Emmanuel Macron’s government unveiled the long-awaited ^100 billion ($118 billion) stimulus plan the French president is betting on to transform the economy and his political fortunes with less than two years to go until elections.
The plan, dubbed “France Relaunch,” includes wage subsidies, tax cuts for businesses and funding for environmental projects. It aims to shift away from the emergency spending of the Covid crisis to addressing longer term problems of weak investment and job creation in the euro area’s second largest economy.
The fiscal reboot —much of which was announced over the summer — will be spread over two years and is split in roughly equal parts between competitiveness, jobs and social policies, and financing the transition to a greener economy.
“This stimulus plan aims to stop our economy collapsing and stop unemployment shooting up,” Prime Minister Jean Castex said on RTL radio. “It has an immediate target, but also a structural and long-term target that is part of the logic of reform and transformation of the presidency.”
It’s a high-stakes political move for Macron amid signs the rebound from the virus slump is fading, and the risk of rising unemployment.
Looming over the grim outlook are presidential elections in April 2022, leaving the president no time for another shot at a defining policy transformation before he faces voters. Governments across Europe are planning additional stimulus as the coronavirus continues to hammer economies.