New French stimulus spending gets heads-up

PARIS, Nov. 20 (UPI) -- Two former prime ministers recommended Thursday to President Nicolas Sarkozy that France spend $52 billion promoting economic growth.

The money would be raised through a 35-billion euro bond issue, The New York Times reported. Half the money would go to universities and research institutes while Michal Rocard and Alain Juppe recommended the rest of the money go to green economy investments.

Sarkozy named Rocard and Juppe to study potential investments.

The Organization for Economic Cooperation and Development, a research group based in Paris, warned France against the "grand loan," as the bond has been dubbed.

"Such a measure risks being pro-cyclical, coming too late to aid the recovery and making the task of inevitable fiscal consolidation more difficult," the OECD said. "Possibly attractive projects should be financed via spending cuts in less attractive categories, or by increasing inheritance and property taxes, as is currently being discussed."

The European Union has also suggested its members begin winding down stimulus spending.