- The Washington Times - Saturday, April 29, 2006

PARIS — President Jacques Chirac has announced new funding for six big projects to revive French industry, aimed in part at improving the fortunes of the government after it withdrew an unpopular job law this month.

Mr. Chirac said the Agency for Industrial Innovation, set up last year and charged with supporting the projects, would be given the equivalent of $2.5 billion for the projects.

“These big programs will focus us on technological challenges that are essential for our future,” he said in a speech last week. “These [innovations] will reinforce the excellence of our industry and our services to create new high-tech jobs.”

The projects include the Franco-German Quaero project to create a powerful Internet search engine, and a Siemens project called NeoVal to build ultramodern trains.

Mass protests and strikes forced Prime Minister Dominique de Villepin on April 10 to withdraw a law aimed at reducing youth unemployment, dealing his government a damaging blow. The youth job contract was part of a law aimed at making businesses less reticent to hire new employees because of what they say are inflexible labor rules.

It aimed to cut youth unemployment of about 22 percent. National unemployment stands at 9.6 percent, and voters say lack of jobs is their No. 1 concern.

Mr. de Villepin is a potential presidential candidate in next year’s elections but became unpopular during the protests against the youth job contract — not least among young people who said he rushed the law through parliament without consultation.

Last week he gave a robust defense of his approach and said he is always on the side of reform.

“I intentionally and resolutely situate myself on the side of progress, change and modernization,” he told students at the prestigious Sorbonne university where he opened a national debate on links between universities and business.

Business leaders accuse Mr. Chirac, who has been president since 1995, of failing to reform the labor market to enable France to face global competition. Mr. Chirac said France’s innovation agency is a centerpiece of Europe’s answer to the industrial challenges it faces and called on the European Commission to speed up measures to boost research.

French funds would be given in the form of subsidies and loans for the projects, which would be co-financed by the firms involved, Mr. Chirac said. He has made it a priority to raise the global profile of French industry and said he wants to avoid a future in which France becomes a “museum country.”

The French president noted that China spends five times more on research than does France, adding that only one French firm appears in a recent list of the world’s top 30 companies investing in research.

Other projects to receive funding include one called Homes, proposed by Schneider Electric, which aims to use a new system of heating and lighting to reduce energy consumption within buildings by as much as 20 percent.

Alcatel aims to develop TVMSL, a new European standard for delivering high-quality television to mobile phones. In addition, there are plans for refineries to turn cereals into chemicals and a project called VHD by Peugeot-Citroen to build cars powered by diesel and electricity.

The government is to propose a new law on immigration reform next month, spearheaded by Interior Minister Nicolas Sarkozy, a likely candidate who may face Mr. Villepin and possibly Segolene Royal of France’s Socialist Party.

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