France proposes €10,000 ‘independence loan’ for 18-25s
The loan would be zero-interest and repayable over 30 years by recipients who could afford its repayment, and could be used to facilitate studying or entrepreneurship
Young people in France could be given a zero-interest loan of €10,000 from the government to help “facilitate their independence”, a new proposal from ruling party LREM has suggested.
This “youth capital” would be repayable over 30 years only if their income allowed this.
The suggestion came yesterday from La République En Marche (LREM) MP and director Stanislas Guerini, who said that the party wanted to create the new loan “as soon as possible”, for those aged 18-25.
The loan would be intended to help young people “launch their lives”.
It would be primarily intended to finance university studies, student housing costs, or the freedom to focus entirely on studying without needing to get a job alongside. It could also be used to help young people start their own business.
An estimated five million young people in France could be eligible for the money.
Mr Guerini told newspaper Le Monde: “It would be a message addressed to the new generation, to tell them: ‘Do not give up, we believe in you!’ It would not be an ‘anti-crisis’ shield, but a real tool for freedom.”
The loan would be available “whatever your social origin” and would be “repayable over a very long period, 30 years”. Recipients would only be required to pay back the loan if “they achieve a certain level of revenue, which I suggest would be fixed at €1,800 gross per month”, said Mr Guerini.
“It is a zero-risk loan, because if you do not reach this revenue, you do not have to pay it back.”
Such an idea has already been supported by numerous opposition parties, with the Parti socialiste having already proposed the idea of “individual independence support aid” for young people.
In its proposal, the party suggested the creation of a non-means-tested monthly payment of €564 for young people over 18, as well as an extra credit of €5,000 to help with training, travel, or entrepreneurship.
Mr Guerini denied that the proposal was the equivalent of a “universal income”, as it would not be seen as an “allowance”, but “rests on a principle of responsibility, with reimbursable capital”.
Overall, he said that it would offer “€2-3billion to a young generation” for a “reasonable cost to public finances”, at “[just] €500 million per year” (a default rate of 20%), as suggested by figures in other countries that have similar systems in place, such as Sweden, Australia, and the UK.
The suggestion comes after the government has announced extra psychological and financial support measures for students, who have been significantly affected by the current health crisis.