DOUAI, France (AP) — French President Nicolas Sarkozy unveiled yesterday a 26 billion-euro ($33 billion) stimulus plan to ward off recession and shore up automakers and construction.

The measures include around 1.3 billion euros to help carmakers avoid more lay-offs as sales tumble. Sarkozy floated the possibility of increasing that aid if US automakers succeed in tapping a sceptical Congress for rescue funding.

"I'm not excluding that the state does more," he said to a crowd of 2,000 supporters assembled near a Renault factory in Douai, in France's industrial north. "If our American friends do more for their own industry, I won't let the French automobile industry be disadvantaged compared to its competitors."

Most of the money in the two-year plan is destined for the construction industry, which will be helped by a 6.5 billion-euro investment programme. The government is also injecting 11.5 billion euros into the economy by front loading tax credits and rebates.

"In the current exceptional circumstances, we have a historic responsibility to improve France's facilities, infrastructure, universities and research," Sarkozy said.

The measures form part of a 200 billion-euro package proposed by the European Commission to boost the European Union's economy through spending and tax cuts.

National governments are to provide 170 billion euros — 1.2 percent of the EU's GDP — according to EU commission plans. France's package represents 1.3 percent of its GDP.

The measures will push the deficit near four percent of gross domestic product in 2009, above the European Union's limit. But the rules have been relaxed to help countries cope with the crisis.

The French plan is designed to add 0.6 percentage points to economic growth in 2009. Combined with other measures already announced and the knock-on effects of increased welfare spending, the government is counting on a one-point overall boost to economic growth.

The French economy narrowly escaped recession in the third quarter, growing 0.1 percent after three months of negative growth. But economists expect the fourth quarter will be tougher.

France says some of the measures — speeding up tax rebates, for example — will boost the economy without worsening the deficit. The true budgetary impact of the plans — subtracting measures and investments from state-owned companies — is 15.5 billion euros, Sarkozy said.

The government plans to spend an extra 4 billion euros in 2009 building or upgrading railways, roads, museums and schools, including 1.4 billion euros on defence. Local authorities will invest an extra 2.5 billion euros.

Electricité de France and other state-owned companies will contribute 4 billion euros to the plan by upgrading facilities.

To help companies deal with tighter credit conditions, Sarkozy said the government will speed up the reimbursement of sales tax, tax credits for research spending and various corporate charges. It is also speeding up payments of its bills to defence companies. The government said small and medium-sized companies will be the main beneficiaries.

The financing arms of both Renault and PSA Peugeot Citroen will each have access to a 500 million-euro fund to guarantee loans. Sarkozy also promised help to auto parts suppliers. The credit crunch has made it difficult for consumers and companies to finance large purchases.

Consumers will be encouraged with a 1,000-euro bonus for trading in vehicles older than 10 years for new low emission cars, for an estimated cost to the government of 220 million euros.

Sarkozy warned that help will be conditional on companies keeping jobs and production in France.

He also said he has earmarked 1.8 billion euros for public housing projects and to encourage home buying.