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French unions disappointed by Sarkozy's proposals

FRENCH union leaders said today they were disappointed with initiatives presented by President Nicolas Sarkozy to tackle the economic crisis and warned they were ready to launch new protests against his government.

Sarkozy announced yesterday that he would scrap a costly local business tax to encourage companies to keep factories and jobs in France, but refused to bow to union demands to provide direct aid to struggling consumers.

Instead, he proposed talks on February 18 to discuss possible increases to welfare benefits or partial income tax cuts.

"There was no concrete or immediate action. Everything was put off until further discussion," said Jean-Claude Mailly, head of the Force Ouvriere union.

Up to 2.5 million people took part in nationwide rallies on January 29 to protest against Sarkozy's 26 billion euro (US$33.9 billion) stimulus package, which put the emphasis on public investment rather that encouraging high street spending.

Leaders of France's eight union federations are due to meet on Monday to plan the next step in their protest movement.

"What is clear is that we need to carry on with the mobilization. If not, we will remain in this hazy situation," Bernard Thibault, head of the large CGT union, told Europe 1 radio, without giving further details.

Francis Chereque, head of the more moderate CFDT union, said he had expected more from Sarkozy, but ruled out further strikes until labor leaders met the president later this month.

"(Sarkozy) was not very precise. Clearly there is a sense of deception today," he told RMC radio.

Chereque said unions might set aside a date in March for a second nationwide day of action, while the hardline SUD union said such a rendez-vous was vital.

"We obviously need to maintain the pressure and announce on Monday night a new date for a strong protest in the form of a general strike or national rally," Christian Mahieux, a prominent SUD leader told LCI television.

Sarkozy said his main concern was to save jobs, which have been haemorrhaging in recent months, and ruled out any increase in the minimum wage or generalized reduction in sales taxes, as unions and the opposition Socialists have urged.

Instead, he promised to scrap a costly local corporate tax in 2010, to help keep French firms competitive.

The tax is collected by local authorities, most of which are controlled by leftist parties. The Socialists said it brought in some 20 billion euros a year, not 8 billion as Sarkozy had said, and questioned how the regions would function without the money.

Although refusing to budge on consumer incentives, Sarkozy said he was prepared to talk to the unions about a range of issues, including a possible reduction in income tax or increasing unemployment or family welfare benefit.

"I understand that people are worried. I hear them and I understand them," Sarkozy said yesterday.

Socialist leader Martine Aubry said France needed action not compassion.

"France is sinking at the moment ... (and) the president has not stopped the fall. Ok, he put some things on the table. That is just as well, but it is not good enough and it's not what all our neighbors are doing," she told RTL radio.


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