France: « Whatever it costs» season 2

Good news: the improvement in France’s public health situation has allowed more light to be shed on the timetable for easing. In three stages, the health restrictions are likely to be very gradually lifted by early February 2021, provided that daily infections remain on a downward trend and below the threshold of 5,000 daily cases. Determined to do whatever it takes to avoid a third wave and the synonymous third lockdown, the government’ s very gradual easing strategy is accompanied by an increase in government support for an economy already weakened by the first wave. This Special Report looks at the expected costs of this support. In addition to extending or reactivating the measures rolled out during the first lockdown, the government has supplemented its toolkit of emergency measures by introducing new corporate aid and welfare aid , some of which should be clarified in the coming days . The raft of emergency measures introduced so far in November come with an estimated price tag of nearly €1 6 billion. The bill will probably continue to rise in December, given the nationwide curfew and ongoing restrictions for activities involving close social interaction. It is likely to remain compatible with the €20 billion budget extension included in the fourth amending finance bill. According to the timetable presented by the French president, the reopening of all activities is not scheduled before February 2021 and is conditional on keeping the contamination below 5,000 cases per day. Activity in early 2021 will therefore be affected, even though it should be much less than in November, marked by a fall in activity compared to the pre-crisis (Q4 2019) estimated at around 13% by the French National Institute of Statistics (INSEE). In its latest forecast released on November 17, the government reduced its growth expectation down to 6% in 2021 compared to 8% before the second lockdown.