French economy recovering, says Hollande

PARIS (AFP) – President Francois Hollande vowed Sunday to fight France's deep-rooted "pessimism" in the face of a struggling economy, while admitting the country's rail network should be better maintained after a deadly derailment.

In an interview with leading television channels to mark Bastille Day, Hollande insisted that recovery had already started in the French economy, which entered a recession this year and has record-high unemployment.

The deeply unpopular Hollande defended his first 14 months in office, saying his goal was to give "new confidence" to the country amid polls showing deep gloom among the French.

"For years we have been the most pessimistic country in Europe, in the world even. There are countries at war that are more optimistic than we are," Hollande told journalists from TF1 and France 2 television after attending the traditional Bastille Day military parade down the Champs Elysees.

France marked the holiday in mourning after Friday's rail accident on a regional line near Paris claimed six lives, and Hollande promised to make upgrading outdated lines a key priority.

"We must do much more to maintain traditional lines, existing lines," Hollande said, after officials complained of the country putting too much focus on its high-speed TGV lines.

With polls showing the economy and jobs as the country's top concerns, Hollande said France was already through the worst of its economic troubles.

"The economic recovery is here," he said, pointing to a pick-up in industrial production and slight recovery in consumption.

But with France struggling to get its deficit under control, Hollande could not rule out tax increases to help balance the budget.

"We will make -- we have made -- savings (in spending) and I will increase taxes only if absolutely necessary, ideally as little as possible," he said.

Hollande re-affirmed his promise to reverse the rise in unemployment by the end of the year, after the number of jobless in France hit a record 3.26 million.

"I am fighting" for jobs, Hollande said.