Paris - French President Nicolas Sarkozy is drawing up a plan to relaunch the country's economy that will cost about 20 billion euros (25.9 billion dollars), the online edition of the daily Le Monde reported on Wednesday. Finance Minister Christine Lagarde told Europe 1 radio that Sarkozy was thinking of a plan that would require funding worth about 1 per cent of France's GDP.
"That would mean about 19 billion euros," she said. "I know the president has in mind 1 per cent (of GDP), perhaps a little more."
On Tuesday, Sarkozy said he would announce his plan "to deal with the difficulties of the automobile (sector)... especially their subcontractors, to support the construction industry, in less than 10 days."
Lagarde said one idea being considered was lowering the Value Added Tax (VAT) for automobiles, but neither Sarkozy nor Prime Minister Francois Fillon are said to support the idea.
On Monday, Sarkozy and German Chancellor Angela Merkel said that lowering the VAT was not an effective strategy to combat the economic crisis.
Le Monde reported that French automakers had some 1 million unsold cars on stock, "a situation we have almost never seen before," Fillon said.
In addition, French media are reporting that the next unemployment report, for the month of October, will be very bad, with perhaps more than 40,000 new jobless announced.
According to the OECD, French unemployment is expected to jump from the current 7.3 per cent to 8.2 per cent in 2009.
