Sarkozy wants to create industry's bank, raise VAT to boost competitiveness

"We must create activity in France and be more competitive in order to bolster growth," Sarkozy said.

According to Xinhua, with the aim, the French president stressed the need to "create a bank of the industry" in February.

"The bank will be for the small and medium firms as business leaders tell me every day that the banks are not lending enough and when they do, they lend too much, " Sarkozy added.

During a TV interview on France's four main TV channels, Sarkozy announced also the increase by 1.6 percent in VAT rate to stand at 21.2 percent in order to "finance social welfare."

Labeled the "social VAT", the new measure, to come into effect on Oct. 1,aimed at lowering payroll taxes and increasing VAT on added value.

Trade unions and opposition parties denounced "anti-social" measure expected to weaken further the less fortunate citizens and fuel prices.

However, Sarkozy ruled out a negative impact of VAT rise on the consumers' purchasing power as "competitiveness will maintain prices (at their level)."

Furthermore, the French president said to impose 0.1 percent tax on financial transitions for listed companies in France to "finance deficits."

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