The French government gave new indications on Wednesday on the contents of its 100 billion euros (118 billion dollars) plan to revive the economy as it seeks to reassure the country whose situation is under control.
The measures will include 2 billion euros for the cultural sector, Prime Minister Jean Castex said in an interview with France Inter radio. Originally slated for earlier this week, full details of the stimulus package will be announced on September 3, he added.
France is loosening the purse strings to get the economy back on its feet after months of efforts to stop the progression of the Covid-19 epidemic. A nationwide lockdown that began in March choked the virus but also sent the economy into its worst plunge on record. The government expects wealth production to contract by 11% this year, but as infections rise in France and Europe, uncertainty remains high.
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Asked about funding for the plan, Castex said there would be no tax hikes and pointed to the European Union’s stimulus package. Partly on the basis of shared debt, France will receive around 40 billion euros from the EU, ithe told me.
The prime minister said last month that French industry would receive 40 billion euros in aid, which President Emmanuel Macron said would provide an opportunity to build a greener economy.
Castex also said the government will spend € 30 billion this year and an additional € 8 billion in 2021 on leave plans to support jobs and wages in companies suffering from a sustained decline in the order book. More than 20 billion will be spent on building insulation, reducing emissions, local and sustainable food production and supporting green technologies.
Castex said on Wednesday that the government wanted to reassure the French about its handling of the health situation before unveiling more economic measures. These will mark “continuity” with the emergency measures already taken, such as unemployment benefits, tax cuts and loans granted by the State to the companies concerned. Macron said the total envelope would amount to 460 billion euros.
France and neighboring countries are trying to limit infections when people return from vacation, attend summer gatherings and prepare to return to school and workplaces. As authorities tighten local restrictions in some areas, the government is reluctant to resort to the drastic measures imposed during the initial peak of the pandemic in March and April.
The cultural sector has been hit particularly hard by the crisis, and Castex said gatherings of more than 5,000 people would be banned in areas with high virus circulation and some events could be canceled.