France has announced that it would spend €100 billion ($118 billion) to revive the economy from the slump caused by the coronavirus pandemic. France’s economy shrank 13.8% in the second quarter of 2020, with full-year growth expected at negative 11%, one of the region’s deepest contractions. The stimulus will run for two years and is expected to reinforce President Emmanuel Macron’s pro-business reforms.
The €100 billion is equal to 4% of France’s GDP, one of the largest among its European neighbours. Of which, €35 billion is directed toward improving the country’s economy, €30 billion to promote greener energy policies, while the rest is aimed at supporting broader social initiatives including training, and jobs creation. Prime Minister Jean Castex said that the government aimed at opening at least 160,000 jobs in 2021 under the plan.
A large part of the package is aimed at accelerating transformation toward green energy. This has been Macron’s priority since environmentalists beat his ruling party in this year’s municipal elections. The hydrogen industry will receive €2 billion until 2022. Around €6 billion will be spent on improving the insulation of public buildings and homes. The transport sector, especially the ageing rail network, will receive the largest chunk of the new investment.
