UPDATE 1-French Socialists outline 2012 election manifesto

* French Socialists eye return to power with 2012 manifesto

* Prime mass job-creation programme, end of tax giveaways

* Manifesto may be tweaked once presidential candidate known

* Deficit target for 2013 may slip to 2014

(updates after news conference)

By Brian Love

PARIS, April 5 (Reuters) – France’s Socialist Party unveiled
an election manifesto on Tuesday promising to create hundreds of
thousands of subsidised jobs and scrap tax breaks if it takes
power in 2012 after a decade of conservative government.

The manifesto presented by party boss Martine Aubry amounted
to an opening salvo from the main opposition party pending the
selection of its presidential challenger later this year.

Among the party’s flagship proposals was a pledge to create
300,000 state-assisted jobs for young people, a policy the left
pursued when it was last in power in 1997-2002.

Just as striking as the proposal itself is the fact that it
is a policy previously deployed at the end of the 1990s by the
man pollsters consider the Socialists’ best presidential hope
for 2012 — Dominique Strauss-Kahn, a former finance minister
who now heads the Washington-based International Monetary Fund.

“This is a programme for all Socialists,” Aubry told a news
conference. “We don’t have a right to fail on employment.”

She hopes the manifesto, still vague by her own admission on
areas such as commitment to nuclear energy, will help the
Socialists speak with one voice in the warm-up for presidential
and parliamentary elections in the second quarter of next year.

President Nicolas Sarkozy’s personal popularity ratings have
hit rock bottom and his centre-right UMP party is increasingly
riven by division after local election losses to the left, and
gains by the far-right National Front.

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The Socialist manifesto, sure to be tweaked and fleshed out
by whoever emerges as presidential challenger from a Socialist
pre-selection process scheduled to end in October, sounded a
classic left-wing tone.

It accused Sarkozy and his government of eroding confidence
and people’s spending power while giving too much money away in
tax breaks that benefit the wealthy while subjecting the more
needy to excessive austerity.

To rectify this, the Socialists would abolish 50 billion
euros of tax breaks — the manifesto spoke of areas including
wealth tax, property tax and low sales tax rates for restaurants
— and said half of that 50 billion would go to deficit-cutting
while the other half paid for its policy pledges.

It also proposed introducing a two-speed corporate tax rate:
firms that reinvest all profits would see their profit tax rate
drop to 20 percent from 33 percent but the rate would rise to 40
percent for firms that doled profits out in investor dividends.
The manifesto said France, like the rest of Europe, had no
choice but to reduce its debt and public deficit, but it said
the priority was to boost economic growth to get there rather
than depending solely on austerity measures.

Michel Sapin, a former finance minister and lead author of
the economic part of the manifesto, said the primary goal was to
boost growth by boosting jobs and, in so doing, reduce the
deficit and knock France’s debt into reverse from 2014 onwards.

France’s commitment to shave its public deficit back below 3
percent of gross domestic product in 2013 was possible although
not certain, he said.

But economic growth of 2.5 percent a year, something the
centre-right had not achieved at any time in the past 20 years,
was something the Socialists achieved when last in power and
could do again, he said.

The minimum retirement age, being increased to 62 under the
flagship reform of Sarkozy’s presidency, would be brought back
down to 60 under the Socialists, the manifesto said.

(Editing by Mark Heinrich)

UPDATE 1-French Socialists outline 2012 election manifesto