Hollande promises to tax the rich...

...to pay off French deficit

Leftwing frontrunner in presidential race launches manifesto on how Socialist party would deal with financial crisis

Angelique Chrisafis in Paris guardian.co.uk,

The Socialist rural MP, who recently declared "my real adversary in this campaign is the world of finance", launched his manifesto on Thursday, a road map of how the left would deal with the financial crisis. Hollande said he would raise taxes for banks and big companies as well as France's richest people, and use the money to help wipe out the nation's crippling public deficit.

By scrapping some €29bn (£24bn) worth of tax breaks for wealthier people introduced under Nicolas Sarkozy, he said he could find €20bn to deal with the corrosion of French society: record unemployment, soaring youth jobless figures and an education system that has been shamed as one of the most unequal in Europe, where one in six children leave with no qualifications.

Hollande increased his lead in the polls after his first big rally on Sunday used Barack Obama-inspired slogans of "hope and "change". But he was under pressure to counter the charges by Sarkozy that the French left is high-spending, with its head in the clouds of idealism and little credibility on managing the world's financial crisis.

For the first time since the second world war, the election campaign is dominated by an unpredictable economic crisis. Unemployment is at a 12-year high with 2.8m jobless, and youth unemployment is over 20%. Last year, the new unemployed were equal to the entire population of the city of Grenoble (about 157,000).

With France losing its AAA credit rating, and a gaping hole in state welfare coffers, the French left cannot make its traditional high-spending promises on public services, and has little room for manouevre.

If Hollande's Sunday rally was aimed at injecting some dazzle into what critics have called an unexciting campaign, the manifesto launch marked Hollande's return to the careful, number-crunching technocrat who ran the Socialist party for 11 years. The Nouvel Observateur likened him to an anaesthetist sitting in a white coat by the bed reassuring France about its major surgery. Le Monde called it a "Churchillian" manifesto; France isn't at war, but "things are bad", the paper said.

If there is to be blood, sweat and tears in France, Hollande suggested they would come from the richest 5%: "If there are sacrifices to be made, and there will be, then it will be for the wealthiest to make them".

The plank of his manifesto was making the tax system fairer — raising the tax bracket for the highest earners favoured under Sarkozy. He focused on education and youth, promising 60,000 new jobs in schools and 150,000 state-aided jobs for youth, as well as help for small start-up companies. The banking industry will be forced to draw a line between its speculative financial market operations and the more traditional role of using savers' deposits to finance industry and the economy — a policy also being considered in Britain. Hollande said he could bring France's bloated deficit back on target by 2017.

The electoral battleground will now be fought over France's middle class, such as teachers, nurses and social workers, who have low salaries but earn too much for French social benefits and too little for tax breaks. They are disillusioned and angry that France's social mobility has ground to a halt.

Sarkozy's rightwing UMP party said Hollande's manifesto would lead to a "middle class tax bloodbath". The party leader, Jean-Francois Copé, likened Hollande to Venezeula's Hugo Chávez.

Sarkozy is to announce a last-ditch reform package this weekend, including a likely rise on sales tax to help meet social welfare costs. The Socialists claim this will hit the middle class the hardest.

Meanwhile, Hollande, who aims to be the first leftwing president since François Mitterrand, sparked amusement in London when it emerged that a Shakespeare quote he used in his Sunday rally — "They failed because they did not start with a dream" – actually came not from the playwright William but from the novelist and Daily Telegraph book reviewer Nicholas.

French Socialist presidential candidate outlines how he intends to increase taxes for the rich, cut tax on profit for small businesses, and cancel billions of euros of tax breaks

Taxing the rich will not work monsieur, it never has. When you punish the successful you decrease the desire to succeed.

Brantigny