France to release $49 billion in economic stimulus next year

Business

Diners eat lunch before the closure of restaurants and bars, in Marseille, southern France, Sunday Sept. 27, 2020. As restaurants and bars in Marseille prepared Sunday to shut down for a week as part of scattered new French virus restrictions, Health Minister Olivier Veran insisted that the country plans no fresh lockdowns. (AP Photo/Daniel Cole)

PARIS (AP) — France’s government presented its 2021 budget on Monday, a plan that aims to rescue the country’s beleaguered economy from the impact of the coronavirus pandemic by injecting a 42 billion-euro ($49 billion) stimulus next year.

Finance Minister Bruno Le Maire said “we are convinced that France can recover, and quickly recover,” following a Cabinet meeting.

France’s economy is expected to shrunk 10% this year, in its worst recession since World War II. Earlier this month, French President Emmanuel Macron’s centrist government unveiled a 100 billion-euro ($117 billion) recovery plan aimed at creating jobs and saving struggling businesses.

“By the end of 2021, we want to release 42 billion euros of these funds, so nearly half of it, in order to have quick economic results,” Le Maire said.

The government hopes the economy will grow 8% next year, boosted by the recovery plan.

The massive plan includes money to bring back the manufacturing of medical supplies to French factories, develop hydrogen energy, help museums and the cinema industry, train young people for 21st century jobs and hire more staff at unemployment offices.

Spending money to save jobs and businesses “is a good investment,” Le Maire argued.

France’s public debt is expected to surge from less than 100% of gross domestic product last year to 117.5% this year, according to the government’s forecasts.

Le Maire vowed that “the debt will be repaid” through recovered growth, cuts in public spending and major reforms including changes to the country’s pension system.

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