Paris (AFP)

The French government is now anticipating a brutal recession this year and doubling its emergency plan, faced with confinement that will last to stem the Covid-19 epidemic and a recovery that promises to be slow.

The government now plans that French gross domestic product (GDP) fall 6% this year, announced Thursday the Ministers of Economy Bruno Le Maire and Public Accounts Gérald Darmanin in an interview with Les Echos.

"This is the biggest recession in France since 1945," said Bruno Le Maire.

"Unknowns remain and this forecast may still evolve, particularly with regard to the duration of confinement and the terms of exit," he added.

This new forecast, far more pessimistic than that (-1%) of the rectified budget adopted at the end of March, will be incorporated into a new amending finance bill presented next week in the Council of Ministers and examined immediately in Parliament.

While the containment, which began on March 17, will be extended beyond April 15, each week of travel restrictions for the French has knock-on effects on the economy.

Most of the population cannot go to their place of work and certain companies see their activity slowing considerably, if not to stop by decision of the government, as in catering, entertainment or non-essential businesses.

"The economic impact, it is massive, it is very negative, it is brutal and it will cause in France as everywhere in the world an economic shock that everyone imagines but of which nobody knows yet the totality of the impact", had warned Prime Minister Edouard Philippe on Wednesday.

To confront this unprecedented health and economic crisis, the President of the Republic has given the watchword: the government will support businesses and employees "whatever the cost".

- Debt explosion -

Faced with the growing need for support from businesses, the government will more than double the 45 billion euros emergency plan announced last month.

It will increase to 100 billion euros, announced Bruno Le Maire, thus integrating more resources for partial unemployment - 20 billion instead of 8.5 billion initially provisioned - and the deferral of charges.

The solidarity fund created for very small businesses sees its endowment go from 1 to 6 billion euros, to meet the influx of demand and the relaxation of the conditions of allocation.

The urgency still being the health crisis, the envelope of "exceptional" expenditure for health passes it from 2 to 7 billion euros, to finance in particular the 4 billion euros of purchases of materials promised by Emmanuel Macron and the revaluation of the salaries of nursing staff.

The draft revised budget also provides for bonuses for nursing staff and certain civil servants, the amounts of which are still "in arbitration".

As a result of this recession and the strengthening of support measures, the public deficit will climb to 7.6% of GDP and the public debt will explode to 112% this year, warned the ministers.

"This debt meets an imperative: to avoid corporate bankruptcies and the sinking of our economy," defended Mr. Le Maire.

This rectified budget, devoted to the emergency, does not yet include measures to revive the economy, with a view to emerging from the crisis.

But Bercy is already working on the economic aspect of the deconfinement strategy that will be chosen.

The Minister of the Economy indicates that he has "started work with all the sectors" on "deconfinement methods for each of them".

However, he warns that the recovery will be "gradual", like what is happening in China. "The economic recovery will be long, difficult and costly," he insists.

Earlier Thursday, INSEE also estimated that the return of activity to its normal level "will take time".

© 2020 AFP