ANALYSIS
The French economy is going through its worst crisis since the end of the Second World War. The country officially entered a recession, with a historic drop in GDP (gross domestic product) of 6% between January and March, due to the coronavirus pandemic. This figure, published Wednesday by the Bank of France, testifies to the brutal losses of activity in particular in the sectors of construction, trade, transport, accommodation and catering.
Nicolas Barré, editorial director of Les Echos and editorialist on Europe 1, analyzed this unprecedented situation on Wednesday on Europe 1. "We are going to erase twenty years of economic growth. There will be a sharp rise in unemployment and a very significant social impact ", he worries. "Concretely, an economy in recession shrinks and wealth per capita decreases. With the projections that we have, we will erase about twenty years of economic growth, income per capita will decrease due to this crisis. have a strong rise in unemployment and a very significant social impact worldwide, and in Europe in particular. "
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How long can it last?
"Some companies are completely shut down: 550,000 have asked to appeal for short-time working (or nearly 6 million employees, note ). This gives you an idea of the magnitude of this crisis. The problem is that many of these companies will have a hard time restarting. We can spend a few weeks at a standstill, but not months in this situation. The big risk is that a large part of the economic fabric will disappear and that we will witness a sharp rise in bankruptcies. This is what is expected for the future. "
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Will the State be able to continue borrowing?
"The state is going into considerable debt. Short-time working costs around 200 million euros a day, or 20 billion euros over three months. It cannot go on forever. The Central Bank European is now behind the state, so when we go into debt the ECB comes to supplement and keeps rates low. But this situation cannot last very long. "
What about the real estate market?
"At the time of the confinement, there were 100,000 real estate transactions per day. 80% of the signatures are postponed, and many people give up. Today there is no more market, and therefore no more price which means anything There are almost no more visits, but we can expect a sharp drop in prices after this crisis. The market is sort of suspended, we do not know what it will give. What we observe is that a certain number of buyers give up to bet on a fall in prices. "
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When will there be a return to normal? In six months, a year, two years?
"There will not really be a return to normalcy. Businesses will disappear, capacities will vanish. On Tuesday, the large German airline Lufthansa said they will never return to pre- They have put an end to 20% of their fleet, they are deleting half of their A380s. The boss of Lufthansa said that the company in a year or two will be smaller. We are at the mercy of a second wave of the epidemic, and therefore of a long period of great difficulty for one or two years. There will be no question of returning to normal. "
Will tomorrow's economy look like yesterday's?
"Probably not. The big risk is that industrial sectors, such as the automobile and chemicals, may disappear in favor of other players in other parts of the world who could take these markets. There is a risk of permanent loss of economic substance. This is absolutely what should be avoided. "