/europe
PARIS (CNN) -- French President Nicolas Sarkozy says he will commit €26 billion -- $33 billion -- to relaunch the French economy, as the cost of doing nothing would be far worse.
French President Nicolas Sarkozy wants his country to spend its way out of the recession.
"Our response to the crisis, it is investment," said Sarkozy Thursday.
Sarkozy said his stimulus plan was meant to put the economy back on track, but also to allow France to catch up on 30 years of reduced competitiveness and neglected infrastructure improvements.
The most direct and immediate impact of his far-reaching plan will be felt in the car and construction industries which account for 10 per cent of the French work force.
One part of the plan, which was announced next door to an ailing Renault car factory in northern France, would give car buyers who trade in 10-year-old vehicles for new ones a €1,000 ($1,275) bonus. That, it is hoped, will help revive the automobile sector which is facing a 25 per cent cut in production.
To stimulate construction, Sarkozy announced plans to create 100,000 public housing units in the next two years, and a two-fold increase in the number of zero interest loans available to new home buyers.
He also plans to accelerate the expansion of the high-speed rail network, and new investments in the state run electricity system.
Sarkozy also outlined plans for "much-needed" hospital, prison, school and university building renovations.
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