France unveils €100bn plan to 'reboot' economy after coronavirus

3 September 2020, 16:39 | Updated: 3 September 2020, 18:52

The €100bn (£89bn) 'reboot' plan seeks to pull France from its biggest economic slump since the Second World War
The €100bn (£89bn) 'reboot' plan seeks to pull France from its biggest economic slump since the Second World War. Picture: PA
Rachael Kennedy

By Rachael Kennedy

France has unveiled a €100bn (£89bn) recovery plan to pull the country out of the enormous economic slump caused by coronavirus.

Named "France Reboot," around a third of the cash will go to supporting businesses, another third for jobs and societal measures, and the final third for reducing emissions and protecting biodiversity.

This will include ensuring that French factories are given contracts to manufacture medical supplies, developing hydrogen energy, helping museums and cinemas, providing job training, and hiring more people at unemployment offices.

READ MORE: France to impose mandatory quarantine on travellers from UK 'within days'

Revealing the plan, prime minister Jean Castex said the recovery marked an "important step" in the the fight to pull the country out of the biggest economic crisis since the Second World War.

"France held on, but it is incontestably weakened," he said, adding it must now try to escape "an extremely sudden and brutal recession".

The French government has already spent hundreds of billions of euros in emergency aid to respond to the rapid spread of COVID-19, which prompted a two-month lockdown and significantly slowed the economy - shrinking it by 13.8% in the second quarter.

It has also killed more than 30,600 people, meaning France has one of the highest death tolls to coronavirus in Europe, behind the UK and Italy.

Part of the newly-announced recovery plan will be covered by €40bn (£35.6bn) of aid from a European Union-wide scheme - although Mr Castex there is no plan to increase taxes to pay for the remaining sum.

He said new treasury bonds would be issued instead.

France is currently seeing a resurgence in COVID-19 cases as people return from their summer holidays, and has reported more than 7,000 new infections on Thursday - the highest daily rate in Europe.

This is also a large increase compared to the hundreds of daily cases reported back in May and June.

Cases admitted to intensive care are also rising - but this is not at the level seen in the peak of the pandemic in March and April.

Despite these rising figures, France has reopened schools this week and has encouraged people to return to work, insisting now is the time to consider a future after COVID-19.

The reboot plan is therefore aiming to create 160,000 jobs in the next year and to restore the 2019 GDP level by 2022, in time for the next presidential election.

"It's ambitious but perfectly within our reach," Mr Castex said.

READ MORE: France sees 'exponential' rise in coronavirus cases with 7,000 in a single day

French President Emmanuel Macron, who will be coming to the end of his first term in 2022, has been criticised for not living up to his promises of fighting climate change, and critics have said the recovery plan will not be enough to compare to European neighbours on this topic.

Others have said the cash many not stop French businesses from being forced to declare bankruptcy, or announcing mass layoffs in the near future.