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Last Updated: Thursday, 24 January 2008, 03:06 GMT
Economic plan is challenge to Sarkozy

French President Nicolas Sarkozy has welcomed a report from a commission of experts containing far-reaching proposals for boosting economic growth in France. The BBC's Alasdair Sandford in Paris asks how far he is likely to go in implementing them.

French economist Jacques Attali, left, hands French president Nicolas Sarkozy a copy of a report by the commission he heads, at the Elysee palace in Paris on 23 January 2008
Attali said the proposals could lead to the creation of two million jobs
Earlier in his presidency, French President Nicolas Sarkozy had been typically bullish when faced with a rather pessimistic economic forecast.

France, he said, would go in search of the missing growth "with its teeth".

But by the beginning of this year, the president appeared surprisingly toothless when challenged to explain why people's spending power remained stubbornly low.

"What do you expect of me?" he demanded. "That I raid the till when it's already empty?"

That disarmingly honest assessment of the state of the nation's finances - not to mention the current global financial crisis - has put the commission's proposals on ways of achieving economic growth into sharp focus.

A grand plan

In his presentation at the Elysee, commission head Jacques Attali played up to the grandeur of the surroundings.

He quoted the reformist 18th Century economist Jacques Turgot addressing Louis XVI, imploring "your Majesty" Nicolas Sarkozy to implement the principles "without being frightened by the inevitable clamour of opposition".

What you propose, we will carry out
Nicolas Sarkozy on commissioning the report

When he had appointed Francois Mitterand's former economic guiding light to its head last August, President Sarkozy had appeared to give the commission carte blanche.

"What you propose, we will carry out," he said.

However, while he has welcomed the broad thrust of the report, the president has rejected some ideas, such as scrapping France's administrative departments and the monopoly enjoyed by chemists.

An investment in education

The proposals as a whole are wide-ranging: France is advised to tighten constraints on job markets and open up to competition over-regulated sectors of the economy, such as the retail trade and professions such as taxi-driving and hairdressing.

The country should invest massively in education, overhaul regional government and encourage more immigration to offset a labour shortage.

President Sarkozy, who has made a priority of curbing illegal immigration, pointedly steered clear of responding to that idea.

Jacques Attali said there was a need to "attract, as the UK is doing, the best and the brightest of the world".

The immigration minister, Brice Hortefeux, later denied there was any clash between the proposal and the government's policy.

French President Nicolas Sarkozy (left) and Jacques Attali
Sarkozy appeared to give the commission carte blanche
The commission's members will be watching closely to see whether the president remains true to his word in accepting the report.

Some, such as Harvard economics professor Philippe Aghion, said the programme amounted to a "revolution", adding that he fully expected it to meet stiff opposition.

"Several members of the commission were subject to pressures by various interest groups to try and influence them," he said after the launch.

"You can't imagine how important those vested interests are in France. I'm very interested to see how far Sarkozy will go."

Revolutionary programme?

Some groups, including the main employers' federation, MEDEF, and others representing French industry, have welcomed the report.

But France's National Taxi Drivers' Federation has announced plans to stage protests against what it called a drive to "deregulate" the trade.

It said Parisian taxis were being made scapegoats at a time when livelihoods were already threatened by fuel price rises.

Jacques Attali himself has warned of the "great risk that our work will become just another report".

President Sarkozy has argued there is a need for deeper reforms than those his government has embarked upon.

Yet he also knows that politics is very much about the short term.

According to one opinion poll this week, a majority of people (56%) now thought the government's economic policies were "bad" - a rise of 20 percentage points in four months.

Many in the president's own party fear the Attali proposals will only further incur the wrath of voters at forthcoming local elections in March.

SEE ALSO
Sarkozy gets economic reform plan
23 Jan 08 |  Business
Sarkozy proposes new internet tax
09 Jan 08 |  Business
France seeks new growth measure
08 Jan 08 |  Business

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