€26b rescue plan comes under fire

CRITICS of the 26 billion euro rescue plan for the economy say the government needs “to take the bull by the horns before it is too late.”

Socialist Party leader Martine Aubry claimed there was little new action in the government’s economic stimulus plans which were revealed by Prime Minister François Fillon on Monday.

Aubry said: “Of course we want investment, but this is not a genuine relaunch plan.”

“The prime minister revealed details of projects which the state is already engaged in.

“We need to take the bull by the horns and act now with serious measures. After, it will be too late,” she added.

Aubry also said many of the new measures announced would not come into effect until 2011 -2012, and added: “What we want is immediate action in order to get through this time of crisis.”

Defending the plan in Lyon on Monday, Mr Fillon said: “I know that our country is gripped by doubt, by fears, by protests.”

“We are going to fund concrete projects that support business, create work for our companies, that protect jobs," he said, while unveiling a list of 1,000 public works projects to benefit from state funds.

Socialist spokesman on economic affairs Michel Sapin said: “The state is simply dressing up old spending as new."

The plan includes details of some €870 million to be pumped into transport, €730 million into research and universities, €620 million on culture and heritage renovation work, and €1.1 billion used to build and renovate social housing.

It also includes some €1.3 billion euros in aid and hiring subsidies for small business, as well as €220 million in bonus payments for the scrapping of polluting cars.

Several billion more are spread across dozens of small-scale projects, from energy-efficient farming to boosting security in mental hospitals - with planned investments pulled forward to the period 2009-2010.

Split into three categories, the French stimulus plan includes €11.1 billion euros of direct state investment and four billion euros of investment by state-owned energy and transport firms.

Another €11.4 billion will come in the form of treasury facilities to help improve business cashflow.

Minister in charge of the relaunch Patrick Devedjian criticised the “incantations” of the socialists assuring he would maintain dialogue with party representatives.

French unemployment figures jumped by 45,800 in December to 2,110,000 jobless, official figures showed Monday, an 11.4 % increase over a year.

"France is no exception to a trend that is affecting the whole of the world," Fillon said.

"What we hope is that the measures we are now taking will help France to improve its outlook compared to these forecasts."