Sarkozy proposes new measures to help crisis-hit workers

French president Nicolas Sarkozy went on television for the second time in two weeks tonight, in the hope of heading off France’s looming social crisis.

Trade unions have called for a second "day of national action" on March 19th, and the Élysée fears protest could surpass the more than one million French workers who went into the streets on January 29th.

Mr Sarkozy's speech was broadcast at the end of the first day of his negotiations with France's leading trade unions and business management groups. The president proposed seven social measures intended to help the lower middle classes, costing the state €2.6 billion.

The social measures, which include one-time tax breaks and cash bonuses, amount to only 10 per cent of the €26 billion which the government is investing in infrastructure and projects under the economic stimulus plan announced by Mr Sarkozy last December.

Reacting to Mr Sarkozy's speech, the socialist party spokesman Benoit Hamon called it "alms for those most weakened" by the crisis.

Mr Sarkozy began by saying that predictions for coming months are "worrying" but that "they are worse elsewhere". The fact that France is weathering the crisis better than others "is not a consolation".

France could come out of the crisis rapidly and stronger "on condition we don't repeat the errors of the past," Mr Sarkozy said. It was important not to "sacrifice the future to the present" nor to "ruin the competitiveness of our country."

Mr Sarkozy said it would be a mistake for him to give in to pressure to increase France's minimum wage, "which concerns barely one wage-earner in 10" and would force small enterprises to lay off workers.

The first social measure outlined by Mr Sarkozy is to raise benefits from 60 per cent of former gross salary to 75 per cent for workers who have been reduced from full-time to part-time schedules.

He promised a one-time bonus of €500 for young people who can prove they worked for at least two months.

The state will help finance an an investment fund of up to EUR3bn to train the jobless. Bosses who fire staff will not be eligible for bonuses. "It's an element of justice," Mr Sarkozy said.

Four million households in the lowest French tax bracket will be exonerated from paying two thirds of their income tax this year. As most have already paid the first third, this means they will pay no more this year, a savings of some €400 for a family with three children, Mr Sarkozy said.

Three million French families who normally receive a back-to-school allowance in September will receive the €150 bonus in June.

Hundreds of thousands of families with people with disabilities, as well as unemployed people who find a job, will receive government coupons which they can exchange for €200 worth of domestic help. The plan "will make work and create service jobs," Mr Sarkozy noted.

Returning to the themes that have been the hallmark of his political career, Mr Sarkozy emphasised the importance of continuing reforms, for example of the hospital system, lycées, universities, research and professional training.

"Everywhere, we must rehabilitate the value of work, which is the key to everything," he said. "Putting the value of work in the heart of our economy is an absolute priority."

The top 40 French companies are distributing close to €50 billion in dividends for 2008, Mr Sarkozy said. "It is my role as head of state to say that part of it should be given to employees... The status quo is not tenable."

Mr Sarkozy has asked trade unions and management to discuss profit-sharing. "If progress is not made, the state will quickly assume his responsibilities," he said.

The only worthwhile path, Mr Sarkozy concluded, was the path "of effort, of justice and the rejection of simplistic solutions". He'd been "elected to take decisions, to rise to difficulties and propose solutions". The measures announced tonight were "my response to the social consequences of the crisis."