By Crispian Balmer
PARIS, Feb 11 (Reuters) - President Nicolas Sarkozy said on Wednesday he wanted to preserve French jobs during the economic downturn and denied that a rescue package for France's struggling carmakers broke EU state aid rules.
France was hit by a hail of criticism from EU allies over a 6 billion euro ($7.8 billion) state loan offered to Renault and PSA Peugeot-Citroen earlier this week in return for an unwritten pledge not to close sites in France.
'There is nothing protectionist about this at all,' Sarkozy told reporters on a visit to Kuwait.
'You can't criticise a government team and a president for preferring to use taxpayers' money to make sure that jobs are preserved in the country where the taxes are paid,' he said.
Prime Minister Francois Fillon goes to Brussels on Thursday to defend the car scheme and European Affairs Minister Bruno Le Maire said he would visit several countries to do likewise, including France's most vocal critic, the Czech Republic.
The European Commission has expressed legal concerns over the French plan and said it wanted more details before deciding whether to grant approval.
Some European officials have accused France of undermining the EU's single market to stave off labour instability at home, but European Affairs Minister Bruno Le Maire said such criticisms were 'exaggerated'.
'All European countries faced by this crisis are introducing the same type of measures to prevent the job situation getting dramatic and to make sure their industries do not weaken too badly,' he told France Info radio.
Underscoring the problems facing the car sector, Europe's second-biggest carmaker by volume, Peugeot-Citroen, posted on Wednesday a 343 million euro ($444.5 million) net loss for 2008 and said it expected to remain in the red until 2010.
It also said it expected to cut its global workforce by some 11,000 this year through voluntary departures.
PULLING TOGETHER
Other EU states, such as Italy, have introduced measures to help prop up slumping auto sales, but France has gone further than its partners by looking to linking job protection to aid.
Sarkozy said last week he wanted French carmakers to move production back to France from eastern Europe, and although there is no suggestion either Renault or Peugeot plan such a move, his comments infuriated some allies.
The row has dented EU efforts to define a coordinated response to the economic crisis which is expected to tilt the 27-nation bloc into recession this year.
French ministers sought to ease tensions on Wednesday, saying Paris simply wanted national European industrial champions to survive the harsh downturn.
'If traditional (carmakers) from the major countries don't do well, then things won't go well in the Czech Republic, in Slovenia or in Romania,' Economy Minister Christine Lagarde told Canal Plus television.
France has been less severely hit by the downturn than many of its neighbours, but Sarkozy has come under severe pressure from trade unions to do more to protect jobs and salaries.
More than one million protesters took to the streets in France in January to demand more action and a further strike is scheduled for next month unless he makes concessions.
The government is resisting calls for measures to boost consumer spending and is instead focusing on protecting businesses and jobs, with analysts warning that French unemployment could jump 25 percent this year.
'The priority is to keep industry in France. Have no doubt about that,' Lagarde said.
(Additional reporting by Emmanuel Jarry in Kuwait) Keywords: FRANCE PROTECTIONISM (crispian.balmer@reuters.com; +33 1 49495242; Reuters Messaging: crispian.balmer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
PARIS, Feb 11 (Reuters) - President Nicolas Sarkozy said on Wednesday he wanted to preserve French jobs during the economic downturn and denied that a rescue package for France's struggling carmakers broke EU state aid rules.
France was hit by a hail of criticism from EU allies over a 6 billion euro ($7.8 billion) state loan offered to Renault and PSA Peugeot-Citroen earlier this week in return for an unwritten pledge not to close sites in France.
'There is nothing protectionist about this at all,' Sarkozy told reporters on a visit to Kuwait.
'You can't criticise a government team and a president for preferring to use taxpayers' money to make sure that jobs are preserved in the country where the taxes are paid,' he said.
Prime Minister Francois Fillon goes to Brussels on Thursday to defend the car scheme and European Affairs Minister Bruno Le Maire said he would visit several countries to do likewise, including France's most vocal critic, the Czech Republic.
The European Commission has expressed legal concerns over the French plan and said it wanted more details before deciding whether to grant approval.
Some European officials have accused France of undermining the EU's single market to stave off labour instability at home, but European Affairs Minister Bruno Le Maire said such criticisms were 'exaggerated'.
'All European countries faced by this crisis are introducing the same type of measures to prevent the job situation getting dramatic and to make sure their industries do not weaken too badly,' he told France Info radio.
Underscoring the problems facing the car sector, Europe's second-biggest carmaker by volume, Peugeot-Citroen, posted on Wednesday a 343 million euro ($444.5 million) net loss for 2008 and said it expected to remain in the red until 2010.
It also said it expected to cut its global workforce by some 11,000 this year through voluntary departures.
PULLING TOGETHER
Other EU states, such as Italy, have introduced measures to help prop up slumping auto sales, but France has gone further than its partners by looking to linking job protection to aid.
Sarkozy said last week he wanted French carmakers to move production back to France from eastern Europe, and although there is no suggestion either Renault or Peugeot plan such a move, his comments infuriated some allies.
The row has dented EU efforts to define a coordinated response to the economic crisis which is expected to tilt the 27-nation bloc into recession this year.
French ministers sought to ease tensions on Wednesday, saying Paris simply wanted national European industrial champions to survive the harsh downturn.
'If traditional (carmakers) from the major countries don't do well, then things won't go well in the Czech Republic, in Slovenia or in Romania,' Economy Minister Christine Lagarde told Canal Plus television.
France has been less severely hit by the downturn than many of its neighbours, but Sarkozy has come under severe pressure from trade unions to do more to protect jobs and salaries.
More than one million protesters took to the streets in France in January to demand more action and a further strike is scheduled for next month unless he makes concessions.
The government is resisting calls for measures to boost consumer spending and is instead focusing on protecting businesses and jobs, with analysts warning that French unemployment could jump 25 percent this year.
'The priority is to keep industry in France. Have no doubt about that,' Lagarde said.
(Additional reporting by Emmanuel Jarry in Kuwait) Keywords: FRANCE PROTECTIONISM (crispian.balmer@reuters.com; +33 1 49495242; Reuters Messaging: crispian.balmer.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.