The French Government says it is ready to consider cutting income tax and will scrap local business tax in 2010 in a bid to lessen the impact of the economic crisis. In a face-the-nation style interview carried by France’s three main television channels, President Sarkozy tried to defuse public anger over the slowdown.

He said he would meet union leaders later this month to discuss a range of measures to help households, including increasing welfare handouts. He said: “Are these the reforms that France must implement to have full employment when the crisis has past? Yes, absolutely.” The French President went on to say: “If you have to stop reform every time there is a demonstration then it is not worth making reform.” Dialogue, he said, was absolutely essential, but he told viewers he had a mandate to make the country more competitive in order to obtain full employment. This mandate, he said, he would implement. Between one and 2.5 million people took part in rallies in France last week to protest against Sarkozy`s response to the crisis. Unions are threatening further strikes unless the French government gives into their demands for measures to boost consumer confidence.More about: Nicolas Sarkozy

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