The government presented its third budget crisis - The Point

Bercy reviews once again its copy. The government will be presenting Wednesday, June 10, in the council of ministers, his third finance bill rectifictive (PLFR)

The government presented its third budget crisis - The Point

Bercy reviews once again its copy. The government will be presenting Wednesday, June 10, in the council of ministers, his third finance bill rectifictive (PLFR) since the beginning of the crisis related to the epidemic of Covid-19. It corresponds to the " second time of the response to the crisis ", has informed on Tuesday evening the minister of the Economy Bruno Le Maire said on RTL. "The second time, it is to come to the rescue of all the sectors that are most threatened ", he added.

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After the more than 400 billion euros of emergency measures taken in the previous two budgets, this new amended budget will push up public support for "460 billions" of euros, said the minister. It includes as well the 18 billion euros of the aid plan for the tourism sector, one of the most affected by the containment with the travel restrictions and the closure that continues, in part, to the cafes and restaurants.

It also includes € 8 billion of the plan for the automotive industry announced in late may, the 600 million for the french tech unveiled last Friday, the 15 billion euros of support from the aeronautical sector and the aid sector of the book unveiled Tuesday. This is an addition to measures in favour of small business and of the building, has indicated Bercy.

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Regain your confidence

" The focus is on sectors which are markers forts of the French economy and which affect a lot of jobs. This allows you to send a positive signal to support the confidence of entrepreneurs and households, " said Helene Baudchon, economist at BNP Paribas.

Then that is looming bankruptcies and layoffs, the government will strengthen by approximately 5 billion euros, the scheme of partial unemployment and will unlock $ 1 billion to expand aid to businesses that hire an apprentice. Even if at Bercy, it is committed to a policy of support for "the offer" in the budget, it will also incorporate exceptional aid direct for 800 000 precarious situation of the young under 25 years of age and households.

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Finally, he should endorse the support of 4.5 billion euros of State for communities, at a time when their revenue base with the crisis and where their costs are increasing to cope with the epidemic. In total, however, the direct budgetary cost extra will account for only about 13 billion euros, with the remainder of the measures of cash-reports expenses, secured loans, etc).

criticism about the government's choice

But the deployment of these billions of euros gives rise to criticism. Some areas feel forgotten, such as agriculture or public transport. The environmental NGO Greenpeace regrets, it, that next to the $ 15 billion for aircraft and $ 8 billion for the automobile, there is " always zero for the revival of the railway ", the less emitter of greenhouse gases. In addition to these plans, the government is forced to increase its economic forecasts for this year. It is now forecasting a recession - 11 %, against 8 % drop of the GDP-ahead there are only a few weeks.

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"You see that the situation has evolved significantly in a short time (...) and this shock recessive was that it was necessary to take more measures of support," notes Hélène Baudchon. The difficulties of the tourism sector should be alone amputate the GDP of almost one point this year.

Result : with the tax revenues that will melt down with $ 27 billion more compared to the estimate already down from the previous amended budget, the deficit is expected to rise to 11.4 % of GDP and the public debt swell to 120,9 %, estimates the government. On Tuesday, the Bank of France has relied on a fall of approximately 10 % of the French GDP, this year, penalised in particular by a decline of 9% of the consumption, the mechanical effect of the increase in household savings, which is expected to swell to 100 billion euros.

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Updated Date: 10 June 2020, 01:33

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