PARIS (Reuters) - President Francois Hollande brushed aside questions on Tuesday about an alleged affair with an actress as he announced reforms to ease the tax burden on business, reduce labour costs and cut public spending to revive France's stagnant economy.
He also called for France and Germany to harmonise corporate taxation and create a joint venture to help manage the transition to renewable energy, modelled on successful European planemaker Airbus.
With more than 500 journalists packed into the Elysee Palace ballroom for a formal New Year news conference, the Socialist head of state, deeply unpopular with voters, made no mention of the controversy about his private life in a 30-minute introductory speech.
His official partner, Valerie Trierweiler, is in hospital recovering from shock after a celebrity magazine published pictures of what it said was Hollande wearing a motorcylist's helmet visiting actress Julie Gayet for nocturnal trysts.
"Everyone in their personal life can face trials. That is our case," Hollande said when a French reporter ventured a coy question about Trierweiler's future as first lady.
"These are painful moments. But I have one principle, and that is that personal life should be treated privately, respecting each person's intimacy."
"This is neither the place nor the time to (discuss) that," Hollande said, adding that he would clarify the issue before an official visit to the United States on February 9, on which Trierweiler had been due to accompany him.
The president said he had chosen not to sue the magazine Closer for invading his privacy because as head of state he was immune from being sued himself and did not want to create a double standard. He did not deny the reported affair.
The French are traditionally indulgent of their leaders' sexual indiscretions and an opinion poll on Sunday showed an overwhelming majority said it did not change their view of Hollande, who was entitled to privacy in his personal life.
Before the embarrassing publication, he had become the least popular French president in modern times, largely due to tax increases, recession and high unemployment, compounded by a reputation for dithering.
Hollande sought to erase that image and burnish his status as a social democratic reformer as he detailed a proposed "responsibility pact" to reduce the tax and regulatory burden on companies in return for commitments to create jobs and boost training. As part of that drive, employers will no longer fund family allowances via payroll taxes from 2017.
He promised a further 50 billion euros in spending cuts in 2015-17 on top of a planned 14 billion this year, saying they could be achieved by making national and local government more efficient while preserving France's generous social model.
In first reactions, market economists cautiously praised Hollande's economic programme, some with tongue in cheek.
"More and more, the future French economic policy will look like that of the previous conservative majority," Dominique Barbet, market economist at BNP Paribas, said in a comment.
Ion-Marc Valahu, a fund manager at Geneva-based firm Clairinvest, said: "At least he's acknowledged that there are issues that need to be solved for the economy to recover, but they need to do a lot more to slow down the pace of job destruction. He can say what he wants, but 2017 is a long way to go."
Hollande strongly defended the European Union ahead of European Parliament elections in May and vowed he would not let those who sought to destroy European integration and pull France out of the euro prevail.
A recent poll suggested the anti-EU far-right National Front could come first in the European election in France, often used to register a protest vote, ahead of both the mainstream conservative opposition and the Socialists.
His proposal for a Franco-German joint energy company caused some surprise in Berlin, but officials said the two countries' environment ministers had been working on a detailed joint energy transition plan last year, until the French minister was sacked for criticising budget cuts.
Previous French announcements of joint industrial projects with Germany have often come to nothing or little, partly because private German industrialists are reluctant to work with state-influenced French companies.
Although a handful of journalists tried to follow up with questions on Hollande's personal life, the issue did not hijack the news conference or reveal any new information.
A similar event staged by predecessor Nicolas Sarkozy after his 2007 divorce was dominated by curiosity over his romance with singer Carla Bruni, whom he subsequently wed. When Sarkozy played up the relationship, telling reporters: "It's serious with Carla," opinion polls suggested voters disapproved of his flaunting of his personal life.
Although France does not have an official First Lady title, Trierweiler has her own office in the Elysee, a chauffeur and adviser, and accompanies Hollande on visits.
Hollande said she was resting and he had nothing further to say on her condition. (Additional reporting by Nicholas Vinocur, Alexandria Sage and Elizabeth Pineau; Writing by Paul Taylor; Editing by Giles Elgood)