Sarkozy moves to limit job cuts

Mr Sarkozy wants EU countries to have sovereign wealth funds

French President Nicolas Sarkozy says he plans to boost continuous training for employees, to ease growing job insecurity in the economic downturn.

"Insecurity has never been higher," he said. "There is a need to develop people's skills, to manage careers long-term, not from day to day."

Mr Sarkozy, speaking in the Ardennes region of eastern France, was presenting a package to protect jobs.

A "strategic investment fund" is part of his plan.

"One cannot allow speculative funds from elsewhere to buy up our enterprises cheaply," he said.

France should use the financial crisis as "an opportunity to become more competitive" he said, noting that the state would inject 175bn euros (£140bn; $219bn) into the economy over three years.

Unemployment in France has risen, becoming the main concern for many French people. It stood at 7.2% in the second quarter, with more than two million people out of work. But there was a sharp increase of 40,000 in August, the biggest surge in 15 years.

In his presidential election campaign last year Mr Sarkozy pledged to cut the jobless rate to 5% by the end of his term in office in 2012.

"There is a need to improve people's employability. What's worse than starting at the bottom of the ladder is knowing you'll stay there," he said on Tuesday.

He pledged an additional 100,000 subsidised work contracts in next year's budget.

Meeting with Brown

He will hold crisis talks with UK Prime Minister Gordon Brown later on Tuesday in Versailles, near Paris.

Only a few months ago unemployment had fallen to a 25-year low in France, the BBC's Alasdair Sandford reports.

But major carmakers have temporarily closed factories and laid off workers due to low demand as the credit crunch hurts the wider economy.

Other sectors, especially the construction industry, are also shedding jobs.

The French government wants to develop retraining programmes and put resources into promising sectors such as IT and green technologies.

Unions and opposition Socialists have accused the French government of underestimating the scale of the financial crisis.

The government admits that the economic outlook remains bad for at least the next year.

National champions

On Thursday Mr Sarkozy announced that a French sovereign wealth fund would be set up, to protect strategic parts of the economy.

German officials have rejected Mr Sarkozy's proposal for Europe to have several such funds, the French news agency AFP reports.

Sovereign wealth funds - nationally-owned investment funds - have boomed in recent years, especially in energy-rich Russia and the Gulf states, but also China - countries which have used their cash pile to invest in major Western firms.

Mr Sarkozy is preparing for a global summit on the bank crisis, set to take place in Washington on 15 November. He wants to overhaul the world financial system that has prevailed since World War II.

He will also steer an EU summit in Brussels on 7 November, as France holds the six-month EU presidency until January.