For Bruno Le Maire, the harder will be the recovery

For Bruno Le Maire, the harder will be the recovery

On July 7, Gérald Darmanin and Bruno Le Maire during the handover of power in Bercy.

During the transfer of power to Bercy, the superintendent of the French economy promised a plan that was both green, industrial and in favor of the “little ones”. He was pleased to recover the budget within his perimeter by promising a very clear calendar on France’s debt reduction.

The new Minister of Recovery knows this better than anyone. Reviving the economy promises to be “An overwhelming task […] at a time when France is facing its most serious economic crisis since 1929 “, reminded Tuesday at Bercy Bruno Le Maire, during a transfer of powers which confirmed him in his role as superintendent of the French economy. At the forefront during the pandemic to cushion the shock of confinement on activity, this good-natured liberal did not hesitate to put under cover everything that France counts as a merchant, with a lot of partial unemployment and loans guaranteed by the state. Now very comfortable in a colbertism that Arnaud Montebourg would not deny, he added the strong symbol of “revival” to his portfolio as Minister of Economy and Finance. What further strengthen the political weight of the ambitious Bruno Le Maire. But for Jean Castex’s new government, it is above all a question of signifying the importance of the recovery plan, expected in September, which will probably amount to several tens of billions of euros. The last time France had a Minister for Recovery was under Sarkozy, after the 2008 financial crisis, in the person of Patrick Devedjian.

“It will be an economic recovery which will first give all its attention to the smallest, […] those who have been hit the hardest in the country, “ announced Bruno Le Maire. The boss of Bercy notably cited the case of the three million self-employed workers who “Have taken this crisis head on”. “The first role which is ours is to support companies during this period”, abounded the new minister responsible for SMEs, the boss and former taxi Alain Griset, evoking a “Better future” at “to prepare”. In addition to these “little ones” threatened with bankruptcy by the recession, the two priorities of the recovery will be ecological transition and the reconstruction of the industry, with the creation of a post of minister delegated to this function. He will be occupied by Agnès Pannier-Runacher, already in charge of industrial files in the previous government with the title of Secretary of State.

“Command unit”

“We are not going to drop the supply policy” which aims to strengthen the competitiveness of businesses and the attractiveness of the territory, assured Bruno Le Maire, recalling that the government’s intention remained to reduce the production taxes that still weigh on businesses. So what is already programmed lower income tax, Medef returned to pay for the removal of the C3S (social contribution of corporate solidarity) and a reduction in the rate of CET (territorial economic contribution) for a total amount of 5.5 billion euros per year. This is “absolutely essential “, agreed Bruno Le Maire, who is more inclined to act via the CVAE (contribution on the added value of companies) by putting forward a question of “consistency” with regard to the issue of relocating certain productions to France. The subject remains “difficult”, he recognized, because this tax represents an important resource for the regions. “We will find an agreement. Some are ready to take the fall in their charge ”, he assured.

Now in control of the budget, entrusted to the new Minister for Public Accounts, the former socialist Olivier Dussopt, Bruno Le Maire considered that it was possible to revive the economy by remaining concerned about public accounts. “I don’t see any contradiction between the two.” Direct connection of Public Accounts to its scope “Absolutely changes everything”, even entrusted Captain de Bercy to journalists at the end of the ceremony, defending the need to have a “command unit […] in a time of crisis”.

Debt reduction calendar

Last week, the Court of Auditors alerted the government to the need to plan for a debt reduction trajectory from 2021 since the public debt should jump by almost 270 billion euros in 2020 and exceed 120 points of GDP against 50 billion predicted before the coronavirus. After more than 460 billion euros of public resources mobilized so far, the Minister has rightly promised “a calendar […] very clear” on debt reduction.

In a new note published Monday evening, the Banque de France describes what activity in the third quarter should bring together: a strong rebound of around 14% growth compared to the second, marked by an almost total halt in the economy, but that will not be enough to compensate for the dizzying dropout caused by confinement. In July, the level of activity should therefore continue to normalize “But at a slower pace, a large part of the rebound having already taken place following the deconfinement measures in May and June“, Specifies the monetary institution, which evokes a curve“ in wing of bird ”with a strong initial rebound which would then smooth out gradually. In the first quarter, gross domestic product fell 5.3%, according to INSEE, before contracting by 14% in the second, according to the Banque de France, which had previously forecast a fall of 15%. “I am not saying that we are out of the woods at all, it is a very serious crisis. In addition, its effects on employment are offset over time, so they are coming, but the recovery is going at least as well as we expected, and even a little better ”, had commented Sunday on LCI François Villeroy de Galhau, governor of the institution.

The Banque de France has nonetheless confirmed its annual forecast of a 10% drop in GDP in 2020. An estimate a little more optimistic than that of the government (-11%) or that of the International Monetary Fund (- 12.5%). The European Commission, for its part, is expecting a deeper recession in Europe than it expected in the spring. GDP in the eurozone should therefore fall by 8.7% in 2020 (against 7.7% expected in May) before starting again less strongly than expected in 2021 (at + 6.1%). According to Brussels, France will be one of the three European countries with Italy and Spain to see its GDP fall by more than 10% in 2020.

Video: Wall Street ends second quarter on a high note (AFP)




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