2 May 2012 Last updated at 12:51 ET

France: Sarkozy v Hollande on the economy

Business people are taking what Francois Hollande says seriously as the next round of the election approaches

French President Nicolas Sarkozy takes on his Socialist rival Francois Hollande on 6 May.

The challenger is leading: Mr Sarkozy is the first incumbent since the Fifth Republic was founded in 1958 not to take first place in the first round of elections.

Meanwhile, Mr Hollande is bidding to become the first Socialist president in France in 17 years.

In January, ratings agency Standard and Poor's stripped France of its prestigious AAA rating, implying that it was no longer one of the safest places to invest.

Many are sceptical that France will be able to generate strong growth soon.

And France has not managed to balance its budget since 1976.

So how do Mr Sarkozy and Mr Hollande differ on their business and economic policies?

PUBLIC FINANCES
Sarkozy	Hollande
Balance the budget by 2016	Also balance the budget, but by 2017. Get the deficit down to 3% - which meets European rules - by the end of 2013
Increase VAT by 1.6 percentage points to 21.2%
Raise CSG (a social security contribution not unlike National Insurance) by two percentage points on income from investments	Merge income tax and CSG, and increase that by 0.1 percentage points every year to fund pensions
Mr Sarkozy changed the retirement age to 62 in 2010, sparking mass protests	Reduce the retirement age back to 60 for those who started working at 18 and who have at least 41 years of contributions

BANK REFORMS
Sarkozy	Hollande
A new financial tax of 0.1% on all shares bought. "We hope the tax will generate 1bn euros of new income and and thus cut our budget deficit," Mr Sarkozy said when proposing it in January	Implement a financial transactions tax, which will be used to help developing countries
Limit the bonuses that bank traders can get - without specifying by how much	Ban stock options and management bonuses
	Increase capital gain taxes on banks to 15%
	Separate investment and retail banks
	Concentrate French financial aid for exporters of French products

JOBS AND TAX
Sarkozy	Hollande
Mr Sarkozy is not in favour of increasing taxes on the richest	Two new higher tax rates, beginning with the headline-grabbing 75% tax rate on those with incomes above 1m euros
	A new 45% tax band on people with annual incomes above 450,000
Lower unemployment payments over time for unemployed people
Make it mandatory for unemployed people to have re-training and accept jobs that are offered
	Create 150,000 new "jobs of the future"
Adopt a global tax regime - as in the US and UK - whereby nationals pay income tax. So French nations would pay French taxes, regardless of where they are based	Target tax exiles in neighbouring countries like Switzerland and Luxembourg. Renegotiate the tax treaties with those nations
	Restore a measure under former prime minister Michel Rocard that capped total income and wealth tax on an individual at 85%

IMMIGRATION
Sarkozy	Hollande
Cut the number of legal migrants into France by half in the next five years	Debate annually in parliament how many workers should be let into France

EUROPE
Sarkozy	Hollande
Mr Sarkozy had argued for eurobonds, which pool government debt across the eurozone, but seems to accept that they will not happen because of Germany's intransigence on the issue. It seems it is no longer part of his agenda	Renegotiate the fiscal pact that was signed by 25 of the 27 EU members to include: the creation of eurobonds, which will be used to fund infrastructure projects, a financial transactions tax, using the European Investment Bank to invest in small business projects, and re-allocating the current allotment of structural funds that go unused to other projects
Make it so that growth - as well as inflation - is part of the mandate of the European Central Bank	Include growth as one of the ECB's mandate but so that the central bank favours growth over inflation
Create a European investment bank for SMEs
Amend the Schengen zone - which allows passport-free travel among 23 European nations - to introduce measures to stop illegal immigration If there is no serious progress made to amend Schengen in the next 12 months, then Mr Sarkozy says he will suspend the accord
	Committed to equilibrium between the euro, dollar and yuan
Implement a Buy European Act in the same way the US has a Buy American Act introduced in 1933, which prioritises locally-made products for use in public projects