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HomeInformationFrance outlines €12bn investment plan to help modernise economy
The bulk of the €12bn will go to research and universities

France outlines €12bn investment plan to help modernise economy

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The French government, anxious to match its rhetoric on promoting growth over budget austerity, has unveiled a €12bn plan to boost investment over the next decade, partly funded by the sale of some of the state’s big corporate shareholdings.

French Prime Minister Jean-Marc Ayrault said revenue from the sale of state stakes in private companies will help finance the program, so that it would have a minimum impact on public finances. The plan fits with the strategy of Socialist President Francois Hollande, who is trying to control spending but is pushing for growth measures instead of austerity. The government predicts growth of just 0.1 percent this year.

Mr. Ayrault said it would be partly financed by selling off some state shareholdings – it owns shares worth €60bn in some of France’s biggest quoted companies including Renault the carmaker, EDF the power group, and Orange, formerly France Telecom.

But the relatively modest programme will not kick in until 2016 to ensure it does not derail the Socialist government’s commitment to reduce the budget deficit to 3 per cent of output in 2015 – an EU-designated target already set back two years by Brussels as the economy has stumbled.

The investment programme is intended to help modernise the economy and improve France’s flagging competitiveness. The bulk of the €12bn will go to research and universities, funding the shift to more efficient and renewable forms of energy, and to the aerospace, digital and health industries.

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