Thursday, 20 January, 2022

Coronavirus: the executive further degrades the budget forecasts after the announcements of Emmanuel Macron


The government now expects economic activity to decline by 8% in 2020, a public deficit of 9% and a debt of 115% of GDP, consequences of the announcements made by Emmanuel Macron on Monday evening. Just five days ago, he predicted a 6% recession, a 7.6% deficit and 112% debt. The emergency plan is revised from 100 to 110 billion.

Bruno Le Maire, the Minister of the Economy and Finance, and Gérald Darmanin, the Minister of Action and Public Accounts, (here in September 2019) swear that the government will not resort to tax increases to compensate the budget hole.

Barely five days to completely review his copy. While the government unveiled last Thursday the outlines of an amending finance bill made necessary by the magnitude of the coronavirus crisis, the executive is already obliged to completely change the budget forecasts. The government now expects economic activity to decline by 8% (it was 6% last Thursday), a deficit of 9% of GDP (7.6% previously) and a debt of 115% of GDP (112% last week). The announcement was made this Tuesday morning by the Minister of Public Accounts, Gérald Darmanin, on France Info, and by the Minister of the Economy, Bruno Le Maire, on RMC.

If the speed with which the executive reviews its copy may be surprising, this was nevertheless inevitable after the announcements made by Emmanuel Macron on Monday evening. The head of state explained that the confinement would last at least until May 11, or 8 weeks in total. However, last week’s budget adjustment was based on a period of 6 weeks. The paralysis of the economy will therefore last longer than expected, hence an even lower growth forecast. “Every day only worsens the economic crisis”, underlined Gérald Darmanin.

The fall in state revenues has also been revised upwards. Tax revenues are now estimated to be 43 billion euros lower compared to the budget forecast.

Read also:

Macron promises gradual deconfinement from May 11

Heavy bill

This prolonged confinement will also increase the bill for the emergency plan wanted by the executive to deal with the economic consequences of the coronavirus crisis. Gérald Darmanin announced that its amount was now estimated at 110 billion, against 100 billion last week and 45 billion three weeks ago. Bruno Le Maire has already warned: “If at some point we have to do more, we will do more”.

In detail, the partial unemployment scheme is now estimated at 24 billion euros (20 billion last week), and the Minister of the Economy has opened the possibility of its extension beyond May 11, for sectors who could not restart their activity. As for the solidarity fund for the self-employed, it could be improved. Its budget will increase to 7 billion euros and the contribution of insurers from 200 to 400 million euros. A proposal will be made to the Prime Minister on Tuesday to complete this fund, according to Bruno Le Maire. It will also be necessary to integrate exceptional assistance for low-income families, the cost of which is not yet known.

Read also:

Up to 1,250 euros of additional aid for craftsmen and traders

Cancellation of charges for hotels and restaurants

The discourse of Bercy tenants is also changing on the subject of the cancellation of tax and social charges. So far, Bruno Le Maire indicated that the charges would be postponed and canceled ” case by case “ for companies in difficulty. This Tuesday morning, he explicitly opened the way for a cancellation for certain sectors. “From the moment you do not find any turnover, the postponement may turn into cancellation”, he said. Gérald Darmanin specified that his teams were working on a cancellation for the hotel and catering industry “Which were closed at the request of the government” even if constitutional problems of equality before the tax will have to be removed.

All these figures are completely unseen in the history of modern France. For the record, in 2009, after the great financial crisis, activity had declined, but “only” by 2.9%. As for the public deficit, this will also be by far the largest since the end of the Second World War: the two previous records dated from the recession of 1993 (6.4% of GDP) and the financial crisis of 2009. (7.2%). As for the debt, it was already higher in the 20th century, but only after the end of the two world conflicts.

Read also:

ANALYSIS The crisis that takes us back twenty years

“Indicative” figures

However, records are made to be broken and Gérald Darmanin warned on Tuesday that the new budget forecasts were “Indicative”. “We do not yet know exactly how we are going to deconfin”, specified the Minister of Public Accounts. On the other hand, he ruled out resorting to the fiscal weapon to finance this yawning budget hole. “The solution cannot be in tax increases”, he assured.

—————

>>> France facing the coronavirus epidemic. What were the different stages of the alert? What is the day-to-day epidemiological situation? What measures has the government decided to take to limit the spread of the pandemic? To support the economy? Answers here in the special “Echoes” file.

Read also:

LIVE Update on the situation in France and around the world this Tuesday, April 14

OUR SELECTION OF ARTICLES ON CORONAVIRUS:

SURVEY

All the results and instructions for use of the CoviDirect daily rolling

TESTIMONIALS

Caregivers facing the coronavirus

Bosses tell each other at the time of confinement

DECRYPTAGES

All our CQFD decryption on the coronavirus and the economic crisis

PRACTICE

Containment: outings, races and certification … what is authorized and what is not

The government now expects economic activity to decline by 8% in 2020, a public deficit of 9% and a debt of 115% of GDP, consequences of the announcements made by Emmanuel Macron on Monday evening. Just five days ago, he predicted a 6% recession, a 7.6% deficit and 112% debt. The emergency plan is revised from 100 to 110 billion.

