Paris  - The French government has used its new Strategic Investment Fund (FSI) to purchase part of one of the world's largest auto equipment suppliers, Valeo SA, an official with the fund said on Wednesday.

The FSI paid 18.5 million euros (23.8 million dollars) for a 2.35 per cent share of Valeo. Added to the shares purchased previously by the state bank CDC, that raises the government' s share of Valeo to 8.33 per cent.

The purchase is the first transaction by the fund, which was created in December to enable the government to inject capital in struggling firms in order to prevent them from failing or being taken over by foreign companies.

Paris - In an apparent compromise with the European Commission, the French government is prepared to drop a condition in an aid package to its auto industry that has been criticized as anti-competitive, the daily Le Figaro reported on Wednesday.

Citing a source in the government, the daily said that Paris was now prepared to drop a requirement that car makers Renault and PSA Peugeot Citroen would not shut any French factories for five years in exchange for loans of 3 billion euros (3.86 billion dollars) each.

Paris - Thomas Leysen couldn't contain his happiness and wanted to tell everyone about the excellent purchase he had just made at the Paris auction of the art collection of the late French fashion legend Yves Saint Laurent and his longtime partner.

"I paid an acceptable price," Leysen said, with a sly smile. "I was even prepared to go a little higher."

Leysen, a businessman in his forties from the Belgian city of Antwerp, had just made the high bid of 100,000 euros (128,600 dollars) for an oil painting by the Flemish Baroque artist Cornelis de Vos.

Brussels - The European Commission was Wednesday expected to recommend the creation of a pan-European financial watchdog and issue guidelines on how to dispose of toxic assets held by European banks.

The call for a European-wide supervisory body is contained in a report by Jacques de Larosiere, a former head of the International Monetary Fund (IMF) and of the French central bank.

De Larosiere was asked by European Commission President Jose Manuel Barroso to provide ways of preventing a repeat of the current financial crisis at a time in which banks have become increasingly international.

Wellington - Air New Zealand criticized Wednesday the handling of a preliminary report by French investigators into a crash of one of its Airbus planes in the Mediterranean that blamed crew error.

New Zealand investigators also said a low-altitude stall which happened before the A320 plane crashed into the sea off Perpignan in southern France could not happen under normal flying operations.

The two German pilots and five New Zealanders performing in-flight checks before returning the plane to Air New Zealand at the end of a lease agreement with XL Airways died instantly.

London, Feb 25: In a bid to take his mind off the day job, French President Nicolas Sarkozy has taken up stamp collecting.

Giving a sneak peak into the 54-year-old''s private life, it was revealed fellow heads of state including the Queen have helped Sarko fill his albums.

Sarkozy even sponsors the Elysee Philatelist Club, named after the Paris palace where he lives with wife Carla Bruni - who says she is delighted he has given up "less appropriate" pastimes, including karaoke singing, sources have revealed.