**This article is continuously updated with the latest developments.
To mark France’s Bastille Day on 14 July, President Emmanuel Macron announced a national recovery plan of “at least €100 billion”, which would focus mostly on unemployment.
In anticipation of “a massive increase in unemployment”, expected to be between 800,000 and one million, the French president announced that the national recovery plan will include a “long-term partial activity scheme” estimated at €30 billion.
Regarding the pandemic, he said he was in favour of “the compulsory wearing of masks in all enclosed public places” from 1 August.
“It is accelerating again. We have signs that it’s picking up a bit. We have to warn and prepare,” the president said, adding that France would be ready to deal with a second wave thanks to secure stocks of equipment and medicines.
In addition to the estimated €460 billion pumped into the economy since the coronavirus outbreak, France’s National Assembly voted on its third emergency budget to help the tourism, automotive and aeronautics industries with €45 billion in additional funding. However, the bill still needs to go through the Senate.
Meanwhile, state-owned rail company SNCF will now also benefit from government aid possibly in the form of “recapitalisation” or “the assumption of an additional part of the debt”., Transport Minister Jean-Baptiste Djebbari told French daily Le Figaro. .
In mid-June, SNCF CEO Jean-Pierre Farandou estimated that the loss of earnings amounted to about €5 billion, as it was heavily impacted by the strikes against pension reform and the COVID-19 health crisis.
Meanwhile, both Marisol Touraine and Roselyne Bachelot, former health minister under Francois Hollande and Nikolas Sarkozy respectively, were heard by the National Assembly on 1 July the day after a hearing with Agnès Buzyn.
The MPs asked them about the management of the crisis, especially about the lack of surgical and FFP2 masks. Both assured that the strategic stocks were sufficient when they were in office. Xavier Bertrand, who held office from 2005 to 2007 and from 2010 to 2012, will be interviewed today
This is part of a probe into the country’s management of the crisis. Possible charges including “manslaughter” and “endangering the lives of others,” Paris’ public prosecutor Rémy Heitz announced on 9 June.
This investigation is the first judicial response to complaints filed by victims’ relatives and professional organisations during the lockdown. The prosecutor’s office is also examining complaints made in a “petitioning process” based on standard complaints published on the plaintecovid.fr website.
As of Thursday (16 July), France recorded about 178,336 confirmed cases of COVID-19, which is 998 than the day before, as well as 30,172 deaths.
Relocating the health industry
French President Emmanuel Macron announced on Tuesday (16 June) during a visit to a Sanofi plant in the Rhône region that the government has plans to relocate the health industry.
While there are fewer new COVID-19 cases each day, President Macron announced on Tuesday the next steps to relocate plants in the health sector in France, speaking to reporters alongside the head of the Sanofi group which will create two French sites for vaccine research and production.
Following a visit to the Sanofi site at Marcy-l’Étoile, in the Rhône, the French president also promised to set up a “planning mechanism” for French production in the health sector by the summer, as well as a €200 million package to finance production infrastructure.
Recessions, rescue funds, and other economic measures
While the French lockdown has been successful in slowing the spread of the virus, it has had drastic impacts on the economy, as the country officially fell into a recession.
The French government expects the economic crisis to lead to the loss of 800,000 jobs, Economy Minister Bruno Le Maire told MPs in the National Assembly’s finance committee on 10 June, adding that the “shock is considerable.”
The minister went on to say that: “Our assessment is that we will have to cut 800,000 jobs in the coming months, that is to say, 2.8% of total employment.”
Together with Public Action and Accounts Minister Gérald Darmanin, Le Maire presented the third draft rectifying the finance bill presented earlier in the Council of Ministers, which expects the country’s GDP to contract by 11% this year.
Previous reports indicated that French GDP fell 5.8% during the first quarter of 2020, which only includes the first 15 days of the lockdown. This was the “the biggest drop” in the history of quarterly GDP estimates, which began in 1949, according to the French statistics agency.
