Old cars to create new jobs in France

EDOUARD BALLADUR has announced new measures to combat unemployment, including incentives to trade in old cars for new.

The Gaullist Prime Minister offered a bonus of FFr5,000 (pounds 575) for car-owners who send a vehicle made at least 10 years ago to the breaker's yard and exchange it for a brand new model.

The measure, designed to bolster France's motor industry, prompted a Toulouse association of the unemployed to say it was sending Mr Balladur a cheque for 5,000 francs 'to exchange his old ideas for new ones'. His package was attacked by the left and by trade unions as being window-dressing.

On the far right, Jean-Marie Le Pen, the leader of the National Front, said this use of taxpayers' money amounted to 'dressing Peter by undressing Paul' and would benefit foreign as well as French companies. The government was 'firing its last cartridges'.

Other measures included unblocking profit-sharing money in employees' accounts, usually held for five years, to buy new cars or undertake important building work on homes. Until now, early reimbursement of such funds has been allowed only for house purchase or marriage.

Mr Balladur said the rise in unemployment had slowed dramatically - the increase in jobless was 4,300 in December compared with 30,000 10 months ago when he took office. Unemployment is a record 12 per cent in France.

Mr Balladur announced the new measures as the first rounds in three parliamentary by-elections showed Socialist gains. The polls were held in constituencies where last March's results were annulled because of campaign irregularities. Because of a low turnout, no meaningful conclusion could be drawn, however. A second, decisive round follows on Sunday.

Mr Balladur, who is tipped to succeed Francois Mitterrand as president next year, did not convince everyone. The daily Liberation spoke of a 'wagon of measurettes' and Jean Glavany, the Socialist Party spokesman, said the Prime Minister had offered 'a few drops which will solve nothing'. But Louis Schweitzer, the chairman of Renault, welcomed the package.