FRANCE: France's new Prime Minister, Mr Jean-Pierre Raffarin, prepared the country for a swerve to the right yesterday, announcing plans to allow partial privatisations of state firms, prime the economy with tax cuts and launch a crackdown on crime.
In a speech to parliament after centre-right allies of re-elected President Jacques Chirac swept the left from power last month, Mr Raffarin acknowledged that reforms such as loosening labour laws and reforming state pensions could spark resistance.
"The road is to the right, but we face a steep climb," Mr Raffarin, a provincial politician chosen by Mr Chirac for his down-to-earth manner, told the National Assembly. "We want to govern for everyone," he said, pledging to consult trade unions whose strikes in 1995 against efforts by Mr Chirac to implement right-wing reforms ultimately brought down his first government.
In a move many in France will see as controversial, given the current turbulence of financial markets, Mr Raffarin said it was time to allow French energy giant EDF and its gas-providing counterpart GDF freedom to sell stakes in themselves.
"To enable them to strike alliances and develop their strategy in Europe and beyond - while respecting the need to offer a public service - their legal status will be changed to allow a progressive opening of their capital."
Mr Raffarin, who repeatedly interrupted his speech to chide hecklers from the opposition benches, promised legislation this summer to provide a quick 5 per cent tax cut.
"This cut is a step towards the target of reducing income tax by a third," he said, referring to one of Mr Chirac's core election pledges. "Cutting taxes stimulates activity and initiative." He added that efforts to cut corporate taxes and other charges on labour would be undertaken with the aim of creating one million new French companies over five years. - (Reuters)