France unveils €100-billion economy rescue plan

The $118 billion stimulus equates to 4% of gross domestic product, meaning France is ploughing more public cash into its economy as a percentage of GDP than any other big European country, an official said ahead of its formal launch later on Thurs...

Agencies
Emmanuel Macron (File Pic)
PARIS: France will spend ¤100 billion to help pull its economy out of one of Europe’s worst coronavirus-induced slumps, under a recovery plan that revives pro-business reforms championed by President Emmanuel Macron with a greener tinge.

The $118 billion stimulus equates to 4% of gross domestic product, meaning France is ploughing more public cash into its economy as a percentage of GDP than any other big European country, an official said ahead of its formal launch later on Thursday.

France’s recession, marked by a 13.8% second quarter GDP contraction that coincided with a Covid-19 lockdown and expected to generate an 11% drop in 2020 as a whole, has also been one of the region’s deepest.


Focused mainly on boosting companies and running over two years, the stimulus package earmarks ¤35 billion to make the economy more competitive and ¤30 billion to promote greener energy policies.

“This recovery plan aims to keep our economy from collapsing and unemployment exploding,” Prime Minister Jean Castex said on RTL radio. He said the government aimed to create at least 160,000 jobs next year under the plan.

Macron is banking on the plan returning the euro zone's second biggest economy to precrisis levels of activity by 2022 -re-election year should he decide to run again - after what is expected to be its worst post-war recession.
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However, it does little to directly support the traditional the engine of French growth, consumer demand. By contrast, neighbouring Germany launched a 130 billion euro stimulus in June with a cut in value added sales tax.
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