PARIS: The French government said on Thursday employment was paramount as it unleashed a mammoth spending plan for the virus-hit economy that has been hemorrhaging jobs.
Prime Minister Jean Castex promised 160,000 new jobs in 2021 as part of a recovery plan worth 100 billion euros ($120 billion), designed to help growth and employment at a time when daily virus numbers in France are on the rise again.
“The ambition and size of this plan are historic,” he told reporters after a cabinet meeting backing the stimulus package which he said would help return the French economy to its pre-pandemic level by 2022.
The economy has experienced its worst downward spiral since 1945, with gross domestic product plunging 13.8 per cent in the second quarter, after a drop of more than five per cent in the first.
French companies will have shed an estimated 800,000 positions this year.
“Our absolute priority is jobs,” Castex said.
The budget boost, a combination of new spending and tax breaks, is four times the amount France spent over a decade ago to deal with the global financial crisis, and comes on top of hundreds of billions already spent in an early pandemic response.
“The time for a relaunch has come,” tweeted President Emmanuel Macron.
Some 40 billion euros of the plan will be covered by funds from a 750-billion-euro EU-wide plan agreed after much acrimony in July, and the rest by government debt, Castex said.
There will be no tax hikes to pay for the measures, he vowed.
Kathrin Muehlbronner, a vice president at rating agency Moody’s, said the “reasonably large” package at around 4.5 per cent of GDP would not change Moody’s view on France’s fiscal strength or credit profile.
The new stimulus is to go beyond the short term.
“This plan is not just designed to dress the wounds from the crisis,” Castex told Le Figaro daily.
“It lays the ground for the future,” he said, echoing Macron’s assertion that its emphasis on decarbonising the economy, improving corporate competitiveness and creating jobs would lay the ground for “the France of 2030”. — AFP
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