France budget: First tranche of $117bn recovery funds to be released 'immediately'

France's finance minister, Bruno Le Maire, has promised to spend his annual budget rapidly as the European Union's second biggest economy plots a recovery from the greatest decline in its history.

Le Maire presented his 2021 budget on Monday and said the first tranche of his $117 billion plan would be made available immediately.

This comes as the country faces a surge in the number of new COVID-19 infections, while polls show 72 percent of French people support the idea of a national two-week lockdown to try to stem the wave of new cases.

Le Maire said $49 billion would be pumped into the economy in the first year of its $117 billion two-year recovery plan.

The government admitted that it expects the economy to contract by a record amount this year but said it hopes to use the budget to boost a return to growth of eight percent in 2021.

"We have re-evaluated the recession figure at minus 10 percent for 2020," Le Maire told journalists at the unveiling of the budget.

"We had been cautious in presenting this figure because we knew that there was a health risk and that there were international uncertainties.

"We therefore confirm this cautious assessment of minus 10 percent recession for 2020. For 2021, on the other hand, we maintain a growth assessment of  plus 8 percent, because we are convinced that France can recover and recover quickly."

The French finance minister also defended the government's handling of the coronavirus crisis, saying: "We are not wasting any time to get the money moving, which will allow our economy to recover."

Bruno Le Maire said the government saved "hundreds of thousands of jobs and tens of thousands of companies" with its support package.

France's economy was rocked by the effects of the pandemic and ministers are hoping that tax cuts, investment in the green economy and a focus on youth will paint a brighter economic picture in 2021.

Some analysts say several industries, such as retail and travel, will keep suffering, despite the government's budgetary measures.

Patrick Artus, the chief economist at Natixis, an investment bank, told CGTN Europe that for him the issue with the budget is not at the macroeconomic level – but rather in specific sectors at the microeconomic sphere.

"The big issue is that this crisis is distorting the sectoral structure of the economy.

"It's very likely that less people will take a plane, less people will take holidays very far away, it's very likely that we will shop more online, we will work from home and we will use electric cars more than normal cars.

"We have permanent changes in the sectoral structure of the economy."

 

Source: https://newseu.cgtn.com/news/2020-09-29/France-budget-First-wave-of-117bn-recovery-released-immediately--UbkiyxTNIY/index.html

 

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