Sarkozy holds crisis meeting as election looms

By Sylvie Corbet

Associated Press

Published: Wednesday, Jan. 18 2012 4:21 a.m. MST

Force Ouvriere FO union secretary general Jean-Claude Mailly arrives at the Elysee Palace Wednesday Jan. 18, 2012, to attend a meeting with French President Nicolas Sarkozy. Representatives of unions and members of the French government are gathered at the Elyysee for a Crisis Summit.

Remy de la Mauviniere, Associated Press

PARIS — President Nicolas Sarkozy hosted labor and business leaders for an urgent meeting on jobs Wednesday, rejecting claims that he was playing politics just three months before France's presidential election.

Critics accuse the unpopular conservative leader of offering last-minute remedies to bring down an unemployment rate that is close to 10 percent. He counters that a broad economic and financial crisis requires changes now.

France, a pillar of the eurozone, has been in the spotlight after Standard & Poor's on Friday downgraded French sovereign debt from its decades-long perch at the top level — triple-A. That raised new doubts about whether the currency union will get its fiscal house in order.

"The current economic situation in France as in Europe is very perilous. It's urgent," Sarkozy said in the opening remarks of the closed-door session, according to a transcript made public by his office.

In a clear nod to his critics, Sarkozy mused: "Do economic life and firings stop because there are elections? Should we stop thinking and acting because there are elections?"

He compared, at times unfavorably, France with "our main competitor ... Germany" — the bellwether of economic success in Europe that retained its triple-A rating from S&P.

Sarkozy said French labor costs have risen 20 percent between 2000 and 2009, compared to 7 percent in Germany. He said the relative cost faced by employers for a worker who earns a gross monthly salary of €2,500 ($3,200) was twice as high in France than in Germany.

He also defended one of his main ideas in recent months: to help businesses by reducing the cost to employers of health or pension benefits — and raising the sales tax to offset the cost of those reductions.

France's hard-charging labor leaders dug in their heels against that because it would shift some of the burden of paying for generous social benefits from businesses to all consumers — including workers.

Labor unions insist workers shouldn't have to pay the cost of the financial crisis at a time when many French companies are still making profits, and accuse Sarkozy of putting together a slap-dash solution ahead of elections.

"You don't address the question of financing the social safety net in two shakes, just like that, in three weeks," Jean-Claude Mailly, head of Workers' Force labor union, told i-Tele TV before attending the meeting.

Sarkozy has been lagging in the polls behind Socialist nominee Francois Hollande ahead of the two-round presidential election in April and May.

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