The economic recovery of the government takes shape - The Point

The timing of the economic recovery is accelerating. Emmanuel Macron will present, at the beginning of next week, a new sectoral plan support. After the culture

The economic recovery of the government takes shape - The Point

The timing of the economic recovery is accelerating. Emmanuel Macron will present, at the beginning of next week, a new sectoral plan support. After the culture, the tourism, the automobile, the executive will fly to the rescue of the airline industry after intense negotiations with the major industrialists of the sector and their sub-contractors. Friday, June 5, Bruno Le Maire, and Cedric O, the secretary of State to digital, should also announce measures to avoid that companies in the tech French do not fall into the hands of the american giants of the sector.

All of the ads that will be embodied in a new draft finance law, the third since the beginning of the health crisis, the Covid-19, presented on Wednesday, June 10, in the council of ministers.

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Support for learning

This text will also act to support measures in favour of the apprentices, in order to avoid a collapse of this sector. At the exit of a meeting with the social partners, the first being held physically at the Elysée palace since the beginning of the health crisis, the minister of Labour has announced the hiring of outstanding and "mass" of 5,000 € for minors or 8 000 euros for the major up to February 28, 2021, without the requirement for businesses with fewer than 250 employees. Those with more than 250 employees must, in return, reach more than 5 % of apprentices in the workforce in 2021, failing which the aid must be repaid. Such a measure comes down to taking full responsibility for the remuneration of apprentices who were under 21 years of age, which is expected to cost the State more than a billion euros, it is argued in the entourage of the minister. The youth will have six months to find a contract against three months in the cruise plan, once enrolled in their training centres, which will be funded for this. Every young person who has asked for a sector of learning will be offered training in its region, promises the department. Broader measures in favour of youth employment, in order to avoid a lost generation, are also on the program, but they will wait the beginning of July to be announced.

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at the same time, a consultation lightning will be conducted with the social partners to define a new regime of activity, partial more sustainable after the outstanding feature put in place for the containment. A plan of activity partial (or partial unemployment) long-term will also be imagined. But it will only be open to companies that manage to sign an agreement and commit to maintain employment. It should be more generous than the basic scheme in order to avoid massive layoffs in a context where the economic activity is not running yet at full speed, far from it. The schema used will be presented in mid-June. As to the reform of unemployment insurance was adopted prior to the health crisis, and was highly criticised by trade unions, it will also be discussed from mid-June in a consultation with the social partners. It could be buried or delayed even further.

recipes in a free-fall

It is, therefore, a considerable share of the recovery strategy French, which was unveiled in mid-June, after a first phase marked by the vote of the emergency economic loans guaranteed by the State, partial unemployment, reports of social charges and tax and the solidarity fund for very small businesses and the self-employed). It will then remain for the last part of the recovery promised, more structural one, that the minister of the Economy Bruno The Mayor wants to focus on reviving the productivity and competitiveness of france. The minister of the Economy fights to get a tax cut production, weighing on the French companies, before they even know if they have made a profit or not, but the trade-offs have not yet been made.

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The recession is now expected to be 11 % of GDP, which is expected to widen the budget deficit to 11.4 % compared to 9 % in the previous estimation of the government. Meanwhile, the budget revenues have collapsed due to the containment. Those of the VAT, but also social security contributions, corporate income tax and the tax on the consumption of petroleum products. The new forecast of Bercy provides almost $ 28 billion less revenue over the year 2020 compared to what was anticipated, there are still a few weeks, a reflection of the effect of strong confinement on economic activity. Between 2019 and 2020, the tax revenues should as well have plunged more than 100 billion euros, 1 069 billion to 968 billion, according to the ministry of Economy and Finance. The debt was flirting with 121% of GDP compared to less than 100 % prior to the crisis.

At Bercy, we prefer to insist on the new phase that represents the presentation of this copy to budget to get out of the rut of the economic crisis. It would include 13 billion euros in new budget appropriations allocated to the various stimulus plans of the sector. Counting loans and guarantees, € 40 billion in all, would be mobilized.

A fund to support the aeronautics industry of 500 million euros

To fly to the rescue of an aeronautics industry in danger of death with the stop of air traffic, the State will form an investment fund of 500 million euros that is paid for by the four largest sector, Safran, Thales, Airbus and Dassault, in order to invest own funds in the sub-contractors. Means should be identified to support investment and innovation in the sector in order to avoid a failure of the research on the reduction of greenhouse gas emissions from aviation. Guarantees exports made by the State will be elongated for a year at Airbus, in order to avoid order cancellations by the airlines, whose fleet is nailed to the ground. According to Bercy, this measure alone represents over a billion euros of expenditure. New measures to support small business are also in preparation, " at the request of the president of the Republic ", but they should not be announced before July.

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This new amending budget will also be an opportunity to implement some of the levers of european recovery, including new loans from the european investment Bank, which should reach a little over 35 billion euros for French companies, as well as unemployment insurance european. The device SURE european, which allows for part-funding the part-time unemployment, it should be enabled, for about one billion euros.

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No decrease of the VAT

Bruno The Mayor excludes, however, any reduction in VAT to boost demand, the opposite of Germany has just announced a temporary decrease until the end of the year. The first signs of the déconfinement suggest that the consumption could accelerate any only thanks to the savings accumulated by the French during this period. The Medef was an applicant for such a measure, which would have helped to increase the margins of business if they could not pass on the reduction of VAT on their prices... At Bercy, one invokes the fact that the VAT revenue of france represent more than 15 % of the GDP as against 20 % in Germany, because of the multiplication of the reduced rates. The Economy minister said he preferred to put the emphasis on the competitiveness of French businesses, rather than on demand, outside of targeted measures such as holiday vouchers for families of modest means, to urge them to go on holiday to France and thereby to support the tourism.

" France has lost competitiveness in recent decades compared to Germany, which means that the effort must be focused on the improvement of our productivity, our competitiveness and the attractiveness of the territory. This policy gave excellent results before the crisis. We want to continue and emphasise the environmental aspect ", assumes Bruno Le Maire. Still it would be necessary to convince the majority to follow this line that passes through tax cuts to businesses, which is more difficult to sell to the public.

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writing will advise you

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Date Of Update: 04 June 2020, 19:33

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