Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

France unleashes 100 billion euro stimulus to revive economy

EconomySep 03, 2020 07:51AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. People walk on the esplanade of La Defense in the financial and business district of La Defense, west of Paris

By Leigh Thomas

PARIS (Reuters) - France will spend 100 billion euros to help pull its economy out of one of Europe's worst coronavirus-induced slumps, under a recovery plan that revives pro-business reforms championed by President Emmanuel Macron with a greener tinge.

The $118 billion stimulus equates to 4% of gross domestic product, meaning France is ploughing more public cash into its economy as a percentage of GDP than any other big European country, an official said ahead of its formal launch later on Thursday.

France's recession, marked by a 13.8% second quarter GDP contraction that coincided with a COVID-19 lockdown and expected to generate an 11% drop in 2020 as a whole, has also been one of the region's deepest.

Focused mainly on boosting companies and running over two years, the stimulus package earmarks 35 billion euros to make the economy more competitive and 30 billion to promote greener energy policies.

The rest will go on supporting jobs, training and broader social initiatives.

"This recovery plan aims to keep our economy from collapsing and unemployment exploding," Prime Minister Jean Castex said on RTL radio.

He said the government aimed to create at least 160,000 jobs next year under the plan.

Macron is banking on the plan returning the euro zone's second biggest economy to pre-crisis levels of activity by 2022 - re-election year should he decide to run again - after what is expected to be its worst post-war recession.

However, it does little to directly support the traditional the engine of French growth, consumer demand. By contrast, neighbouring Germany launched a 130 billion euro stimulus in June with a cut in value added sales tax.

Instead, France is betting that, by supporting jobs, the plan will give consumers the confidence to start spending the 100 billion euros in extra savings that they built up during the two-month lockdown.

With already flagged cuts in business taxes worth 10 billion euros in both 2021 and 2022, its timeline would restore Macron's record on the economy while putting back on track a pro-business agenda that has foundered under a pushback by powerful unions and, latterly, the coronavirus crisis.


The new public funds are focused on the industrial, construction and transport sectors, all which suffered during one of Europe's strictest lockdowns.

Much of the new investment seeks to accelerate a transition away from fossil fuels, which Macron has made a priority since his ruling party suffered losses to environmentalists in municipal elections this year.

"It's good but this can't be limited to two years, we need to keep it up for 10 years," said lawmaker Mathieu Orphelin, who left Macron's party last year to set up a more environmentally focused party.

Rather than grand new projects, much of the new investment will go into the transport sector and the aging rail network specifically, while about 6 billion euros is slated for making public buildings and homes better insulated.

The hydrogen industry - used to store and transport energy created by wind turbines and solar panels - will get 2 billion euros over two years, a sector that Germany is also betting heavily on with plans to invest 9 billion euros by 2030.

($1 = 0.8455 euros)

France unleashes 100 billion euro stimulus to revive economy

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email