French President Nicolas Sarkozy has announced 430 million euro worth of new measures aimed at kick-starting France's beleaguered economy and reducing unemployment.

France's President Nicolas Sarkozy delivers a speech to present his New Year wishes to the foreign diplomatic corps at the Elysee Palace in Paris January 20, 2012.

At a crisis jobs summit in Paris, the French president also proposed an overhaul of labour rules that he says will boost employment by making French labour cheaper and more flexible. But union leaders say they're not going to be rushed into reforms.

Another crisis summit. Not the euro this time, but rather a crisis closer to home. France is on the brink of recession and unemployment is at an almost 12 year high. So at his "crisis social summit" with labour and business leaders Sarkozy proposed reforms to try and get more people back into work. But his key proposal of shifting social charges to value-added taxes was met with strong resistance from union leaders. They say high labour costs are not to blame for French unemployment.

Bernard Thibault, head of General Confederation of Labor Unions said: "I'm not going to waste my time picking up various measures which, from our point of view, won't have any real impact on the situation of unemployment today."

The so called social VAT is an unpopular proposal from an already unpopular president. The unions say it will just make consumer goods more expensive and they won't accept it. Polls show that most French people don't want it either.

Economic analyst Jacques Delpla said: "They're deliberately opting for an unpopular policy - because VAT increase is not popular - just to show the voters 'I am ready to take unpopular measures just to save the country while the socialist opposition is still in the dreams'."

Reporter said: "Pressure on the president to act decisively intensified last week when Standard & Poor's cited "labor market rigidities" as a reason for its downgrade of France's credit rating. Sarkozy will outline his full plans for reform later this month with union leaders already voicing opposition there is little optimism here that the government or the unions will be able to push the job market in the direction of real reform.