Sarkozy lashes out at city traders and bank bonuses

President Nicolas Sarkozy launched a stinging attack on City traders and ruled out bonuses for managers of French banks bailed out by state funds as he sought to reassure the nation reeling from nationwide strikes sparked by the global economic crisis.

Mr Sarkozy proposed a panoply of investment measures, tax cuts, profit sharing and an increase in short-term unemployment benefits during a 90-minute live session with journalists on national television last night.

Dressed in a sober dark blue suit, the French leader was both comforting and scolding as he outlined proposals that his government would discuss in detail later this month with unions and other social groups to fight growing unemployment and shrinking spending power.

“I must ensure that France enters the crisis as late as possible and gets out of it as early as possible,” Mr Sarkozy said.

He called on a joint European response to the crisis, which he said he had discussed in a recent telephone conversation with US president Barack Obama.

“I told him that I feel an ally of the US, but one country cannot lead the world,” he said.

Polls released yesterday indicated that confidence in the energetic Mr Sarkozy was falling amid frustration over job cuts and taxpayer concern that money used to bail out the financial sector was lining executive pockets.

Mr Sarkozy sternly announced that there would be no bonuses in 2009 at banks that had received state aid. He also said he would consider an Obama-style cap on salaries for top managers of companies that received public funds but was sceptical about making it a hard-fast rule.

But the president’s harshest words were reserved for traders whom he accused of fuelling speculation.

Mr Sarkozy said he was “more shocked by the system of pay” for traders than he was for bankers. “That’s what you have to forbid,” he said.

He also said France would review its relations with neighbouring financial havens such as Luxembourg, Andorra and Monaco.

Nationwide strikes and protests last week focused on fears over rising unemployment and the government is worried that the one-day action could turn into a broader and protracted walkout.

Riot police fired tear gas yesterday at a handful of student protesters trying to force their way into the University of Strasbourg in eastern France. Protesters lobbed eggs and shoes at the facade of the new university complex.

Student protests over job losses and reforms in higher education disrupted several French universities yesterday, though most were peaceful.

Mr Sarkozy, however, said despite the protests in recent weeks that he would press ahead with his reforms.

“Naturally, I will continue to reform the country. This is the mandate I received, it is my duty,” he said. “It is the only way for France to emerge from the crisis stronger than going into it.”