France will keep its 35-hour working week in order to enable employees to add tax-deductible overtime to their salaries and boost growth, President Nicolas Sarkozy said yesterday.

Sarkozy also rejected the idea of budget austerity, saying his strategy for balancing France's budget by 2012 - as promised to EU partners - was for the nation to generate more wealth through rising employment and increased overtime.

He has called the 35-hour week, brought in by a Socialist government 10 years ago, an "economic catastrophe", but appears reluctant to scrap it for fear of angering unions and voters.