December 21, 2008 / 11:24 AM / 10 years ago

France's Chatel says cannot rule out more aid

PARIS, Dec 21 (Reuters) - The French government cannot rule out extra measures to boost the country’s ailing economy on top of a 26 billion euro ($36.3 billion) stimulus package unveiled this month, spokesman Luc Chatel told Europe 1 radio on Sunday.

The French cabinet signed off on the aid on Friday as fresh statistics showed France was heading for deep recession in the coming months. [ID:nLJ94264]

“We believe in this stimulus plan because it has scale,” Chatel told Europe 1. “The goal is to have an impact on the economy as fast as possible.

“There is an immediate impact from this stimulus plan. That’s what is essential. Then, we are not ruling out anything afterwards. One must not rule anything out later.”

Chatel told Europe 1 a plan designed to support the struggling auto industry whereby customers received 1,000 euros for trading in their old cars for new, less polluting models was already helping to tempt buyers back into showrooms.

In neighbourhing Germany, Chancellor Angela Merkel on Saturday said the German government would take a further step in January to boost the economy after passing a stimulus package two weeks ago that was widely criticised as insufficient.

French Economy Minister Christine Lagarde said last week the 26 billion euro stimulus package announced on Dec. 4, which aims to support investment and help certain industries such as carmakers and builders, would add an extra 1 percent to gross domestic product.

In a quarterly report on the economy, INSEE said France appeared set to contract by 0.8 percent in the final three months of this year and to continue shrinking in the first two quarters of 2009. ($1=.7164 Euro) (Reporting by James Regan; editing by Simon Jessop)

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