According to an estimate published Wednesday April 8 by the Bank of France, the French gross domestic product (GDP) plunged of approximately 6% in the first quarter of 2020. It is the worst quarterly performance of the French economy since 1945. The economy contracted 5.3% in the second quarter of 1968 at the time of the demonstrations.

According to the latest data from the National Institute of Statistics and Economic Studies (Insee), France is therefore technically in a recession, with the GDP having already declined by 0.1% in the fourth quarter of 2019.

In particular, activity was around one-third (-32%) lower than normal over the last fortnight in March, according to the Banque de France's assessment, based on a survey of 8,500 companies, carried out from March 27 to April 3.

Industrial capacity at its lowest

It shows that the use of industrial capacity fell on average to an all-time low of 56% in March, against 78% the previous month, and declined to 41% for the automotive sector.

In line with INSEE estimates, the French central bank estimates that each fortnight of confinement results in a 1.5% drop in GDP over a year. But she warns that this figure "should not be extrapolated improperly", the intensity of the effects of confinement may change as it lengthens.

Begun on March 17, the confinement of the French must last at least until April 15.

Failure of an economic solution within the Eurogroup

In addition, the European Ministers of Finance did not manage to agree Wednesday, after an entire night of discussions, on a common economic response to the coronavirus.

"After sixteen hours of discussions, we have approached an agreement, but we are not there yet. I suspended the Eurogroup", which will continue "tomorrow, Thursday", announced on Twitter Mario Centeno, the President of the Eurogroup.

Faced with the pandemic, the European response initially seemed to win the support of the ministers: up to 240 billion euros in loans from the euro zone rescue fund, a guarantee fund for businesses and support for short-time working.

But the countries most affected by the virus, in particular Italy, but also Spain, France, Greece, Malta, Luxembourg and Ireland, continue to demand, in addition, the creation of an instrument common debt, in the form of eurobonds or "eurobonds", intended to revive the economy in the long term, once the crisis is over.

With AFP and Reuters

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