* ArcelorMittal to invest 17 mln euros in plant
* Sarkozy says furnace to restart in second half of 2012
* ArcelorMittal says restart dependent on health of economy
(Adds Sarkozy quote on protest)
By Vicky Buffery and Daniel Flynn
PARIS, March 1 President Nicolas Sarkozy
claimed a political goal on Thursday after securing investment
to restart an idled steelmill that has become symbolic of
France's industrial decline, but he was later jostled by
left-wing militants while out campaigning.
Sarkozy announced ArcelorMittal's owner Lakshmi
Mittal had promised to invest 17 million euros ($23 mln) in the
Florange plant, near the German border, whose plight has been
politicised by the upcoming April-May presidential election.
Sarkozy and Socialist challenger Francois Hollande, who
leads voter intention polls, are in rival quests to be seen as
the saviour of the plant, which houses the last blast furnace in
France's former steelmaking heartland.
Hollande visited the site last week and said if elected, he
would pass a law forcing companies to sell unused factories to
buyers who would keep them in operation.
Sarkozy sought to trump his adversary, saying the new
investment would restart one of the plant's blast furnaces in
the second half of 2012 -- even though ArcelorMittal said the
steel mill's future would hinge on an economic recovery.
Things turned sour for Sarkozy later in the day when riot
police had to break up a large crowd of left-wing militants and
some Basque separatists, who heckled him, threw scrunched up
political tracts at him and briefly penned him in as he visited
the Basque city of Bayonne. Some threw eggs at the windows of a
bar where he took refuge.
Arriving in Brussels later on for an EU summit, Sarkozy
called the protesters "louts" and said: "I cannot imagine for a
second that Mr. Hollande would not condemn these actions."
"In a democracy, one should be able to campaign without
violence, without having people fight you or throw stones and
eggs at you. These are not democratic actions and Francois
Hollande would look better for condemning them," he said.
Addressing a campaign rally in the city of Lyon on Thursday
evening, Hollande did not allude directly to the incident, but
said there was no excuse for verbal or physical violence.
While short-lived, the protest was the latest in a series of
setbacks for Sarkozy this week, after a blazing campaign launch
two weeks ago helped him trim Hollande's opinion poll lead.
On Wednesday, Sarkozy worsened confusion over the fate of
wounded French journalist Edith Bouvier in an embarrassing
blunder where he said she had been evacuated from the besieged
Syrian city of Homs thanks to tough negotiations, before
backtracking and saying her whereabouts were unclear.
A day earlier, his credibility took another potential blow
when France's Constitutional Court overturned a new law, making
it a crime to deny that the mass killing of Armenians by Ottoman
Turks was genocide. Sarkozy said he would submit a revised
version, a response which risks fanning accusations the law was
aimed at wooing Armenian-descended voters.
The 2012 election is a two-horse race between Sarkozy, on a
platform of structural reform, and Hollande, who wants to hike
taxes on high earners to fund investment in education and jobs.
While Sarkozy had a blazing campaign launch in mid-February,
Hollande has grabbed back the limelight by proposing a largely
symbolic 75 percent tax on annual earnings over 1 million euros.
With the sickly economy and industrial weakness at the heart
of the election, both candidates have seized on Florange, whose
two blast furnaces have stood idle due to a lack of orders since
late 2011, putting the jobs of 500 of its 2,667 workers at risk.
"At the French state's request, ArcelorMittal will
invest 17 million euros in Florange," Sarkozy told France Inter
ArcelorMittal said it would spend 2 million euros ($2.7
million) improving one of the two furnaces, and 15 million euros
on modernising the site and developing new products.
Sarkozy said ArcelorMittal was fully committed to France's
steel industry and to the Florange furnaces. "ArcelorMittal has
set a start-up date for the second half of this year," he said.
ArcelorMittal confirmed the investment, but a spokesman for
the group said there was no guarantee the blast furnace would
resume production unless steel demand recovered sufficiently.
"The restart of Florange will depend on whether there is an
economic upturn this year," the spokesperson said.
Sarkozy, who has accused Hollande of "demagoguery" in
seeking to exploit the plant's plight for electoral ends, also
intervened last week to strike a deal with oil giant Royal Dutch
Shell to keep an insolvent French refinery running.
French industry has bled jobs since the 2008 financial
crisis, helping push the jobless total to a 12-year high.
Data on Thursday showed the jobless rate, including overseas
territories, edged up to 9.8 percent in the last quarter of 2011
from 9.7 percent in the previous three months.
While surveys give Hollande a lead as big as 12 points for a
May 6 runoff over Sarkozy, an IFOP-Fiducial poll on Wednesday
showed Hollande's lead for the April 22 first-round had narrowed
to 1.5 points from 5 points since Sarkozy's campaign launch.
($1 = 0.7501 euros)
(Additional reporting by Matthias Blamont in Paris, Claude
Cannellas in Bayonne and Paul Taylor in Brussels; Editing by
Catherine Bremer and Ben Harding)