France to Unveil Aid Packages for Auto, Aviation Industries
The French government has moved to revive the economy after loosening lockdown restrictions.
(Bloomberg) --
A French plan to revive the battered auto and aeronautics industries is taking shape after Finance Minister Bruno Le Maire pledged support measures by the end of June, including incentives to buy electric cars.
“We want to support, via demand, vehicles that emit the lowest amount of carbon dioxide, in particular electric vehicles,” Le Maire said on CNEWS television Friday. “The role of the state is precisely to encourage going in this direction so that we have a high-performance and green automobile industry.”
The aid would come after the government promised 18 billion euros ($19.4 billion) to back the tourism sector, which ministers have said is desperately needed because restaurants and hotels are among the hardest-hit by the coronavirus pandemic. Le Maire on Thursday had said aviation would also be a recipient of state support, but didn’t provide any details.
Unlocking
The French government has moved to revive the economy after loosening lockdown restrictions, including allowing more stores and some schools to reopen. While Air France-KLM and carmaker Renault SA have obtained billions in state-backed loan guarantees, their operations remain depressed. Plane maker Airbus SE, which has shunned direct state support, is planning to cut jobs, and engine manufacturer Safran SA has also seen a sharp drop in activity.
“Air France was at risk of disappearing, and parts of the car industry are also threatened with disappearing,” Le Maire said Thursday evening on BFM TV.
A key difficulty for France is how to coordinate its stimulus efforts with other European countries. Negotiations for a shared European “recovery fund” are dragging on, making it hard for governments to take quick decisions on their own sectorial plans.
“If we want those plans to be efficient we need to get the support of the EU and we need to get the support of the recovery fund,” Le Maire told European industry ministers in a video conference on Friday. “We really think this recovery fund is a key pillar for the economic recovery within the EU.”
Meeting
The French finance minister was scheduled to meet with carmakers and industry representatives on Friday to discuss ways to support demand for low-emission and electric vehicles. The incentives would be for households and managers of public and private fleets.
French auto industry lobby PFA is pushing for a doubling of the incentive for fleet managers to buy an electric vehicle to 6,000 euros, where it stood until the start of this year before being cut, and a new bonus of 2,000 euros toward the purchase of plug-in hybrid vehicles. The group also backs a cash-for-clunkers plan to encourage consumers to replace older more polluting cars with cleaner ones, and wants aid for research and development and spending on industrial sites including on robots.
The French government holds stakes in Air France-KLM, Airbus, Renault and Peugeot maker PSA Group.
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