With French Elections Pending, Nicolas Sarkozy Tries Easing Joblessness PARIS - With the French jobless rate at a 12-year high and elections approaching, President Nicolas Sarkozy brought union and business leaders together on Wednesday for a "social summit" meeting to discuss legal changes to promote greater economic flexibility. "The gravity of the crisis obliges us to make decisions," Mr. Sarkozy said according to a text issued by his office as unemployment neared 10 percent. "Regardless of the political calendar," he said, the economic crisis and unemployment "don't give any of us the right to stay immobilized." He announced a modest 430 million euro ($554 million) plan to increase aid to those unable to find full-time work, expand training for those unemployed for at least two years and create more tax incentives for small businesses to hire those under 26. A large part of the money is to come from rechanneling existing funds. He discussed measures to make the labor market more flexible, including temporary layoffs. He also proposed cutting payroll taxes by raising the consumption tariff, the value-added tax - a measure that has been criticized by legislators in his own party as politically damaging and is opposed by the Socialists. The issue, Mr. Sarkozy said, is competitiveness. In France, companies pay a large share of the costs of social benefits. For a worker earning 30,000 euros ($38,500) a year before taxes, the cost to an employer is twice as high in France as in Germany, Mr. Sarkozy said. French labor costs, he said, have risen 20 percent from 2000 to 2009, compared with 7 percent in Germany. France also has a considerably higher annual budget deficit than Germany - 5.4 percent of gross domestic product last year compared with 1.3 percent, and a considerably larger state bureaucracy per capita. Those are among the reasons that Germany kept its AAA credit rating last week while France was dropped a notch by Standard & Poor's. More joblessness means more state spending and less tax revenue, which is compounded by the economic slowdown in Europe. In France, growth is nearly flat. Businesses blame the high cost of labor and taxes for declining exports, especially in industrial goods, while imports are rising. Mr. Sarkozy's rivals criticized the meeting as political grandstanding, but his main challengers, the Socialist nominee, François Hollande, and the far-right National Front candidate, Marine Le Pen, have both spent time campaigning among the jobless. On Tuesday, Mr. Hollande visited a shuttered steel mill, ArcelorMittal, in Gandrange, in northeastern France, that Mr. Sarkozy had promised to save in 2008. Ms. Le Pen has found increased support among the jobless who blame their plight on globalization, immigration and the euro. Mr. Sarkozy's Wednesday meeting, which included crucial cabinet ministers and the leaders of the five main unions and three employers" groups, was closed to the public. Bernard Thibault, who leads the largest union, C.G.T., said later that Mr. Sarkozy's measures would "have no real impact on employment," and several thousand demonstrators organized by the unions denounced the gathering as an "antisocial summit" meeting convened for political purposes. The unions have opposed any increase in the value-added tax as well as any extension of the work week, urging instead more temporary layoffs of workers. Philippe Louis, head of the C.F.T.C. union, said, "We refuse to see household budgets diminished." Jean-Marc Ayrault, a special adviser to Mr. Hollande, criticized the president, saying that "at the end of his five-year term, Nicolas Sarkozy seems to have discovered the seriousness of the situation." Mr. Sarkozy has not formally announced his candidacy for re-election. The first round of voting is April 22.