February 22, 2012 / 9:23 PM / 6 years ago

Sarkozy proposes welfare change for low-paid

PARIS (Reuters) - French President Nicolas Sarkozy proposed tweaks to the welfare system if re-elected that would ease charges on salaried employees at a time when households are feeling the strain of three years of economic gloom.

Seven days into a re-election campaign that aides say will produce an idea a week, Sarkozy told France 2 television that after easing charges on companies in a recently passed “Social VAT” reform, it was time to help low-income households.

He said social charges would be waived for workers on low wages in a way that should raise their salaries by some 1,000 euros a year. The measure would be financed by new restrictions on jobless benefits and a rise in taxes on dividends.

“We must encourage people to work,” said Sarkozy, who is heading into an April 22 first-round vote lagging Socialist challenger Francois Hollande in what has become a clear two-horse race with the odds in Hollande’s favour.

“Work is the answer to the crisis,” he said, adding he was tired of hearing low-paid workers complain that they were on lower incomes than unemployed people on benefits.

Beneficiaries of a 466 euro subsistence wage which costs the state 10 billion euros per year would in future have to follow a professional training course in exchange for the handouts, he said, fleshing out an idea he mooted in a magazine interview days before declaring his re-election bid.

Sarkozy also proposed giving company workers more say in setting the pay of senior executives, either via shareholder meeting votes on pay or by giving workers a board vote. Lavish severance packages for top executives would also be abolished.

Sarkozy has trailed Hollande in opinion polls for months, although he has narrowed the gap since declaring his candidacy a week ago to around 2 points for the first-round vote. He stands 12 points behind Hollande in polls for a May 6 runoff.

The centre-right Sarkozy won power in 2007 on a tide of support for his motto of getting France to “work more to earn more” and his promise to break with the stagnancy of past years and restore the country to full employment.

Global economic crisis, and Europe’s debt turmoil, ruined his plans, however, and at a speech in the city of Marseille on Sunday Sarkozy told a 7,000-strong audience that “working harder” would be the only way to “preserve people’s lifestyles”.

Sarkozy is basing his campaign on a series of reforms to boost France’s flagging industrial competitiveness and restore growth. He is also on a drive to reconnect with a nation where two-thirds of poll respondents give him a negative opinion.

He has pledged to be president of the people and give the public its voice back through regular policy referendums.

Hollande is taking his campaign at a steadier pace since launching an economic program in late January based around increasing taxes on businesses and the rich to fund spending on education, investment and state-aided job creation.

On Thursday, Sarkozy will visit the northern industrial city of Lille and meet vocational apprentices, while Hollande will be on the campaign trail in the countryside of northwestern France.

A daily survey by pollster Ifop using a constant sample of people found Hollande’s first-round lead over Sarkozy narrowed on Monday to 29 percent versus 27 percent and has remained stable since. It has had Hollande steady at 56 percent to Sarkozy’s 44 percent in a runoff ever since February 16.

Separate surveys show Sarkozy’s dismal popularity ratings have firmed since he launched his campaign.

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