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Paris Rejects 'Obama-Style' Stimulus Program
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Bianca
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Paris Rejects 'Obama-Style' Stimulus Program
«
on:
February 03, 2009, 09:32:06 am »
Paris rejects 'Obama-style' stimulus program
Bloomberg News
Published: February 2, 2009
LYON:
Prime Minister François Fillon on Monday rejected demands that the French government seek to stimulate consumer spending, rather than follow his plan to stimulate corporate and infrastructure investment, to lift France out of its economic slump.
"It would be irresponsible to chose another policy, which would increase our country's indebtedness without having more infrastructure and increased competitiveness in the end," Fillon said in a speech in Lyon.
More than 1.1 million people took to the streets across France last Thursday, according to the Interior Ministry, with unions putting the number of protesters at 2.5 million, to call on President Nicolas Sarkozy to stop cutting government jobs, increase the minimum wage and spend more on households as the economy enters its first recession since 1993.
Opponents of the government have been calling for an "Obama-style" stimulus plan, one that puts money directly into the pockets of working people.
French unemployment rose by about 45,000 people in December, Finance Minister Christine Lagarde said Monday, taking the jobless ranks to the highest level in about two years.
The European Commission expects France's economy to contract 1.8 percent this year, the worst performance since World War II. Lagarde said the government would revise its economic forecast to project a contraction this year.
After the strike, Sarkozy adopted a conciliatory tone, noting that the public had "legitimate concerns," and he said he would meet with union leaders in February to explain his 2009 agenda and discuss how to best carry it out.
In December, Sarkozy announced a stimulus package worth €26 billion, or $33.4 billion, over 2009 and 2010, including €11.4 billion in early state reimbursement to companies, and about €10 billion in infrastructure investment by the government, local authorities and state-controlled companies.
Fillon said Monday that Électricité de France would increase investment this year by €2.5 billion to build and renovate new power plants and its grid. GDF Suez, the natural gas and water utility, would lift investment by €200 million.
The Paris transportation authority and the national railroad would increase investment on new trains and infrastructure by €1.35 billion.
The government would spend €400 million on road building and renovation, €300 million on railroads, and €170 million on ports and river infrastructure. It would spend €731 million on universities and research centers and €620 million to renovate prisons, courts and more than 70 monuments and 50 cathedrals.
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