Economist Eric Chaney also predicted that France will see a 15% contraction in economic activity in 2020’s second quarter, a decline which will weigh on the state’s tax resources, and send the budget deficit skyrocketing to 7% of GDP this year.
The French Observatory of Economic Conjunctures (OFCE) estimated that the country’s eight-week lockdown will result in a €120 billion loss for businesses.
Earlier, the government predicted that the country’s GDP will fall by 8% while its public deficit will skyrocket to 9% of GDP this year. Economy Minister Bruno Le Maire even told a hearing before the Senate’s economic affairs committee on 6 April that the country is likely to experience its worst year of economic recession since the end of World War II.
To counter the economic crisis, Le Maire detailed a government plan to support the economy worth €345 billion on 17 March. While €45 billion would go towards helping companies cancel or defer social security contributions, €300 billion would go towards securing bank loans to avoid any risk of bankruptcy, particularly of small and medium-sized enterprises (SMEs).
On 25 May, this extended to the healthcare sector, as the French government launched a broad consultation aimed at improving the working conditions and pay of healthcare staff, as well as patient care in hospitals. It follows a promise by President Emmanuel Macron, who at the end of March spoke of “a massive investment and upgrade plan” for hospitals.
Salary increases, working hours and hospital governance were among the issues discussed, with concrete responses expected by mid-July.
Find more of EURACTIV’s reporting on the French economy here:
- PARIS – Government proposes ‘catch-all’ COVID-19 emergency legislation
- COVID-19: France calls unemployed to work in the fields as borders remain closed
Ending the lockdown – a gradual deconfinement plan
After about two months of lockdown, France kickstarted its gradual deconfinement plan 11 May, which French Prime Minister Edouard Philippe announced on 28 April.
It outlined measures to reopen primary and nursery schools as of 11 May, colleges (ages 11-14) on 18 May, and high schools (ages 15-18) in June. It also stated that gatherings of up to ten people will be allowed and public transportation will reopen.
However, since the restrictions would only be loosened in territories with lower rates of infection, the plan essentially split the country in two. The regions of the Hauts de France, Ile-de-France, Grand Est and Bourgogne Franche-Comté, as well as Mayotte, underwent partial deconfinement given the continued spread of the virus there.
The PM later announced a series of measures to ease the containment as of 2 June. However, while beaches, parks and lakes opened, and businesses started operating in most of the country, cinemas, stadiums, sports clubs and discotheques are to remain closed until 21 June.
France’s deconfinement plan, which attempts to strike the difficult balance between maintaining protective measures and reviving the economy, has been criticised as risky from across the political spectrum including both the extreme right and left as well teachers and the CGT-FO, one of the country’s five major confederation unions.
More on the French coronavirus lockdown and deconfinement here:
- France won’t quarantine EU, Schengen-area citizens
- France lifts lid on gradual deconfinement plan
- France says coronavirus crisis easing, but far from over
- Macron extends lockdown until 11 May
- Domestic violence cases increase in France during COVID-19 lockdown
- ‘We are at war’: France postpones second round of elections, pension reform
- Coronavirus: Macron announces drastic measures in France
State aid and bailouts
On top of requesting economic measures to support the country’s workers, France’s industry has also sought bailouts to ensure it is protected from financial ruin as a result of the coronavirus crisis. However, these did have a few strings attached.
For instance, on 11 May, Economy Minister Bruno Le Maire warned that French car manufacturers will have to relocate their activities to France if they want support from the state.
“We are ready to help you, we are ready to improve conversion premiums for example. We are ready to look at what can improve your competitiveness on the French production site, in return, it must be the relocation you are considering,” said the French minister.
In a visit to a plant in Etaples (Pas-de-Calais), French President Emmanuel Macron made good on that promise. There, he announced a wide-reaching €8 billion plan, which includes increased subsidies for electric car purchases and encourages manufacturers to relocate their factories back to France.
The French government has already reached an agreement bailout automaker, Renault, to the tune of €5 billion, which was approved by Brussels in late April.
