Sarkozy: 'The United Kingdom has no industry any more'

A sneering Nicolas Sarkozy has attacked Britain for being a country with 'no industry'.

The embattled French President, who is hoping to be re-elected this spring, made the extraordinary outburst as he defended a VAT rise during a prime time national TV broadcast.

He had just announced a 1.6 per cent hike in VAT in a move designed to boost France’s failing economy.

But when a journalist pointed out that Britain had experienced a rise in prices after increasing its VAT contributions, Mr Sarkozy - who in 2009 claimed the UK rise had ‘absolutely failed’ to stimulate the economy - spat out the words: 'The United Kingdom has no industry any more.'

He said he was borrowing the measure from Germany, arguing that it had 'helped to boost German competitiveness' and had not led to a rise in prices.

The 11th-hour measures are a risky political gamble as the hugely unpopular Mr Sarkozy lags behind Socialist rival Francois Hollande in the polls.

Opinion polls also suggest the majority of the population is against an increase in sales tax, which will eat into their spending power.

It is not the first time Mr Sarkozy, who will come face-to-face with Prime Minister David Cameron at an EU debt summit today, has expressed his dislike of his cross-Channel neighbours.

In October at an EU-27 summit, after criticism from UK ministers over the euro, Mr Sarkozy bluntly told Mr Cameron: 'You have lost a good opportunity to shut up.'

He added: 'We are sick of you criticising us and telling us what to do. You say you hate the euro and now you want to interfere in our meetings.'

A month later, in response to a question at a press conference about whether France and Germany were trying to change the governments of Greece and Italy, Mr Sarkozy hit out, saying: 'Perhaps the fact that you come from an island, you can't understand the subtleties of the European construction.'

And today's meeting - where EU leaders will sign off on a permanent rescue fund for the eurozone - could potentially herald a repeat of 'Le Snub', when the French leader refused to shake Mr Cameron's hand after the Prime Minister vetoed proposed changes to the EU treaty in December.

Mr Sarkozy was not questioned on the latest comments by any of the carefully selected journalists assisting with the broadcast from the Elysee Palace.

It was perhaps a wise move; figures from the OECD show that in 2009, Industry accounted for 19 per cent of French Gross Value Added - a measure of the value of goods and services linked to GDP.

In 2010, in the UK the figure was 21.8 per cent.
In manufacturing alone, the UK figure stood at 11.5 per cent compared with 10.7 per cent in France.

Despite Mr Sarkozy's previous view on such measures in the UK last night he saw the VAT rise as an essential measure to reverse his country’s fortunes, as he praised Angela Merkel for applying it.

It came as the German Chancellor offered ‘active support’ at campaign rallies for Mr Sarkozy, who is widely expected to fail in his re-election bid.

A ‘Robin Hood’ tax on financial transactions was also imposed by Mr Sarkozy last night – despite fierce opposition from EU leaders including Prime Minister David Cameron who described it as ‘utter madness’.

The 0.1 per cent financial transaction levy will be introduced in August in France regardless of whether other European countries follow suit.

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