By Masha MacPherson | AP | Jul. 9, 2012

PARIS (AP) -- France enjoyed a boost in investor confidence with a successful bond auction Monday - but also got a warning from the president that growth so far this year is "nil" and that the country needs to rethink its social model.

France's government sold (EURO)6 billlion in short-term bonds at negative interest rates Monday, as investors flock to the perceived safety of Europe's larger economies. It was the first time rates entered negative territory, according to the French Treasury.

France's borrowing costs have been dropping in recent months as those in neighboring Spain have soared and raised fears that it, too, will need a bailout.

France, the No. 2 economy in Europe, has high debts of its own and 10-percent unemployment, and is struggling to avoid a new recession.

"Everybody knows that in the first half of the year, growth will be nil. So we need to mobilize all our forces, all our imagination, all our capacities to achieve lasting growth for the years ahead," French President Francois Hollande said Monday at a conference with labor and business leaders meant to lay the groundwork for new jobs policies.

"My goal is to make our social model evolve to better guarantee" its future, Hollande said. "The time has come to put France on the move, and there is no time to lose."

Among Hollande's proposals is a special new job contract under which employers would get tax breaks if they hire a young person and keep an older employee at the same time, instead of choosing one or the other.

He has also said that companies who abuse temporary contracts instead of long-term contracts should have to pay more into the state unemployment system.

France had conservative presidents for the past 17 years who regularly clashed with unions when changing pension rules, raising the retirement age or trying to make it easier to hire and fire workers. Some economists have speculated that Hollande, as a leftist, may have a better chance at convincing French unions to accept changes to worker protections that many see as hurting France's competitiveness in today's global economy.

Hollande said he wants the constitution to require politicians to consult with unions before making any major labor decisions. "No law from the domain of economic and social life will be able to be voted by the Parliament without a phase of dialogue and consultation prior to it," he said.

In Monday's bond sale, the treasury sold three-month bonds at -0.005 percent, and six-month bonds at -0.006 percent. The treasury agency says it's the first time they have registered negative yields.