France unveils huge £89bn rescue plan

FACING resurgent coronavirus infections, France’s government has unveiled a €100 billion (£89 billion) recovery plan aimed at yanking the country out of its worst economic slump since the Second World War.

The massive plan includes money to bring back manufacturing of medical supplies to French factories, develop hydrogen energy, help museums and the cinema industry, train young people for 21st century jobs and hire more staff at unemployment offices.

“It’s an important step for our strategy in the fight against the economic and social consequences of the crisis that hit France,” Prime Minister Jean Castex said.

The government spent hundreds of billions of euros in emergency aid as the virus sped across France and filled its once-renowned hospitals earlier this year, prompting a strict two-month lockdown that nearly froze the economy but slowed the spread of infections.

More than 30,600 people with the virus have died in France, among the highest death tolls in Europe after Britain and Italy.

“France held on, but it is incontestably weakened,” Mr Castex said, and now must pull itself out of “an extremely sudden and brutal recession”.

The economy shrank 13.8% in the second quarter, which has torpedoed President Emmanuel Macron’s grand mission to transform the French economy before his first term ends in 2022.

France is again seeing a growth in infections after summer holidays, reporting more than 7,000 virus cases yesterday, the highest daily rate in Europe.

That is also well above the several hundred cases a day reported in May and June, when France was emerging from lockdown and testing less.

The number of people in intensive care with the virus is edging up, though is far from the crisis levels of March and April.

Despite the rise, France’s schools reopened their doors this week for in-person classes, and authorities are encouraging people to return to work.

And the government insisted yesterday it is time to plan for the postvirus future.

In a country that has long struggled to keep unemployment under 10%, the plan aims to create 160,000 jobs next year and restore France’s 2019 GDP level by 2022 – the year of the next presidential election.

“It’s ambitious but perfectly within our reach,” Mr Castex said.

Called France Reboot, the plan will include €40 billion (£35.6 billion) in aid from a European Unionwide rescue plan approved in July.

Mr Castex said the government will not raise the country’s already high taxes to pay for the rest, but will issue new treasury bonds instead.