France unveils 100-bln-euro recovery plan

Xinhua News,PARIS
2020-09-03 23:03

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PARIS, Sept. 3 (Xinhua) -- The French government aims to mobilize 100 billion euros (118 billion U.S. dollars) in a recovery plan "of historic size" to help the country recover from the coronavirus pandemic crisis, Prime Minister Jean Castex announced on Thursday.

Ecological transition, competitiveness and social cohesion were identified as the three pillars of the plan dubbed "France Relaunch," which Castex said was "the most massive announced to date among major European countries."


Over 30 billion euros will be assigned to ecological transition, or the "green pillar." This bracket will include 6.7 billion euros for the energy renovation of buildings, 11 billion euros for developing low-emission transport -- in particular the rail network of national operator SNCF -- and seven billion euros to be invested by 2030 to "make France a country at the forefront of hydrogen innovation."

"We will make hydrogen one of the key elements of this strategy to be independent in the production of green hydrogen, as will be other European nations, such as Germany," said Minister of the Economy, Finance and the Recovery Bruno Le Maire at a joint press conference with other cabinet members.

Significant tax cuts and subsidies for relocation, especially in 11 key sectors such as healthcare, are planned to boost France's competitiveness. "We will lower production taxes by 10 billion euros," said Le Maire.

"We want to turn the tide: relocate. (...) We have started and we will continue to do so. We will invest one billion euros in calls for projects to support any industrial company that would like to improve its production and build new lines," he said.

Some 11 billion euros have been set aside for "investment for the future." "France has been resting on its laurels for 20 years, with very good sectors -- agri-food, health, luxury, etc. -- but without opening up new industrial sectors. It is time to move on," said Le Maire.

"In quantum computing, in the treatment of water and waste, France must be the European leader and the world leader," he said.

Some 15 billion euros have been earmarked to support employment, including a 6.7-billion-euro "plan for the youth" and an "anti-layoff shield" worth 7.6 billion euros.

Castex reiterated that fighting unemployment is the plan's absolute top priority. "I hope that the relaunch plan will create 160,000 jobs in 2021 -- that is our aim," he told broadcaster RTL earlier in the day.


Of the 100 billion euros that France plans to spend, 40 billion would come from the European Union (EU), said Clement Beaune, Minister of State for European Affairs, attached to the Minister for Europe and Foreign Affairs.

The EU voted in July to mobilize some 750 billion euros, including 390 billion euros in subsidies, to finance member countries' national recovery plans. Each of these plans must be assessed by the European Commission and then validated by a qualified majority of the 27 member states.

France will present its national recovery plan to its European partners "probably in October," said Beaune.

"The first payment will be made in early 2021. We are fighting for that," he said.

The rest will be covered by the national budget and Castex promised "no tax hike" while safeguarding the sustainability of public debt, expected to hit over 120 percent of gross domestic product (GDP) this year.

"If the plan achieves its objective of relaunching activity, its impact on our debt ratio will be almost entirely absorbed from 2025," he told the press conference.

France has seen its GDP shrink by a record 13.8 percent in the second quarter of 2020, after a contraction of 5.9 percent in the first quarter and 0.2 percent in the last quarter of 2019.

"This is the strongest recession since 1929," said Castex before unveiling the massive recovery plan. "France holds on but is undoubtedly weakened."

He stressed that everything must be done to avoid a second epidemic wave that would allow a better implementation of the recovery plan.

However, the coronavirus has resurged in recent weeks across the country, forcing the authorities to reimpose some of the sanitary restrictions.
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