Paris throws weight behind recovery plan

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The Independent Online
PARIS (Reuter) - The Prime Minister, Edouard Balladur, announced a record French bond issue yesterday, beefing up a two-week-old economic recovery plan and throwing more weight into his conservative government's fight against unemployment.

In a surprise move, Mr Balladur also said the state would encourage ailing firms to resist laying off workers by footing part of their pay cheques. The Prime Minister said he was adding the new measures to a recovery programme he announced on 10 May because France's economic condition was 'more difficult than we could have foreseen even a few weeks ago . . . Our country cannot wait'.

Critics accused Mr Balladur of an abrupt shift in economic policy, abandoning the emphasis on cutting budget deficits that the centre-right promised before routing the Socialists in elections in March.

'When someone says the budget deficit has to be cut and then takes out a loan, he is pursuing the policies of a short-sighted idiot,' said Francois Hollande, one of the Socialist Party's young leaders. 'It seems the government has started to panic.'