifop poll published in Le Journal du Dimanche suggested voters see Mr Hollande the best candidate to tackle unemployment and debt reduction.
But Mr Sarkozy said the notoriously "rebellious" French could yet defy the polls. "They won’t let anyone impose a decision on them," he said.
The opposition Socialists slammed the interview. “He appeared as a cruel commentator of President Sarkozy’s record,” said Socialist spokesman Bernard Cazeneuve – mentioning record unemployment and offshoring. “He simply forgot to say that he was responsible for it.”