Macron weighs economics versus politics in French reopening

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As French bars and restaurants reopened last week, President Emmanuel Macron’s government steeled for a big moment: how to wean the Covid-battered economy off life support and nurse it back to health. When the pandemic began, Macron promised to do “whatever it takes” to support businesses and workers with an array of programmes, such as furloughs, loans and cash support. But now, as emergency aid begins to be scaled back, the president, who is running for re-election in May, must show voters that he can put the French economy back on track. Already prominent economists and political opponents like Marine Le Pen are urging the government to think bigger in terms of stimulus.  Macron has floated the idea of more state spending by saying he wants to consult broadly with citizens and business leaders this summer to “invent a second phase of the [economic] relaunch” — on top of the €100bn recovery plan France has already submitted for EU approval. Ministers have also dangled the tantalising prospect of more money, while adding the country must wait and see how the economy performs under that plan. Meanwhile, in an attempt to show voters Macron’s weight on the European stage, France has started to lobby for new EU initiatives to bolster investment to keep up with the faster growing US and Chinese economies. Marine Le Pen has urged the French government to think bigger in terms of stimulus © Thomas Coex/AFP via Getty Images “The question that could be asked, is whether we will need an investment plan for the long term because if we are planning by 2022 . . . to get back to the level of economic activity we had in 2019, can we not try to do better?” as finance minister Bruno Le Maire told France Info. In Brussels, there is little appetite to reopen talks on the 27-member bloc’s €750bn recovery plan: “It is way too early,” Margrethe Vestager, European Commission executive vice-president, told Les Echos newspaper.  France is to get €40bn of its €100bn recovery plan from Europe. And while that EU money has yet to start flowing, France has already allocated €30bn to projects. These are based around three priorities: green investment, such as research into clean fuels and renovating buildings; competitiveness-increasing measures, such as modernising factories, and; “social cohesion”, which includes health and jobs training.  But the difficulties of getting more money agreed in Europe, and the fact that Macron and his ministers have played down any near-term EU deal, has fuelled suggestions that politics is also driving the French president’s concerns about the US and China stealing a march on innovation.

 

Source: Macron weighs economics versus politics in French reopening | Financial Times (ft.com)

 

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