Page last updated at 08:00 GMT, Thursday, 4 December 2008

France plans 20bn euro stimulus

By Emma Jane Kirby
BBC News, Paris

French President Nicolas Sarkozy
President Sarkozy has announced a number of rescue packages

French President Nicolas Sarkozy is due to unveil a massive stimulus plan to help France fend off financial crisis.

The 20bn euro (£17bn; $23bn) package will mainly target the car industry, housing and household spending.

Although France is not technically in recession yet, the economic forecast for the country is extremely bleak.

French unemployment, already among Europe's highest, is rising sharply and experts say it is predicted to hit more than 8% in 2009.

The French car industry has been badly affected by the financial crisis. A sharp drop in sales has forced Renault and Peugeot to announce thousands of job cuts.

President Sarkozy will unveil the support package in the northern town of Douai, home to a major Renault plant.

'A lot of fear'

Roger Marie, an far left-wing councillor from the region, says workers are desperate.

"The future of car plants is like the future of all industries in France, because if the people don't have money to buy, we will have a lot of millions and millions of people on the dole."

"So there is a lot of fear among the workers about their future and people are very scared about what could happen," he said.

Other measures to help the auto industry will include offering a 1,000-euro bonus to car owners who scrap their old vehicle to buy a new, smaller, less-polluting model.

Manufacturers are also expected to get grants to help them develop electric and other environmentally-friendly cars.

In the last two months, Mr Sarkozy has announced a series of different rescue plans including a 22bn-euro package for small and medium-sized businesses.

These latest measures are also expected to include help for low income households to try to boost flagging consumer spending.

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