Déconfinement : why the reopening of the border turns the puzzle

Coronavirus : what will look like the stimulus package in France ?

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Europe is working on the economic recovery. Germany has launched its plan of 130 billion euros, and then there was a meeting of the european Council to discuss the collective programme of 750 billion. We are still waiting for the map of France. France argues that it has put in place the part-time unemployment, even if it has been a little reduced.The State has also launched its plans for sectoral support : this has concerned up to now the automotive sector, aeronautics and tourism. France supports rather the supply and the demand, or rather that the companies that consumers, even short-time work serves two, and then it relieves the cash flow of enterprises, and supports, the consumption is now a part of the income of the employees.

It’s not going to be enough : it is expected, in principle, a recovery plan for the fall. How to organize this recovery plan in France ? Not simple. A big savings has been accumulated by the French, on the order of sixty billion euros, related to the deficit of consumption during the confinement.

For all that, it must succeed in convincing households to spend, and then there are people who are already affected by the crisis, those who have lost their employment (1 million people out of work category in addition to from the beginning of the crisis). They are the lost revenues on a basis that is already low.

Two good tools of recovery

What are the good instruments to boost the economy that would have a robust recovery ? The first would be a tax cuts for sustainable businesses and households. It is an option that has been rejected by the government, which prefers for the moment-reports of charges or cancellations point. The stimulus plan in the automotive shows that the government is forced to do things that are contradictory : it does not lower the taxes on the production, which is one of the causes of the relocation, but pays subsidies to maintain the production site.

The second possible instrument that would be of direct transfers targeted on households that have seen their income fall in a significant way. Donald Trump gave $ 1,200 to all low-income households, Japan has done almost the same thing, Hong Kong. This money comes from the central bank. It therefore funded directly to the consumer. It is very likely that something was going on in Europe.

>> Out-of-series Lenglet-Co : crisis of the coronavirus, a daily podcast presented by François Lenglet and Catherine Mangin, who gives you the keys to understand all of the evolutions and revolutions caused by the crisis of the coronavirus in France, in Europe and in the world.

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