Sarkozy backs 316 ways to liberate French business

President Nicolas Sarkozy has promised to implement the "bulk" of an independent report which suggested 316 ways to "liberate" financial growth in France.

The report, prepared by a committee of 43 French and foreign experts, mostly calls for the breaking down of privileges, outmoded traditions, restrictive practices and other barriers to competition. It suggests that French GDP could be boosted by 1 per cent and state spending reduced by 1 per cent over the next five years.

Many of its proposals contradict a new "politics of civilisation" outlined by President Sarkozy this month, turning away from the modern obsession with growth and competition.

The commission, chaired by Jacques Attali, a former senior adviser to the late President François Mitter-rand, was largely in favour of the orthodox, free-market approach preached by M. Sarkozy during his election campaign last year.

While welcoming the "bulk" of the proposals yesterday, the president dismissed the report's call to streamline bureaucracy by abolishing the 96 French départements, or counties. He said the départements, created in 1790, had a "historic legitimacy" and answered a demand for more local control in a globalized world. He also rejected a suggestion that France should abolish its constitutional "principle of precaution", which favours safety over innovation.

M. Sarkozy gave a cautious welcome to the idea that professions and trades, such as taxi drivers and chemists, should be more open to competition.

The Attali report also recommended attracting more immigrant skilled labour; raising the retirement age to 65; increasing VAT and lowering income tax; and abolishing price controls and licences for hotels and restaurants.