National recovery plan, taxes, subsidised contracts… Macron’s three economic priorities

"We can, once again, become a great industrial nation thanks to the environment," according to the French head of state. EPA-EFE/YOAN VALAT / POOL [EPA-EFE/YOAN VALAT / POOL]

In a Bastille Day interview with French media on Tuesday (14 July), President Emmanuel Macron detailed his economic orientation for the final two years of his five-year term. EURACTIV’s media partner Ouest-France reports.

A €100 billion recovery plan

Macron wants to revive the economy as soon as the school year starts, for which he has announced a plan “of at least €100 billion,” in addition to the €460 billion already allocated to deal with the coronavirus pandemic.

“We can once again become a great industrial nation, thanks to the environment,” said the French head of state. “We are going to put much more money so that households, especially the most modest, can renovate their homes and thus use less energy. The approach is both ecological and social,” Macron said.

According to the president, public buildings should also be refurbished in order to become more energy efficient.

“I want us to embark on a major programme to renovate our schools and our Ehpad (retirement homes), in conjunction with the communities,” the president said.

When it came to scrapping premiums for polluting vehicles, he was slightly more evasive, however. “I want a very broad programme that is much simpler still,” he said.

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No tax increase but…

The removal of the housing tax for the wealthiest appears not to be going ahead, however.

Four of five households no longer pay the housing tax, in accordance with the Macron campaign promise.

For the 20% that continue to pay it, i.e. the wealthiest, MPs voted at the end of 2019 to phase out this tax starting next year. But that prospect is fading away.

“One possible option is in the hands of the government,” said Macron, who added that “eliminating the housing tax for the wealthiest would have to be slightly postponed.”

This could just be enough to keep €8 billion in the government coffers, although this is almost a drop in the ocean compared to the hundreds of billions to be financed.

“But this effort is legitimate in times of crisis,” according to the president. And no other tax increase, including the restoration of the wealth tax (ISF), is being considered.

“The transformation of the wealth tax into a real estate tax has brought many investors back to France,” Macron said.

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The return of subsidised contracts for young people

France’s head of state also unveiled the outlines of a youth employment plan and announced “an exceptional system of exemption from charges for the employment of young people that receive the Smic [minimum wage] that goes up to €1,600.”

However, it is difficult to determine what this would cover, given that those getting minimum wage have very low social costs to cover. Would it be a credit for contributions, for instance? Stay tuned.

The French president is also reviving subsidised contracts, whose number has been considerably reduced since the start of his five-year mandate. Macron plans to finance 300,000 so-called “integration contracts”.

The number of civic service contracts will almost double given that it will increase by “100,000 within six months”. And 200,000 placements will be offered “in higher qualification training with social support”.

And pension reform? This is something the president appears to be postponing. “The priority for this summer and next autumn is employment,” he said.

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[Edited by Zoran Radosavljevic]

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