France Is Ready to Start Cutting Back Crisis Aid, Minister Says

Bookmark

France is ready to start reducing financial support to businesses and workers hit by coronavirus restrictions as its vaccination program offers a route out of the crisis, Labor Minister Elisabeth Borne said on Sunday.

The government has spent more than 40 billion euros ($48.8 billion) in 2020 and 2021 to protect employment, benefiting 2.7 million people on furloughs last month, up from 2.4 million in March, Borne told France Inter radio.

“With vaccinations, we can see the end of the tunnel,” Borne said. As of Saturday, more than 25 million people had received at least one injection in France, with 36.1 million doses administered in total.

“We are moving into a new phase; we’re gradually reducing the emergency aid put in place during the crisis, and we’re increasingly targeting aid,” the minister said. “We’re being careful not to switch off support too quickly during this period, and to support sectors and areas that are still in difficulty.”

Long-term Furlough

The government will continue to cover 100% of furlough costs for worst-affected businesses such as hotels, cafes and restaurants throughout June, the minister said. The portion covered by companies will thereafter rise progressively to reach 40% in September.

She added that industries such as aerospace, which has been hurt by a worldwide drop in travel due to health restrictions, were benefiting from a long-term plan to protect jobs for as many as 24 months that is currently helping more than 800,000 people.

The minister plans to hold talks with unions and employer organizations on June 7 to discuss how to protect the most fragile sectors and areas as the country emerges from the health crisis.

Budget Minister Olivier Dussopt told Agence France-Presse news agency on Saturday that financial help for French businesses and workers will widen the country’s budget deficit to around 220 billion euros this year.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.