Econostrum | Economic News in the Mediterranean

France Relance puts €100 billion on the table to accompany the post-Covid period

Written by Frédéric Dubessy on Thursday, September 3rd 2020 à 11:45 | Read 398 times

Jean Castex specified the details of the France Relance plan already announced at the Meeting of Entrepreneurs of France (photo: French Government)
Jean Castex specified the details of the France Relance plan already announced at the Meeting of Entrepreneurs of France (photo: French Government)
FRANCE. Already announced in these broad outlines at the end of August 2020 at the Medef summer university by Jean Castex, the French recovery plan to fight against the economic consequences of Covid-19 was specified in details on Thursday 3 September 2020 by the Prime Minister.

Worth €100 billion over two years, or 4.3% of its GDP, it is broken down into three main chapters: competitiveness (€35 billion), social and territorial cohesion (€35 billion) and ecological transition (€30 billion). 40% of this amount will come from the European Recovery Plan adopted at the end of July 2020 and endowed with €750 billion.

For Emmanuel Macron, this plan "is particularly ambitious. It is one of the largest in Europe in terms of GDP (...) The time has come for recovery". It aims to restore confidence and revive the French economy, which has been badly hit with a 13.8% contraction in growth in April, May and June - following a 5% decline in the first quarter of 2020 - and the prospect of an 11% recession in 2020.

3 bn to support companies' equity capital

Among the main measures unveiled by the French Prime Minister and concerning competitiveness is an annual reduction of €20 bn (10 bn in 2021 and 10 bn in 2022) in production taxes. This will be achieved through a halving of the contribution to companies' added value and a halving of property taxes on industrial sites. The government estimates that this provision will benefit 42% of medium-sized companies, 32% of SMEs and 26% of large companies.

At the same time, the government will offer €3 billion in support of companies' equity capital and allocate €1 billion (€400 million from the existing industrial regions and €600 million from a call for projects to relocate production in France) to the industrial development of these regions. 385 M€ will be allocated to the digital transition of SMEs.

Objective of creating 160,000 jobs

The social and territorial cohesion chapter is based on a €6.5 billion plan for youth employment (including a €4,000 grant to hire a young person under 25 for a minimum of three months), a €6.6 billion unemployment shield deployed for partial long-term activity and the strengthening of the FNE-Formation system, as well as a €5.2 billion budget to support local authority investment. Hospitals will receive €6 billion to support their investments.

The €30 bn earmarked for green growth will be divided into €11 bn for transportation (including €4.7 bn to the SNCF to develop rail freight, short lines and night trains), €9 bn to support companies in their energy transition, €7 bn to promote the energy renovation of buildings, €1.2 bn to support more sustainable agriculture and healthier food and €300 bn to accelerate the renovation of water networks, particularly in overseas France.

"France Relance's objective is to create 160,000 jobs in 2021. This is not just talk: we will have concrete indicators and transparent monitoring tools to which Parliament and social partners will have access," stressed Jean Castex on twitter on Thursday, September 3, 2020. Speaking on France Bleu Paris on Thursday, September 3, 2020, Bernard Cohen-Hadad replied: "I think that, unfortunately, we do not decree hiring. We need a favorable environment for companies, maintaining stability, restoring confidence and maintaining aid as well." While acknowledging that €35 billion in aid to companies "is not a small amount", the president of the CGPME in the region just hopes that it "does not come too late." 

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