Macron Pledges Another $113 Billion to Revive French Economy

(Bloomberg) --

French President Emmanuel Macron committed to spending an extra 100 billion euros ($113 billion) toward resurrecting the euro’s ravaged second-biggest economy.

The funds, which will come on top of emergency aid and sector specific plans for tourism, aeronautics or auto manufacturing, will target the country’s “industrial, ecological, local, cultural and educational recovery,” Macron said.

“We are entitled to think big and long-term,” he said. “I’m convinced we can build a different country in 10 years.”

Speaking during a televised interview after a ceremony commemorating Bastille Day, the French leader sought to present the economic ravages of the virus as an opportunity to invest in the sectors that will matter in the future. He avoided saying whether he’d run for re-election in 2022.

While Macron has repeatedly pledged to re-invent himself following months of criticism over his government’s handling of the Covid-19 crisis, he mostly stuck to his guns.

Youth Concerns

Macron has previously said some 460 billion euros would be spent to support the economy during and after the lockdown, including a state-funded furlough, tax cuts and loans for businesses. A new longer-term stimulus plan will be unveiled at the end of August, Finance Minister Bruno Le Maire said Monday. Le Maire added that it would include tax cuts for companies. An official at the finance ministry said the 100 billion euros would be part of that plan.

Worries are also mounting for the prospects of young people entering the work force in September.

The French president pledged to create 300,000 special new contracts for them, in addition to 100,000 new contracts for the national volunteer service in the next semester. Companies hiring young people will benefit from temporary tax cuts, and some of those who can’t find jobs will be allowed to study longer, he said.

Open Door

While Macron defended his track record and policies, he left the door open to postponing his flagship pension reform until after 2022. Still, he said the overhaul of the pension system -- which was suspended during the crisis -- would eventually be needed. He also said he’d consider postponing the suppression of the housing tax for wealthier taxpayers. He ruled out the re-instating the popular wealth tax.

Economic uncertainty will remain high in the next few months, as France is bracing for a possible second wave of the epidemic. The government sees output dropping by 11%, and at least 800,000 job losses this year. To avoid new cases, Macron said he supported making masks mandatory in all closed public spaces from August.

During the interview, the president sought to respond to concerns raised by feminists following the appointment of Interior Minister Gerald Darmanin, who’s being investigated for rape. Macron said he discussed the accusations with Darmanin before the appointment, and insisted on the need to respect the presumption of innocence.

Asked about police violence, the president said the police will be equipped with bodycams to “restore trust between the population and the police.”

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