The Ministry of Finance in Paris, April 8, 2020. - BERTRAND GUAY / AFP
The government plans to mobilize 40 billion euros to support sectors in difficulty. To mobilize these funds, he will present a third draft amending budget to the Council of Ministers next week, the Ministry of Economy and Finance announced on Thursday.
This new amending finance bill (PLFR) is made necessary by a worsening of the recession, with a fall in gross domestic product (GDP) of 11%, a deficit which will widen to 11.4% of GDP and a public debt that will swell to 120.9%, detailed the ministry during a telephone press point.
Budget measures and loan guarantees
After the emergency plan of more than 110 billion euros already released since the start of the crisis, the government has decided this time to support several sectors particularly affected by containment, such as the automobile, tourism or aeronautics . These 40 billion euros include both budgetary measures and measures to support corporate cash flow, for example via loan guarantees.
If he has already mobilized 18 billion for tourism and 8 billion for the automobile, the Minister of Economy must unveil on Friday a plan for the technology sector, before that for aeronautics next week as well as measures on small business. "The important thing for us is growth, the return of growth and not losing human capital or physical capital, through bankruptcies or layoffs", we defend in Bercy to justify these impressive figures on the crisis that the French economy is going through after eight weeks of confinement.
Declining global demand
In total, this draft budget will include 13 billion euros in budgetary appropriations and 12 billion euros in additional public guarantees. Despite the recovery manifested since the deconfinement on May 11, the government anticipates in particular a 10% drop in consumption, 19% in investment and the creation by households of precautionary savings of around 100 billion. euros.
The difficulties in the tourism sector alone will weigh "almost 1 point" on GDP this year, according to Bercy. In terms of foreign trade, the government forecasts a 12% drop in global demand for France. Faced with this drop in activity, the revenues from compulsory levies (contributions, VAT, company tax, etc.) are further revised down by 27 billion euros compared to the previous rectified budget adopted in April.
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