France's conservative government unveiled plans Monday to unshackle the economy, claiming it will add jobs and economic growth while holding prices in check by cutting red tape and boosting retail competition.
Finance Minister Christine Lagarde presented a 300 million (US$467 million) draft law on "modernizing the economy" at a Cabinet meeting. She told reporters it would add 0.3 percentage points to France's economic growth rate and create 50,000 jobs a year starting in 2009.
Plans to boost retail competition by limiting regulation of prices and encouraging the construction of more "hypermarkets" _ giant stores that sell discounted food and household goods _ and deep-discount stores are key amid the 44 points.
The bill also includes measures to encourage small businesses and ease government-imposed limits about when French stores can hold sales each year.
The plan is aimed at answering a growing clamor for government measures to address rising prices that are pinching pocketbooks in France and around Europe.
Big retailers welcome the plan, while small producers fear that it will cut into their profits. The opposition Socialists said the growth of discount stores on the edge of towns will further hurt local businesses in town centers.
The government is planning a parliamentary vote on the bill in early July. The National Assembly, the lower chamber, will debate the bill from May 27, and the Senate from June 15.
President Nicolas Sarkozy has been looking for ways to stimulate the economy, but his ability to do so is limited by sluggish growth that lowers tax receipts and boosts welfare spending.
The government recently dropped its growth target for this year to between 1.7 percent and 2 percent, and estimated that the 2008 deficit will be larger than expected.
The European Commission is gloomier, predicting 1.6 percent growth in France this year and 1.4 percent in 2009. France's budget gap will reach 2.9 percent of gross domestic product this year, the commission forecasts, just below the 3 percent limit set by EU budget rules.
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Associated Press writer Christine Ollivier contributed to this report.