French rail is also on track to receive state aid, after suffering €2 billion in losses. SNCF CEO said that it will likely need government funding to stave off job cuts.
After receiving EU approval on 1 April, the French and Dutch governments have also bailed out Air France-KLM, receiving €10 billion in total. On the French side, Le Maire unveiled a €7 billion scheme for the carrier that includes a €4 billion state-backed bank loan and a €3 billion direct loan on 24 April.
However, the lack of strict conditions in the aid packages has already stoked criticism, particularly on the subject of the environment. Greenpeace’s Sarah Fayolle said that “we want to know exactly how Air France will make its green transition when there is absolutely no constraint, no sanction, and no ambition mentioned.”
More EU solidarity
Chancellor Angela Merkel and President Emmanuel Macron announced their joint proposal for a €500 billion European recovery programme following a virtual conference on 18 May. The initiative seeks to bring Europe out of the crisis “united and in solidarity,” and prepare the EU for future challenges
The Franco-German proposal is the latest in Macron’s calls for greater EU solidarity. In an interview with the Financial Times, he warned of the collapse of the EU as a “political project” unless richer states help Italy and others recover from the coronavirus pandemic.
Macron said that “there is no other option” than setting up a fund that “can issue mutual debt with a mutual guarantee” so that EU member states are funded according to their needs and not according to the size of their economy.
Ahead of the European Council summit on 23 April, a high-level source advocated for a €1,500 billion stimulus plan in a discussion with EURACTIV France, warning “we are not at all out of the health crisis.”
“We need an amount representing 10% of the European GDP. This is the amount that Germany has put on the table to support its economy, for the EU it is about €1,500 billion,” the source said, adding that “it’s no longer a question of being frugal or not. That’s not the point. The issue is to allow businesses and industries to continue to operate within ecosystems that they need.”
Increasing the health safety of its citizens
To ensure the health of French citizens is protected, the government adopted a few measures.
On 27 May, the French government’s contact-tracing app project was approved by the lower house of parliament, after Secretary of State for Digital, Cédric O defended its rollout.
When it comes to containing the virus at the workplace, the government also said it intends to convince companies to supply cloth face masks to their employees rather than rely on imported surgical ones, despite the “overcapacity,” which some French industrialists who have converted to mask manufacturing have pointed to.
While about 450 French companies converted to mask manufacturing during the coronavirus health crisis, sometimes at the cost of additional investment, only “10% of companies have stocks” today, Secretary of State for the Economy and Finance, Agnès Pannier-Runacher, told radio network RTL on 8 June.
Earlier, in mid-April, Amazon was asked by a court in Nanterre, near Paris, to restrict its deliveries to essential goods only until an assessment of the pandemic risks can be carried out. “The company obviously its obligations to the security and health of its workers,” the court held.
The trade union that filed the complaint said Amazon was continuing to work during the pandemic “as if nothing was happening” and decried the situation in the warehouses as a “sanitary and social bomb.”
On 14 May, French President Emmanuel Macron announced he would clear the air regarding the controversy surrounding a COVID-19 vaccine and meet Sanofi company officials the following week.
Earlier, Sanofi’s Chief Executive Officer Paul Hudson had suggested – to the dismay of the French and Europeans – that if the French pharmaceutical giant were able to successfully develop a COVID-19 vaccine, the US may obtain the first shipment before the rest of the world.
Company officials later rolled back their statements, calling it a misunderstanding.
A vaccine must be a “common good” that stands “outside of market rules,” an official at the Elysée palace said on 14 May. “Equal access to this vaccine for all is not negotiable,” PM Philippe said on Twitter.
— Edouard Philippe (@EPhilippe_LH) May 14, 2020
- France says virus exacerbating global diplomatic rift
- France calls for urgent EU help for crisis-ridden farming sector
- France, Germany join group of 10 EU countries calling for green recovery
- France wants EU to win virus communications battle