France unveils stimulus package aimed at investment

President Nicolas Sarkozy unveiled a 26 billion euro ($32.9 billion) stimulus plan for the faltering French economy on Thursday, targeting investment projects rather than directly aiding consumers.

France is the latest European Union country to open state coffers to try to temper the sharp economic downturn and presidential officials said the measures would cost the equivalent of 1.3 percent of gross domestic product (GDP).

The plan earmarks 10.5 billion euros for infrastructure, research and support for local authorities, according to background documents handed out by Sarkozy's office.

It also included moves to help the ailing auto industry, which Sarkozy said employed 10 percent of the workforce directly or indirectly, encouraging people to scrap older vehicles and buy new, more environmentally-friendly models.

The package is expected to boost French growth by around 0.6 percent next year, but will also push the deficit to 3.9 percent of GDP against a previous target of 3.1 percent and add 20 billion euros to the public debt mountain.