'Plan doesn't help purchasing power'
The left has attacked Sarkozy's economic rescue plan as too focussed on helping businesses
SARKOZY’S e26 billion plan to save the French economy has been criticized for not doing enough to improve ordinary people’s purchasing power.
Launching his plan with a speech in Douai, Nord-Pas –de-Calais, yesterday, Sarkozy said he hoped it would help France “overcome the crisis instead of undergoing it” and even “to come out of it stronger.”
It was largely welcomed by the right, who praised it as “ambitious” and “daring,” but the political left, and unions, were less enthusiastic.
Former Socialist presidential candidate Ségolène Royal described the plan as a series of “measure-ettes” which were “inadequate to face up to the problem.” The president of the National Assembly’s Finance Commission, the Socialist Didier Migaud, said: “Purchasing power is the glaring omission.” He said it was necessary to “massively boost demand” by lowering VAT and increasing benefits such as housing benefit.”
New Socialist leader Martine Aubry said a 1,000 euro prime à la casse (money paid to people who scrap a polluting car for a less-polluting one), would just be a windfall to beneficiaries, without bringing significant change. She criticised “deregulation of planning and procurement contracts.”
National Assembly Socialist group president Jean-Marc Ayrault said the plan was “too late and fragmentary.” Socialist Paris MP Jean-Christophe Cambadélis criticised focus on investment instead of encouraging consumption.
On the far left, the Parti Communiste Français said there should have been measures to increase salaries while the Ligue Communiste Révolutionnaire denounced the plan as “just for the bosses.” Left-wing senator Jean-Luc Mélenchon described it as “presents for businesses without real means to help the workers and families.” The CGT union said employers were the beneficiaries – notably of cuts in social charges.
Among right-wingers backing Sarkozy were the National Assembly’s UMP president Bernard Accoyer, who said: “This focus on investment will support business activity,” while UMP general secretary Patrick Devedjian said it would “give back confidence to the economic players.”
The UMP president of the National Assembly’s Economic Affairs Commission insisted the plan was “balanced” because it also had some measures to help the “poorest families.”
The centrist president of the Senate’s Commission des Finances said the plan would “give oxygen to businesses.”
The plan includes a billion euro loan for car manufacturers and five billion euros of new public sector investments.
Other details include a doubling of the amount available to be borrowed for zero-interest housing loans, planning laws to be relaxed, a bonus of e200 to be given to claimants of the new RSA income support that starts mid-2009, and small businesses (less than 10 staff) taking on staff paid up to 160% of the minimum wage to have no social charges in 2009.
It is hoped the plan will boost the economy by 0.6% in 2009. However it will also increase the budget deficit to 3.9% of GDP from an expected 3.1%.
AFP/Gérard Cerles