Bruno Le Maire, the Minister of the Economy and Finance, and Gérald Darmanin, the Minister of Action and Public Accounts, (here in September 2019) swear that the government will not resort to tax increases to compensate the budget hole.

Barely five days to completely review his copy. While the government unveiled last Thursday the outlines of an amending finance bill made necessary by the magnitude of the coronavirus crisis, the executive is already obliged to completely change the budget forecasts. The government now expects economic activity to decline by 8% (it was 6% last Thursday), a deficit of 9% of GDP (7.6% previously) and a debt of 115% of GDP (112% last week). The announcement was made this Tuesday morning by the Minister of Public Accounts, Gérald Darmanin, on France Info, and by the Minister of the Economy, Bruno Le Maire, on RMC.

If the speed with which the executive reviews its copy may be surprising, this was nevertheless inevitable after the announcements made by Emmanuel Macron on Monday evening. The head of state explained that the confinement would last at least until May 11, or 8 weeks in total. However, last week’s budget adjustment was based on a period of 6 weeks. The paralysis of the economy will therefore last longer than expected, hence an even lower growth forecast. “Every day only worsens the economic crisis”, underlined Gérald Darmanin.

The fall in state revenues has also been revised upwards. Tax revenues are now estimated to be 43 billion euros lower compared to the budget forecast.

Read also:

Macron promises gradual deconfinement from May 11

Heavy bill

This prolonged confinement will also increase the bill for the emergency plan wanted by the executive to deal with the economic consequences of the coronavirus crisis. Gérald Darmanin announced that its amount was now estimated at 110 billion, against 100 billion last week and 45 billion three weeks ago. Bruno Le Maire has already warned: “If at some point we have to do more, we will do more”.

In detail, the partial unemployment scheme is now estimated at 24 billion euros (20 billion last week), and the Minister of the Economy has opened the possibility of its extension beyond May 11, for sectors who could not restart their activity. As for the solidarity fund for the self-employed, it could be improved. Its budget will increase to 7 billion euros and the contribution of insurers from 200 to 400 million euros. A proposal will be made to the Prime Minister on Tuesday to complete this fund, according to Bruno Le Maire. It will also be necessary to integrate exceptional assistance for low-income families, the cost of which is not yet known.

Read also:

Up to 1,250 euros of additional aid for craftsmen and traders

Cancellation of charges for hotels and restaurants

The discourse of Bercy tenants is also changing on the subject of the cancellation of tax and social charges. So far, Bruno Le Maire indicated that the charges would be postponed and canceled ” case by case “ for companies in difficulty. This Tuesday morning, he explicitly opened the way for a cancellation for certain sectors. “From the moment you do not find any turnover, the postponement may turn into cancellation”, he said. Gérald Darmanin specified that his teams were working on a cancellation for the hotel and catering industry “Which were closed at the request of the government” even if constitutional problems of equality before the tax will have to be removed.

All these figures are completely unseen in the history of modern France. For the record, in 2009, after the great financial crisis, activity had declined, but “only” by 2.9%. As for the public deficit, this will also be by far the largest since the end of the Second World War: the two previous records dated from the recession of 1993 (6.4% of GDP) and the financial crisis of 2009. (7.2%). As for the debt, it was already higher in the 20th century, but only after the end of the two world conflicts.

Read also:

ANALYSIS The crisis that takes us back twenty years

“Indicative” figures

However, records are made to be broken and Gérald Darmanin warned on Tuesday that the new budget forecasts were “Indicative”. “We do not yet know exactly how we are going to deconfin”, specified the Minister of Public Accounts. On the other hand, he ruled out resorting to the fiscal weapon to finance this yawning budget hole. “The solution cannot be in tax increases”, he assured.

—————

>>> France facing the coronavirus epidemic. What were the different stages of the alert? What is the day-to-day epidemiological situation? What measures has the government decided to take to limit the spread of the pandemic? To support the economy? Answers here in the special “Echoes” file.

Read also:

LIVE Update on the situation in France and around the world this Tuesday, April 14

OUR SELECTION OF ARTICLES ON CORONAVIRUS:

SURVEY

All the results and instructions for use of the CoviDirect daily rolling

TESTIMONIALS

Caregivers facing the coronavirus

Bosses tell each other at the time of confinement

DECRYPTAGES

All our CQFD decryption on the coronavirus and the economic crisis

PRACTICE

Containment: outings, races and certification … what is authorized and what is not