First visit to European Commission by Prime Minister Jean Castex

The French Prime Minister, Jean Castex, will meet the President of the European Commission, Ursula von der Leyen, Executive Vice-President Margrethe Vestager, and Commissioner Thierry Breton on Friday 23 October in Brussels. He will inform them of the preparations underway for the national recovery plan and will emphasise the importance of financial support from the Next Generation EU Recovery Plan being channelled to Member States as soon as possible.

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French government lays out fresh €100B stimulus package
Prime minister outlines raft of measures to help kickstart a recovery.

'French Prime Minister Jean Castex on Thursday detailed a €100 billion recovery plan over two years to help the country's economy bounce back from coronavirus-induced recession.

It is "the amount needed ... to go back to our pre-crisis level of wealth by 2022," Castex said, as he touted "the most massive recovery plan among European countries in proportion to national wealth."

The prime minister, who presented the plan alongside Economy Minister Bruno Le Maire, Environment Minister Barbara Pompili, Labor Minister Elisabeth Borne and Secretary of State for EU Affairs Clément Beaune, said the fresh injection of cash was needed to avoid long-term damage to the economy and the country.

“It is preferable to temporarily downgrade public finances rather than sinking into austerity and let unemployment, misery and human drama explode,” Castex said, hinting at the continued impact on the country’s debt, although he said that wouldn’t be felt after 2025. The EU already lifted its usual fiscal rules to allow countries to support their economy.

The new package of €100 billion is in addition to around €470 billion in public spending and loan guarantees that have already been announced since the coronavirus crisis hit.

The plan includes three pillars: greening the economy (€30 billion), promoting economic sovereignty and France's competitiveness (€34 billion) and funding “solidarity and skills” through social expenses (€36 billion).

Castex highlighted the role played by Europe in his speech, with a special emphasis on Berlin and Paris.

"Thanks to the historic agreement reached by President Emmanuel Macron and Chancellor Angela Merkel, [the plan] will benefit from €40 billion of European funds [through the EU's recovery fund]," Castex added.

"Europe is at the heart of the recovery plan," Beaune said on stage.

France will send its proposals to the European Commission in the fall, for an evaluation in the first quarter of 2021 and the release of the expected funds by next summer, officials said. The state will therefore advance the money before being reimbursed by the EU.

Green recovery
A sensitive question is to what extent the plan will help France achieve its goal of becoming carbon-neutral by 2050. The country was not on track to meet its emissions-reduction targets before the coronavirus crisis hit, the High Council for the Climate, an independent body set up by French President Emmanuel Macron, found.

Environment Minister Barbara Pompili touted a "giant step for the green transition in France," with €30 billion out of €100 billion being channeled to greening.

But environmentalists were quick to point out what they see as loopholes in the plan.

"The €30 billion is a one-shot whereas the gifts to polluting companies are enduring," Julien Bayou, from the Greens, said, referring to €20 billion worth of tax breaks granted to businesses across the board under the competitiveness pillar.

The green pillar includes one-off measures such as temporary cuts to tolls for rail freight and long-term investment such as around €8 billion for the renovation of buildings and €1.2 billion for public transport.

Industry first
Le Maire emphasized the government's will to modernize the French economy, boost sovereignty and competitiveness.

"We have [in the past] failed to launch new industrial branches," Le Maire said, whereas France needs to become "a European and global leader" on "biotech, renewables, quantum calculus, waste management," he added.

The industrial plan puts a focus on reducing taxes, with a €20 billion cut on production taxes, and includes funding for relocating through subsidies, with batteries cited as an example of targeted sectors by Le Maire.

President Ursula von der Leyen receives Jean Castex, Prime Minister of France

French prime minister tests negative for coronavirus
Jean Castex was in contact with an infected person at the Tour de France.

French Prime Minister Jean Castex tested negative for coronavirus after coming into contact with an infected person.

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