“The urgency of the crisis and the electoral deadlines pollute the long-term visions of the executive”
Wednesday, October 14, Emmanuel Macron underlined the seriousness of the second epidemic wave, but decided not to choose between health and recovery. Containment, which was imposed in the spring, putting the country almost at a standstill for eight weeks and plunging the economy, has become a ” Red line “ for the government. He is looking for the way, handling fear in order to better enforce health constraints, while taking care not to petrify an economy already on its knees.
Between public health and economic recovery, can the government strike a balance? Our journalists Audrey Tonnelier and Claire Gatineau, in charge of public finances and Bercy, answered your questions on the subject.
Just a banshee: Why is the Ministry of Finance not considering a (ecological) conversion rather than a revival of the economy? Do you think he is incapable of thinking long term?
The recovery plan intends to combine the revival of the economy and its greening, by financially supporting initiatives which would make it possible in particular to reduce CO emissions.2 (thermal renovation of buildings, modernization of industrial processes, implementation of low-carbon heating systems, green loans, etc.).
Ecological reconversion is a long-term process, the effects of which will be seen within five, ten years perhaps. However, the stimulus plan also made the bet of supporting the economy in the short term to avoid bankruptcy and support employment. The urgency of the crisis (and the electoral deadlines) pollutes, in fact, the long-term visions of the executive.
Une’tite question: Why is the government so reluctant to impose teleworking, when it does not seem to have any problem with putting in place a curfew?
Teleworking can hardly be imposed. The unions are, moreover, not in favor. Especially since teleworking deprives employees of contact with unions. Some workers do not have the means to telework (little space, no computer at home, etc.) while others, better off, can. Some functions, too, do not lend themselves to this. The government can encourage it but hardly impose it. The fact remains that he could have encouraged more and earlier to these two to three days of teleworking per week, desired by Emmanuel Macron.
Luluma: What is the weight of tourism, catering and culture in the economy? Is it really possible to do without the revenues linked to these sectors?
The sectors affected by the curfew represent nearly 4% of GDP, half of which is for catering. The government’s bet is to tighten the screws during these four to six weeks by fully supporting these sectors in order to then be able to lift the constraints. These include freeing up the end of year celebrations.
Cynic: Stop me if I’m wrong, but basically the government’s strategy is “Go work and… go work”. Measures to protect our health are just scoops, right?
Don’t stop, you are right. The economy takes precedence, the Head of State does not hide it, and the increases in precariousness, unemployment and bankruptcies worry the government. But health issues eventually prevailed, forcing the government to implement this curfew, less harmful to the economy than confinement. The president’s hope now is that this curfew is enough to roll back the Covid-19.
€€€: The government maintains the “whatever the cost” line. But where does he get the money?
The line of “whatever it costs” is effectively maintained. The government believes that the financial cost of this emergency support will ultimately be less damaging than the management of cascading bankruptcies and the explosion of unemployment.
Mathh60: I doubt the effectiveness of the health measures announced by Macron … Do we at least know whether aid to companies will have a real effect?
On the measures contained in the recovery plan, we will have to meet in a few years. The controversial reduction in production taxes is supposed to boost the competitiveness of companies. Will it translate into investments, jobs and relocations? Mystery.
On the emergency measures, on the other hand, we already know, given the low number of bankruptcies and judicial reorganization procedures, that they are achieving their objective: to keep companies under artificial respiration during the crisis.
Angry citizen: What is the point of a stimulus plan for an economy that is largely shut down?
The government was taken aback. He obviously thought that the spring containment would have been enough to make the virus disappear. Here he is caught up by the second wave. The recovery plan, which was presented as an initiative to transform the economy in the medium to long term in order to make it ” stronger “ at the end of this crisis, is now, in part, eclipsed by emergency systems.
D: Can we say that the stimulus plan and aid only go to the rich?
The government assures the contrary, but debates in Parliament have pointed to the fact that measures, such as lowering production taxes, were more beneficial to large than to small businesses. On the other hand, the Minister of the Economy Bruno Le Maire has assumed a stimulus plan focused on supply (businesses) rather than demand (households). He was called to review his copy by parliamentarians. And the intensifying crisis is also forcing it to adopt measures for the most precarious. Tomorrow, Prime Minister Jean Castex will present the details of the measures of a new poverty plan.
Delilah: Are we entering a more important politicization of the management of the crisis with the prospect of 2022 approaching?
For the moment, it is clear that the health measures are very widely approved by the population. The whole question will be how they will be accepted in the medium term. The young and the poor will be much more affected. For the moment, politically, the oppositions have little hold on this subject. Very smart who can say today in what context will take place the electoral campaign …
Bulle: Is re-containment absolutely unthinkable? If so, is it for purely economic reasons?
Containment is a “red line” for the Elysee. It would annihilate all recovery efforts with a dramatic social cost for the most modest. However, the option is not completely ruled out. Mr Castex again raised the threat of re-containment if the curfew did not meet its objectives.
And taxes: The State gives, gives, gives… Is it at this point unthinkable to increase the taxes of the richest? !
This is the whole point of the debates in the Assembly at the moment around the draft budget. But the government categorically refuses to do so, on the grounds that any increase in taxes, even for the wealthiest, would constitute a negative signal for the French, raising fears of further larger increases thereafter. In addition, for Emmanuel Macron, the reform of the ISF is a strong symbol of his economic policy.
However, the fact that the health crisis has worsened inequalities, in particular because the better-off have saved more and more and more households are falling into precariousness, provides arguments for all those who demand more tax justice.
Laure: Why choose to stigmatize bars and restaurants, and leave other types of business open?
From now on, all businesses, such as bars and restaurants, will be required to close at 9 p.m. And for shopping centers, the number of people will be even more strictly controlled. It is true that bars and restaurants, along with the cultural sector, were the big victims of the period. The argument has always been that these are places of conviviality, where the virus circulates more easily (less wearing of a mask, etc.).
Kevin974: Doesn’t the executive act more by mimicry with other European countries or by electoral calculation rather than by pragmatism?
During the spring containment, the government was rather a follower of its European neighbors. Germany, for example, took restrictive measures earlier than France. This is probably less of an electoral calculation than of the desire to continue to run the country and “Live with the virus”.
Skeptical: Does the government plan to initiate a demand-side policy to boost household consumption?
Until now, the government has assumed to engage in a supply policy, targeting businesses and therefore work. The brutality of the crisis will force it to take measures to protect and support the most disadvantaged households. However, the head of state does not seem ready to “Reinvent” by making a radical shift to directly support the purchasing power of all households. A reduction in VAT, as in Germany, for example, is ruled out.