France Allocates $490Bln To Support Economy During Coronavirus Crisis - Finance Minister

MOSCOW (Pakistan Point News / Sputnik - 25th May, 2020) The French government has spent 450 billion Euros ($490 billion), which is equal to 20 percent of its domestic wealth, on a series of measures aimed at maintaining the country's economy amid the coronavirus pandemic, Finance Minister Bruno Le Maire said on Monday.

As the two-month lockdown introduced in France since mid-March has greatly slowed the economy, the government implemented a package of support measures that included state-guaranteed loans, tax deferrals and payments to small businesses.

"If we take everything that has been done with the budget and in support of businesses' cashflows, it is 450 billion euros, 20 percent of the nation's wealth on the table," Le Maire said in an appearance on the BFMTV channel.

The finance minister said that the government has allocated 300 billion euros for state-guaranteed loans for businesses. This measure is only expected to have a direct impact on the budget if a company goes bankrupt and uses a guarantee under the program.

Le Maire also said that the so-called partial unemployment system, aimed at supporting small businesses and preventing the explosion of unemployment in France amid the pandemic, will evolve on a more "reasonable" basis starting June 1. During the lockdown, businesses received government funding to pay salaries to employees who were forced to stay at home and could not work. According to Le Maire, now, business owners will receive less financial aid from the state as their firms gradually reopen amid the lockdown ease. However, for those sectors that do not resume their activities on June 1, the program will remain in place, the minister added.

The minister said that the French authorities have already presented a support plan for the tourism industry, one of the sectors hit hard by the COVID-19 crisis. Aid strategy for the automobile sector is due to be announced on Tuesday by French President Emmanuel Macron. A rescue plan for the aerospace industry is to be unveiled in June, he added.

Notably, according to Le Maire, the government's support strategy for the car industry will include "strong" measures in order to increase demand. However, French car manufacturers will have to make certain commitments in return, particularly, relocate some of their production on the country's territory, he added.

Le Maire also commented on the critical situation of the French carmaker, Renault, which is on the verge of going bankrupt. He indicated that a state-guaranteed loan of five billion euros, which is crucial for the company, was not yet signed, as some aspects are still being negotiated.

The minister also supported the idea of postponing the summer sales period in France, which was supposed to start on June 24 for up to four weeks.

France began gradually lifting the COVID-19 related restrictions on May 11. All stores, firms, educational facilities and public places, which had remained closed for two months, began reopening in so-called green areas of the country less affected by the virus. However, red, or highly infected regions, remain under strict monitoring and related safety measures. As of Monday, the French authorities have reported nearly 183,000 COVID-19 cases and over 28,000 related fatalities.