France`s Sarkozy Seeks To Ease Fears On Crisis

Between 1 and 2.5 million people took part in a nationwide strike last week to protest against Sarkozy`s response to the crisis.

French President Nicolas Sarkozy addresses the nation on Thursday to try to convince a sceptical public that his government is doing what is needed to protect it from the ravages of the global financial crisis.

Between 1 and 2.5 million people took part in a nationwide strike last week to protest against Sarkozy's response to the crisis, which has focused on boosting public investment rather than giving direct help to consumers.

Fearing further social unrest, and with little room for manoeuvre, Sarkozy will seek to persuade voters that his 26 billion euro ($33.9 billion) stimulus package is the right way to tackle the economic downturn.

In a live television appearance at 1915 GMT, Sarkozy is due to be asked questions by four broadcast journalists.

"For the president, this 90-minute explanatory exercise is the most difficult since his election," pro-Sarkozy daily Le Figaro said ahead of the prime-time television appearance.

Sarkozy is not expected to announce new measures, but he is under pressure to perform well since several of the country's trade unions will decide whether to hold another nationwide protest based on what he says during the broadcast.

Sarkozy was elected in 2007 on a platform of sweeping economic reforms aimed at optimising growth, which he pledged to fetch "with my teeth".

But within months his support had slumped to below 50 percent as soaring commodity prices increased many people's cost of living and Sarkozy said there was little he could do to help.

The credit crunch has brought further pain, with unemployment rising steadily, budget deficits set to swell due to stimulus spending, and concerns about the future acute.

FEARS

"Sarkozy must address the country's fears tonight," Le Parisien said in a headline.

The newspaper also published a CSA poll that showed Sarkozy's approval rating had fallen five points in one month to 39 percent. The number of respondents who said they did not trust him rose five points to 55 percent.

But the government has said it will not change its course on how to respond to the crisis, a message repeated by a senior government official on Thursday, who said public sentiment would change when the 26 billion euro package was spent.

"The money hasn't come yet. People will see the impact when it does," he told reporters on condition of anonymity.

The government has also brushed aside calls for a second stimulus package. Two reasons cited by officials are that the crisis could last a long time yet and that announcing a second package would increase France's borrowing costs.

"Our number one priority is to find the money (for the first package) at the cheapest price," the senior official said, adding that investors were buying French bonds at a price close to benchmark German debt, making it easy to raise capital.