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Coronavirus: France to unveil €100 billion stimulus plan to kickstart sick economy

The French government will on Thursday unveil a €100 billion stimulus package to kickstart its economy hit hard by the global COVID-19 health crisis.

Prime Minister Jean Castex is to outline the government’s “Plan de Relance” (Revival Plan) during a press conference at 13:00 CET.

French President Emmanuel Macron said in late August that the package is “particularly ambitious” and that it is “among the most important in Europe in terms of GDP (Gross Domestic Product)”.

He also said that it will allow “companies to breathe a little, to invest more, and to be more competitive” thanks, in part, to a €20 billion reduction in taxes.

The government will also allocate €40 billion to support domestic industry and services, €30 billion to the energy transition, €15 billion to boost innovation and the relocation of “strategic technologies”.

“The future of hydrogen, recycling, quantum, the future of the green, circular and decarbonated economy must, with this plan, be written in France,” Macron added.

Ahead of the presser, Castex told RTL radio on Thursday morning that the “a gift to France to revive the economy and fight unemployment. It’s the plan’s main objective.”

“I hope that the revival plan will in 2021 create 160,000 jobs,” he added.

Growth in France contracted by a massive 13.8 per cent in the second quarter. The economy had already shrunk by 5.8 per cent,la%20s%C3%A9rie%20trimestrielle%2C%20depuis%201949) in the first three months of the year.

The Bank of France estimates that GDP will contract 10.3 per cent this year because of the COVID-19 pandemic and its impact on the economy. It expects the economy to rebound by nearly seven per cent and four per cent in 2021 and 2022 respectively.

“This apparent strong rebound will not allow activity to return to levels observed at the end of 2019 until mid-2022. 2021 and 2022 would therefore be years if clear but gradual recovery,” the Bank stressed.

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