Government more than doubled the cost to 100 billion euros last Thursday, but extending a national lockout means the amount has already been exceeded and the new revision shows how the bailout costs of the economy are rising sharply.
“We are around 110 billion (euros),” a finance ministry source told Reuters. A second source from the Ministry of Finance confirmed the amount.
Almost half of the package consists of deferred corporate taxes and payroll taxes and the rest include cash payments for small businesses on the brink of collapse, state-subsidized leave and funds intended for the recapitalization of large groups struggling to survive the crisis.
French President Emmanuel Macron said on Monday that a national lockdown that was to last until Tuesday would be extended until at least May 11, making the government’s economic and financial prospects outdated.
Finance Minister Bruno Le Maire said the extension meant that a budget update to be presented on Wednesday would now include a forecast that the economy should contract by 8% this year instead of -6% estimated last Thursday.
The extension will put additional pressure on public finances, with a loss of tax revenue now budgeted at 43 billion euros compared to 37 billion euros last Thursday.
The Mayor also said the extension meant that the state-subsidized leave program should now cost 24 billion euros, up from 20 billion last week.
As a result, the overall French public sector budget deficit is expected to reach a post-war record of 9% of GDP this year, said Minister of Budget Gerald Darmanin, three times the usual ceiling for the countries of the European Union.
($ 1 = 0.9120 euros) (Report by Leigh Thomas; Editing by Catherine Evans)