DOUAI President Nicolas Sarkozy unveiled a 26-billion-euro stimulus plan on Thursday to help France resist the global slowdown with massive state investment and aid for the struggling car industry.

Frances contribution to a Europe-wide economic revival drive, the plan combines big state infrastructure projects such as four new high-speed TGV train lines with measures to shore up hard-hit businesses and boost housing.

'Our answer to the crisis is a massive investment drive, because that is the best way to support businesses and to protect jobs,' Sarkozy said during a trip to Douai in northern France, home to a major Renault car factory.

Sarkozy announced a total of 10.5 billion euros (13 billion dollars) in state investments, pulling forward four billion euros of scheduled projects on top of four billion euros for the state energy, transport and postal companies.

To improve business cashflow, Sarkozy said the state would speed up the repayment of sales tax and of tax refunds for research and development investments in a package of measures worth 11 billion euros.

A mix of tax breaks and other incentives for businesses worth 700 million euros were rolled out to encourage job creation after recent data confirmed France had crossed the threshold of two million jobless in October.

Sarkozy unveiled targeted measures worth 1.5 billion euros for the car and construction industries, which together account for about four million French jobs and have been hardest hit by the spike in the countrys jobless figures.

A 300-million-euro restructuring fund for the car industry, notably car parts suppliers, was unveiled along with a bonus of 1,000 euros for car owners who scrap their old vehicle to buy an energy-efficient new one.

The French state will also provide a one-billion-euro loan facility to support national champions Renault and Peugeot, which have announced thousands of job cuts amid a collapse in sales.

For struggling construction firms, Sarkozy announced plans to build 100,000 new social housing units, support energy-efficient property renovation work and to double zero-per cent property loans.

The lowest-income French families were also set to receive a one-off 'bonus' of 200 euros to boost flagging consumer spending.

The plan worth 26 billion euros will put French public spending further in the red by 15 billion euros, with the public deficit set to climb to 4 per cent of GDP, beyond the 3-per cent European benchmark, officials said.