What fiscal policy in France after the crisis?

T he coronavirus crisis will lead to a sharp increase in European countries’ fiscal deficits for 2020. The rise in deficits reflects the deep recession and the economic measures implemented by governments across Europe . For France, we estimate GDP to decline by around 9 % in 2020 , the fiscal deficit at 10. 9 % and public debt rising to 11 8 % of GDP . From 2021 onwards , the French government should implement a stimulus policy to support busi nesses. Economic policy will depend on four factors : the fiscal multiplier, the cost of debt, the European response, the external environment. In this Special Report , we give an estimate for a scenario of public finances . One important consideration in the current situation, however, is that the ECB will continue to stand ready to backstop governments across the euro area . In fact, we expect a significant part of euro area sovereign debt to end up on the ECB’ balance sheet for a (very) long time. Thus, questions about debt sustainability will not become a pressing issue for France in any case .