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Yahoo! My Yahoo! Mail Yahoo! Search Search: Sign InNew User? Sign Up News Home - Help Navigation Primary Navigation Home Singapore Asia Pacific World Business Entertainment Sports Technology Top Stories Most Popular Secondary Navigation Search Search: Sarkozy outlines French exit strategy from crisis AFP - Tuesday, June 23 VERSAILLES, France (AFP) - - President Nicolas Sarkozy Monday announced plans for a national loan to bankroll strategic investments as France emerges from recession, in a "state of the union" address to lawmakers. ADVERTISEMENT In a wide-ranging policy speech ahead of a government reshuffle Wednesday, the right-wing leader said France's protective social system had helped the country cushion the blow from the worst recession in 60 years. "The crisis has put the French model back in fashion," Sarkozy told lawmakers gathered in a wing of the Chateau de Versailles near Paris, the first time in 150 years a French head of state has addressed parliament in person. One-time critics of the state-centred French system had been proven wrong, he said, arguing that France was "better armed than many others to succeed" as the world emerges from the downturn. Sarkozy acknowledged the need to tackle France's public deficit, set to exceed seven percent of gross domestic product in 2009 as the crisis sends social spending soaring and slashes tax revenues. But he firmly ruled out any increase to taxes or "austerity measures" to balance public spending, arguing tax hikes would slow France's recovery. "Yes we have a problem with our public finances. Yes we have a problem with our deficits. But that is not the way to tackle the problem," Sarkozy said. The president, who came to power in 2007 vowing to overhaul French society, also said he refused to "sacrifice" "investment in the future." He said the first task of Prime Minister Francois Fillon's new government will be to set "national priorities", to be funded via a loan either "from the financial markets or the public" via an exceptional debt issue. Lawmakers, labour and business leaders will be asked to help set those priorities, he said, citing "green" investment, research and education, infrastructure and industry as possibilities. Sarkozy also vowed to track down wasteful expenditure -- what he called "bad deficit" -- through "courageous reforms" in the public sector, including controversial plans to streamline regional government. And he reaffirmed his determination to press ahead with unpopular reforms, promising to make headway on the issue of pensions -- possibly pushing back the retirement age -- by mid-2010. Sarkozy's address set the scene for a minor cabinet reshuffle, to be announced Wednesday, which is likely to pursue his strategy of recruiting left-wingers and ethnic minority figures. He also touched on the hot-button issue of religious freedoms, following calls by some lawmakers for an inquiry into the wearing of the burka by members of France's five million strong Muslim community. The French leader said the burka was not welcome in secular France, saying it "is not a sign of religion, it is a sign of subservience." Sarkozy seized on a surprise boost in the opinion polls following his party's strong showing in European elections to rally voters and his political camp in the address in Versailles, billed as a "state of the union" speech. Since 1875 French presidents were banned from entering parliament to ensure the legislature's independence from the executive, a ban overturned in a constitutional reform last year. The last time a head of state appeared in parliament was in 1848. In a minutely-orchestrated ceremony, Sarkozy and first lady Carla Bruni were given a red-carpet welcome by the French republican guard, and were led through the ornate galleries of the palace to the chamber. Opposition parties attacked the address as a "monarchical" exercise in self-aggrandisement by the hyper-active president. Green and Communist lawmakers boycotted the speech while the mainstream Socialists agreed to attend but refused to join in a debate after the president left. Email Story IM Story Printable View Blog This Sign in to recommend this article » 0 users recommend Enlarge Photo France's president Nicolas Sarkozy delivers a speech in a wing of the Chateau de Versailles outside Paris. Sarkozy Monday announced plans for a national loan to bankroll strategic investments as France emerges from recession, in a "state of the union" address to lawmakers. Most Popular – Top Stories Viewed Schwarzenegger in mid-air jet drama Boeing readies Dreamliner for first flight Chubby people live longest: Japan study Botox helps Australian stroke victim to walk again F1 governing body 'not surprised' at sport's split View Complete List » Search: Home Singapore Asia Pacific World Business Entertainment Sports Technology Top Stories Most Popular Copyright © 2009 Yahoo! Southeast Asia Pte Ltd. (Co. Reg. No. 199700735D). All Rights Reserved. Privacy Policy - Terms of Service - Community - Intellectual Property Rights Policy - Help

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