Coping with the economic impacts of Coronavirus (COVID-19), the French Government has announced “France Relance” (French Relaunch in English), a €100 billion (USD 118 billion) economic stimulus aimed at creating jobs, saving struggling businesses and pulling the country out of its worst economic slump it faced since World War II.
The Government has also shared the break-up of the economic stimulus. A €35 billion (U.S. $ 41 billion) will be used for making the euro zone’s second-biggest economy more competitive, €30 billion (U.S. $ 35 billion) will be used for implementing environmentally friendly energy schemes and €35 billion (U.S. $ 41 billion) will be dedicated to create jobs, social programmes and healthcare programmes.
Equating to 4% of Gross Domestic Product (GDP), France is putting more public cash into its economy than any other big European country as a percentage of GDP.
Speaking to media, the Prime Minister of France – Jean Castex said that the new plan will create 160,000 jobs by 2021. He also said that the economic stimulus is aimed at overcoming the economic crunch of COVID-19 in 2 years.
Announcing the “France Relaunch”, Castex tweeted (translated from French), “The crisis has brought to light the dependence of our economy on certain sectors which are vital for the country. #FranceRelance will invest heavily to relocate or locate these activities in the territory. #RTLmatin.” (La crise a mis en lumière la dépendance de notre économie dans certains secteurs qui sont vitaux pour le pays. #FranceRelance va investir massivement pour relocaliser ou localiser ces activités sur le territoire. #RTLmatin) –
Talking about the jobs, Castex tweeted (translated from French), “The plan #FranceRelance is not a gift given to companies, it is a gift given to France to fight against unemployment. #RTLmatin.” (Le plan #FranceRelance n’est pas un cadeau fait aux entreprises, c’est un cadeau fait à la France pour lutter contre le chômage. #RTLmatin)
He further tweeted (translated from French), “#FranceRelance is first and foremost a plan for the climate and biodiversity. It devotes 30 billion euros to it, which amounts to doubling, in the next two years, all the resources that the State usually devotes to the environment.”(#FranceRelance est d’abord un plan pour le climat et la biodiversité. Il y consacre 30 milliards d’euros, ce qui revient à doubler, dans les deux prochaines années, la totalité des moyens que l’État consacre habituellement à l’environnement.)
He also tweeted (translated from French), “It is economically and socially infinitely preferable to temporarily degrade public balances in order to invest, rearm the economy and start again, rather than sinking into austerity, allowing unemployment to explode and human tragedies. #FranceRelance.” (Il est économiquement et socialement infiniment préférable de dégrader temporairement les soldes publics pour investir, réarmer l’économie et repartir de l’avant, plutôt que de s’enfoncer dans l’austérité, laisser exploser le chômage, et les drames humains. #FranceRelance.)
The country’s recession, marked by a 13.8% second quarter GDP contraction that coincided with the country’s COVID-19 lockdown, is set to generate an 11% drop in 2020. The stimulus differs from other European countries because its focus more on creating business and keeping people in employment.
The stimulus is also important as President Emmanuel Macron wants to revive the economy before France goes for Presidential polls in April 2022. The plan is aimed to put Macron’s pro-business push back on track with already-flagged cuts in business taxes worth €10 billion (U.S. $ 12 billion) annually and fresh public funds to boost France’s industrial, construction and transport sectors.
The transport sector will get a pumping of €11 billion (U.S $ 13 billion) with €4.7 billion (U.S. $ 5.5 billion) targeting the rail network. €4 billion (U.S. $ 4.7 billion) will be utilised for converting public buildings into energy efficient buildings and €2 billion (U.S. $ 2.4 billion) will be directed for renovating homes to energy efficient homes. Another €1 billion (U.S. $ 1.2 billion) will be spent in industrial projects.
PM Castex has also announced that the Government will not raise the country’s already high taxes but will issue new treasury bonds instead.
The “France Relaunch” is 4 times of the amount France spent over a decade ago to deal with the 2008 global financial crisis.
