French crisis measures have cost 450 bln euros, finance minister says

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French government measures to prop up the economy through the coronavirus crisis have cost 450 billion euros ($490 billion), the equivalent of 20% of gross domestic product, the finance minister said on Monday.

Since mid March, the government has implemented a package of measures, including state-subsidised furloughs, state-guaranteed loans, tax deferrals and handouts to small businesses.

“If we take everything that has been done with the budget and in support of businesses’ cashflows, it’s 450 billion euros, 20% of the nation’s wealth on the table,” Finance Minister Bruno Le Maire said on BFM TV.

He added that state-guaranteed loans, for which a total 300 billion-euro limit has been set, only had a direct impact on the budget if the borrower went bankrupt and the guarantee had to be used.

So far, the government has budgeted 110 billion euro, in direct crisis support for the economy, but is due to update that figure with a bill revising the 2020 budget on June 10.

Among the most costly measures are the state-subsidised furloughs, which Le Maire said the government would make less generous for companies starting in June.

During the crisis, the state has fully reimbursed firms for 70% of the gross wages paid to furloughed employees, but Le Maire said that the amount paid to companies would be gradually reduced.

Sectors hit particularly hard by the coronavirus outbreak are to benefit from specific support plans. The government has already produced one for the tourism industry. One for carmakers is due on Tuesday and a third for aerospace is expected before the revised budget bill in June.

Le Maire said that President Emmanuel Macron would announce “strong measures” for carmakers that would boost demand, but which would require them to re-locate some production in France in exchange.

REUTERS