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Hollande says France needs Charlie-Hebdo spirit to fix economy

Monday, January 19, 2015 - 21:59
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President Francois Hollande said the spirit of national unity shown in France after this month's terrorist attacks needs to be used to revive the economy.

[PARIS] President Francois Hollande said the spirit of national unity shown in France after this month's terrorist attacks needs to be used to revive the economy.

After terrorists claimed the lives of 17 people in and around Paris between Jan 7 and 9, Mr Hollande led a march that included 3.7 million people across the country signaling the nation's defiance. Lawmakers across the political spectrum gave Prime Minister Manuel Valls a standing ovation for a speech in the National Assembly chastising the terrorists and calling for unity.

"A nation is a people and the French people knew how to respond," Mr Hollande told executives, union leaders and managers of small companies today in Paris. "After that trial, this same nation now needs to find a way to give our country economic strength."

The French economy has barely grown since Mr Hollande took office in May 2012 and jobless claims have risen almost without interruption to a record 3.5 million. On Monday, the Socialist president emphasized the dangers posed by the economic malaise.

"Unemployment is a threat to the cohesion of our nation," he said. "Everyone has a role to play."

Mr Hollande himself has benefited in the eyes of voters for his handling of the terrorist threat.

The Socialist president's approval rating jumped 21 points to 40 per cent, the highest in almost two years, according to an Ifop poll for Paris Match magazine. Ifop interviewed 1,003 voters Jan 16 and 17. No margin of error was given.

That contrasts with last year, when multiple polls showed that Hollande had become less popular than any French president in half a century, with his approval rating dipping as low as 13 per cent according to some surveys.

Now Mr Hollande is also looking to lower oil prices and a weaker euro to give households and companies a boost, helping the government to secure its forecast for gross domestic product to expand at least one per cent this year.

The price of Brent crude oil, Europe's benchmark, has tumbled to less than US$50 a barrel from US$108 in late July. Meanwhile the euro has declined to about US$1.16 from as high as US$1.39 last March.

"This is a counter-shock for oil," Mr Hollande said. "There is uncertainty about the sustainability of this price level. What we can say is that these prices are linked to imbalances between supply and demand that won't disappear immediately."

The weaker euro will offer as much help to French companies as does the government's "responsibility pact," which cuts social charges by about 40 billion euros, he said.

"This has an impact on competitiveness and it also has consequences for our trade balance," Mr Hollande said.

Mr Hollande also said that the European Central Bank will probably announce massive purchases of sovereign debt this week for the first time, further spurring the euro area economy. ECB President Mario Draghi holds a press conference in Frankfurt Jan 22 after the bank's Governing Council considers such a program.

"This will provide significant liquidity to the economy," Mr Hollande said.

BLOOMBERG

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