GettyImages-1212614036 Digital generated image of financial line chart showing fallings because of coronavirus COVID-19 on blue background.
In his television interview on 14 July, the President of the Republic outlined its outlines. Twenty-four hours later, for his first major speech to the National Assembly and then the Senate on Thursday, the new Prime Minister, Jean Castex, unveiled much of the future economic recovery plan.
Not a shadow of a hesitation on the way forward: it will be that of “the fight against unemployment and the preservation of employment, a top priority in the next eighteen months” assures the new tenant of Matignon, who is aware that by spring 2021, the French economy could destroy up to 1 million additional jobs.
Faced with this gloomy forecast, Jean Castex intends to assign to the recovery plan the ambition to “recreate the conditions for more robust, innovative, greener and more inclusive economic growth”. But how can we tackle all these projects at once and reconcile what many already consider irreconcilable: economic, social and environmental efficiency?
The three blocks of the future recovery plan – employment and skills (block 1), industry and territories (block 2) and ecological transition (block 3) provide the first elements of response to the underlying political intent. If we are a little fussy, we can point out that of the 100 billion, ecological ambition collects in total only one fifth of the budgetary effort, mainly dedicated to the thermal renovation of buildings, the emission reductions of territories and industries, more local and sustainable food production and the support that will be provided to green technologies (starting with the new battery chain). A trifle of 20 billion all the same!
The ambition to preserve employment and the social ulterior motive that drives it (limiting the break on the front of unemployment and its consequences in terms of precariousness) obtains wider financial support, with a package of almost 40 billion largely swallowed up by the long-term partial activity scheme (30 billion), with the balance of planned spending going to support employment and wages in the most affected sectors (8 billion) and vocational training (1.5 billion), which had already been the subject of an ambitious plan since the beginning of Emmanuel Macron’s five-year term in 2017.
But it is certainly the “economic and territorial reconquest” component that will mobilize the heaviest resources. $40 billion in total to accelerate the “transformation of the productive apparatus” and support investments by local authorities, particularly focused on sustainable development, land use planning, including urban renewal.
For Jean Castex’s first Policy Statement leaves no room for doubt on a central point: the State has become aware of the terrible failures of its productive system during the crisis and its inability to “provide for our needs for strategic goods and resources”. An admission of weakness that justifies the considerable means that will be put on the table to regain economic sovereignty so indispensable, even if it means going to Brussels to fight to adapt the rules of European competition, in order to bring out new European industrial champions. An admission of failure which also explains that the government is finally yielding to the already long-standing demands of employers’ organizations, MEDEF in the lead, in favour of a reduction in production taxes. In this area, however, we will still be quite far from the account since the Minister of Economy, Finance and Relaunch, Bruno Le Maire, announced to the microphone of France 2 that it is 20 billion taxes (half in 2021 and the other the following year) that will be abolished, but on a tax package that represents 3.5 times this amount. A first step, then. Just a first step…
In the third part of the recovery plan, it is the economy that is taking the lion’s share, with expenditures that can be described as investment in the future if they actually lead to modernising our productive apparatus (accelerating the digitization of companies, etc.). The “solidarity” component ranks second, while ecological ambitions are relegated to third place in terms of budgetary mass.