What consequences the coronavirus epidemic could have on the French economy? This Tuesday July 7, 2020, the European Commission shared economic forecasts as for the entire European Union. This is no surprise, the pandemic causes the GDP to withdraw by 8.7% for the euro zone.
France might experience a 10.6% recession for 2020 with a +7.6% recovery in 2021. Two other countries get below -10%: Spain with 10.9%, and Italy with 11.2%. Their 2021's recovery is respectively assessed to 7.1% and 6.1%.
Former Budget Minister Gérald Darmanin was interviewed on Sunday May 24, 2020 on Le Grand Jury RTL-Le-Figaro-LCI. Running his minister and the city of Tourcoing as mayor, the minister intending to weigh more into the government’s decisions has estimated France’s debt could be over 115% GDP by the end of the year.
In 2019, France’s public debt went below 100%. But the coronavirus epidemic, that has been a hard blow on many sectors, lets us think an economic crisis is yet to come. The government has multiplied grants and support schemes, especially for tourism players, while showing a will to rethink salaries and the organization within public health. Spends that have been made in a context where the activity has slowed down and even stopped because of lockdown and that is only gradually resuming.
If the minister refuses to bring a more detailed estimation, the threshold of a debt over 115% of GDP in 2020 is included in the latest corrective budget. Yet, Gérald Darmanin also confirms that increasing taxes is not planned to repay the debt. He says that Emmanuel Macron chose to trust the economic players through the support schemes adding that “the growth creates the wealth that enables to pay the debt back”.
