* First appearance after allegations of affair with actress
* Hollande pledges lower payroll charges for employers
* Vows 50 billion euros public spending cuts in 2015-17
* Says will clarify status of partner Trierweiler soon
By Mark John
PARIS, Jan 14 President Francois Hollande
brushed away questions about an alleged affair with an actress
on Tuesday and unveiled moves to ease company taxes, cut labour
charges and trim France's high public spending to revive a
He called for France and Germany to harmonise corporate
taxation and create a joint venture to manage the transition to
renewable energy, modelled on European plane giant Airbus.
With over 500 journalists packed into the Elysee Palace
ballroom for a New Year news conference, the Socialist leader,
deeply unpopular with voters, made no mention of controversy
about his private life in a 30-minute introductory speech and
defiantly stonewalled on the subject for the next two hours.
His official partner, Valerie Trierweiler, is in hospital
recovering from shock after a celebrity magazine published
pictures of what it said was Hollande wearing a motorcycle
helmet visiting actress Julie Gayet for nocturnal trysts.
"Everyone in their personal life can face trials. That is
our case," Hollande said when a French reporter ventured a coy
first question about Trierweiler's future as first lady.
"These are painful moments ... This is neither the place nor
the time to (discuss) that," Hollande said, adding that he would
clarify the issue before a visit to the United States on Feb. 9,
on which Trierweiler had been due to accompany him.
The president said he had chosen not to sue the magazine
Closer for invading his privacy because as head of state he was
immune from being sued himself and did not want to create a
double standard. He did not deny the reported affair.
The French are traditionally indulgent of their leaders'
sexual indiscretions, and an opinion poll on Sunday showed an
overwhelming majority said it did not change their view of
Hollande, who was entitled to privacy in his personal life.
DITHERER NO MORE?
Before the embarrassing publication, he had become the least
popular French president in modern times, largely due to tax
increases, recession and high unemployment, compounded by a
reputation for dithering.
Hollande sought to erase that image and adopt the clothes of
a social democratic reformer as he set out a "responsibility
pact" to cut the tax and regulatory burden on companies in
return for commitments to create jobs and boost training. As
part of that drive, employers will no longer fund family
allowances via payroll taxes from 2017.
He promised a further 50 billion euros ($68 billion) in
spending cuts in 2015-17 on top of a planned 14 billion this
year, saying they could be achieved by making national and local
government more efficient while preserving France's generous
"This is the biggest (initiative) proposed in our country
for decades," Hollande said, teasing conservative predecessor
Nicolas Sarkozy for promising reforms but not delivering.
In first reactions, market economists welcomed the change in
tone but were more measured on the content, noting the new moves
represented a slight deepening of already planned cuts and that
some funding details remained unclear.
Ion-Marc Valahu, fund manager at Geneva-based Clairinvest,
said: "At least he's acknowledged that there are issues that
need to be solved for the economy to recover, but they need to
do a lot more to slow down the pace of job destruction. He can
say what he wants, but 2017 is a long way to go."
"More and more, the future French economic policy will look
like that of the previous conservative majority," said Dominique
Barbet, market economist at BNP Paribas.
France's hard left accused him of a sell-out. "This is a
real social irresponsibility pact," said the Communist party's
National Secretary Pierre Laurent, complaining of an attack on
the French social model.
DEFENCE OF EUROPE
Hollande, who defied street protests to legalise gay
marriage last year, signalled he was ready for a new controversy
by announcing plans for a law allowing terminally ill patients
to end their lives under strict controls.
Hollande defended the European Union ahead of European
Parliament elections in May and said he would not let
Eurosceptics who want to pull France out of the euro prevail.
A recent poll suggested the anti-EU far-right National Front
could come first in the European election in France, often used
to register a protest vote, ahead of both the mainstream
conservative opposition and the Socialists.
His proposal for a Franco-German joint energy company caused
some surprise in Berlin, but officials said the two countries'
environment ministers had been working on a detailed joint
energy transition plan last year, until the French minister was
sacked for criticising budget cuts.
Previous French announcements of joint industrial projects
with Germany have often come to nothing or little, partly
because private German industrialists are reluctant to work with
state-influenced French companies.
Half a dozen journalists tried during the event to follow up
with questions on Hollande's personal life, but to no avail.
A similar event staged by predecessor Nicolas Sarkozy after
his 2007 divorce was dominated by curiosity over his romance
with singer Carla Bruni, whom he subsequently wed. When Sarkozy
played up the relationship, opinion polls suggested voters
disapproved of the flaunting of his personal life.
Conservative former premier Alain Juppe jokingly entered the
debate over whether Trierweiler remained France's unofficial
"In France we have a status for everything - perhaps now
we'll also have one for the Second Lady."