France announces €100billion plan to relaunch economy
French Prime Minister Jean Castex announced the economic relaunch plan to counteract the economic effect of the Covid-19 crisis, with the objective of creating 160,000 jobs in 2021.
Mr Castex was speaking on radio channel RTL this morning (September 3). He said: “This is a gift for France to relaunch the economy and fight against unemployment.”
The €100billion plan will be presented to cabinet ministers this morning, after which the Prime Minister will hold a press conference to give more details.
Mr Castex said the plan would be “a massive re-injection of money into the economy, so that the economy and businesses can share it,” in order to “avoid a maximum of redundancies”. Details announced so far include an objective of creating 160,000 jobs in 2021.
The plan, named France Relance (Relaunch France), will involve spending and investments of €100 billion, partially financed by the European Union. According to Mr Castex in an interview with newspaper Le Figaro, this makes the plan “the biggest announced to date by any European country".
The money will be divided between three economic priorities:
- €30 billion for encouraging the economy to flourish
- €35 billion for encouraging competitiveness (by lowering taxes, for example)
- €35 billion for social and local cohesion (health, jobs for young people, etc.)
Short and long-term objectives
While the plan has been created with the intention to safeguard jobs and relaunch the economy in the short-term, it will also gear the country towards long-term objectives. These include the transition of energy use, technological competitiveness, and the digital revolution.
Plans for energy use
To these ends, industries that are among the highest greenhouse gas producers will be supported in a transition to clean energy, and €11 billion will be invested in transport. Plans include developing new train lines, public transport that uses green energy, cycling provision and support for buying eco-friendly vehicles.
Public buildings will receive €4 billion and housing €2 billion to support eco-friendly renovations.
Organisations will receive €9 billion to support a transition to carbon neutrality by 2050. Durable agriculture, which prioritises minimal transportation, will be given €1.2 billion, and drinking water networks will be developed, particularly in overseas territories.
Technological competitiveness and the digital revolution
As well as government plans to lower taxes for businesses, investments in the technological sector are planned.
The government aims to bring taxes down to the same level as in other EU countries to increase the competitiveness of French businesses. Tax cuts of up to €10 billion per year are planned.
To support the private and public digital sector, the state plans to continue its digitisation with an investment of €1.6 billion. High-speed internet provision will receive an investment of €500 million to improve services across France.
Support of up to €1 billion will be given for relocation programmes in the health, electronics, food and agriculture, 5G and industrial sectors, and small businesses will have access to aid to help them digitalise their offerings.
Jobs for young people
The government has allocated €6.7 billion in support for 750,000 young people in France who are newly entering the job market.
Support measures will include a reduction of up to €4,000 in employment charges for new hiring of workers under the age of 26, up to 200,000 free or accessible places on training courses available on the government’s Mon Compte de Formation (my training account) app, and the creation of 100,000 civil service positions.