Thursday, 02 December, 2021

Coronavirus: Macron promises a stimulus plan and puts budgetary seriousness on hold


The head of state announced on Thursday that he would take all necessary measures to counter the spread of the virus, “whatever the cost”. The budgetary objectives are therefore set aside, especially since it has promised a “French and European recovery plan” to manage the economic consequences, without specifying amounts. He judged the decisions of the ECB “not sufficient”.

It was his Draghi moment. During his speech this Thursday at the Elysee Palace, Emmanuel Macron repeated the expression three times “Whatever the cost” when he spoke of the measures to be taken to counter the spread of the coronavirus. A transparent reference to “whatever it takes” launched in the summer of 2012 by Mario Draghi, then President of the ECB, an expression heralding the unconventional measures of the central bank which made it possible to save the euro.

Read also:

Coronavirus: Macron resolves to shock measures to “protect the French”

Emmanuel Macron also wants to get out of conventional ways to deal with the coronavirus crisis, and this will notably involve putting budgetary orthodoxy on hold. The objective of a deficit of 2.2% of GDP at the end of the year is now officially obsolete, to manage both the health response and the economic response. In terms of health, the government will use “All the financial means necessary to provide assistance and to save lives”, explained the Head of State when he spoke of support for hospitals and nursing staff. He also promised “Exceptional measures for the most vulnerable”. The issue of unemployment insurance is particularly on the table.

Protect employees

On the economic plan, “Everything will be done to protect employees and businesses”. Strengthening the partial unemployment system should cost at least several hundred million euros, Bruno Le Maire, the Minister of the Economy and Finance, warned earlier today. To this must be added the suspension of contributions and taxes due in March, with eventually cancellation measures, which will have a budgetary impact.

Read also:

Coronavirus: Macron announces the closure of all schools and universities

Finally, Emmanuel Macron announced that he had “Asked the government to prepare now a national and European recovery plan consistent with our priorities and our commitments for France”. Paris has been campaigning for several days in Brussels with varying fortunes for action at the European level, but the Head of State is now talking about a specifically French plan. In this, he joins an approach adopted in recent days by Italy (which mentioned 25 billion euros in additional credits) and Great Britain (30 billion in all, including 12 billion specifically focused on the coronavirus).

Emmanuel Macron, however, was careful not to mention specific amounts for this recovery plan. “We will react strongly, we will react quickly”, promised the head of state, calling on Europe to take action “Organized, massive”.

Read also:

DOSSIER France and the coronavirus epidemic

Macron judges the ECB’s decisions “not sufficient”

It is rare for a French politician to openly criticize a decision of the European Central Bank (ECB). Emmanuel Macron however expressed this Thursday a certain reserve on the announcements made a little earlier in the day by Christine Lagarde, the new president of the ECB. “ We must also bring a European response. The central bank has already announced its first decisions today. Will they be sufficient? I do not believe that “, he explained.

Expected at the turn, the ECB announced that it was keeping its key rates unchanged, while its American and British counterparts both opted a few days earlier for cuts. However, the institution launched on Thursday a massive loan program to support the SMEs most affected by the coronavirus epidemic and intends to buy 120 billion euros of additional public and private debt by the end of the year.

However, this did not slow the fall of the markets on Thursday.

The head of state announced on Thursday that he would take all necessary measures to counter the spread of the virus, “whatever the cost”. The budgetary objectives are therefore set aside, especially since it has promised a “French and European recovery plan” to manage the economic consequences, without specifying amounts. He judged the decisions of the ECB “not sufficient”.

It was his Draghi moment. During his speech this Thursday at the Elysee Palace, Emmanuel Macron repeated the expression three times “Whatever the cost” when he spoke of the measures to be taken to counter the spread of the coronavirus. A transparent reference to “whatever it takes” launched in the summer of 2012 by Mario Draghi, then President of the ECB, an expression heralding the unconventional measures of the central bank which made it possible to save the euro.

Read also:

Coronavirus: Macron resolves to shock measures to “protect the French”

Emmanuel Macron also wants to get out of conventional ways to deal with the coronavirus crisis, and this will notably involve putting budgetary orthodoxy on hold. The objective of a deficit of 2.2% of GDP at the end of the year is now officially obsolete, to manage both the health response and the economic response. In terms of health, the government will use “All the financial means necessary to provide assistance and to save lives”, explained the Head of State when he spoke of support for hospitals and nursing staff. He also promised “Exceptional measures for the most vulnerable”. The issue of unemployment insurance is particularly on the table.

Protect employees

On the economic plan, “Everything will be done to protect employees and businesses”. Strengthening the partial unemployment system should cost at least several hundred million euros, Bruno Le Maire, the Minister of the Economy and Finance, warned earlier today. To this must be added the suspension of contributions and taxes due in March, with eventually cancellation measures, which will have a budgetary impact.

Read also:

Coronavirus: Macron announces the closure of all schools and universities

Finally, Emmanuel Macron announced that he had “Asked the government to prepare now a national and European recovery plan consistent with our priorities and our commitments for France”. Paris has been campaigning for several days in Brussels with varying fortunes for action at the European level, but the Head of State is now talking about a specifically French plan. In this, he joins an approach adopted in recent days by Italy (which mentioned 25 billion euros in additional credits) and Great Britain (30 billion in all, including 12 billion specifically focused on the coronavirus).

Emmanuel Macron, however, was careful not to mention specific amounts for this recovery plan. “We will react strongly, we will react quickly”, promised the head of state, calling on Europe to take action “Organized, massive”.

Read also:

DOSSIER France and the coronavirus epidemic

Macron judges the ECB’s decisions “not sufficient”

It is rare for a French politician to openly criticize a decision of the European Central Bank (ECB). Emmanuel Macron however expressed this Thursday a certain reserve on the announcements made a little earlier in the day by Christine Lagarde, the new president of the ECB. “ We must also bring a European response. The central bank has already announced its first decisions today. Will they be sufficient? I do not believe that “, he explained.

Expected at the turn, the ECB announced that it was keeping its key rates unchanged, while its American and British counterparts both opted a few days earlier for cuts. However, the institution launched on Thursday a massive loan program to support the SMEs most affected by the coronavirus epidemic and intends to buy 120 billion euros of additional public and private debt by the end of the year.

However, this did not slow the fall of the markets on Thursday.