A couple, one of whom is checking their smartphone, enjoy the view of the Eiffel Tower at sunset in Paris on February 23, 2021.
Ludovic Marin | AFP | Getty Images
France may still be in the grip of the coronavirus pandemic as the delta variant spreads rapidly, but officials and business leaders envision a period of recovery and reflect on the broader outlook for the political and economic future from France.
“The rebound is very pronounced, but it is even more marked than last year. We are therefore quite satisfied with it,” Agnès Bénassy-Quéré, chief economist of the French Treasury, pointed out to the Office on Sunday. national statistics boosting its growth forecasts. for France in 2021 at 6%.
“The official forecast is still 5% for 2021 because we remain cautious about the fall. As you said, there is a delta variant, and we kept some restrictions until the end of the year. So already in the spring, when this forecast was made, it included some restrictions, slight restrictions from the second half of the year. So far, we haven’t changed that forecast, so we’ll see what happens when we have to build the 2022 budget, ”he said. , speaking to CNBC’s Charlotte Reed at an economic forum in Aix-en-Provence.
Of course the Covid-19 pandemic has left a lot of destruction in its wake and no less in France, where more than 5.8 million contaminations have been recorded and more than 111,000 deaths to date, according to data from Johns Hopkins University.
Like other countries, France has introduced emergency measures to support the economy, businesses and jobs during the pandemic and there are now fears that the decrease in this support could lead to job losses and the closure of some businesses.
Bénassy-Quéré said the government had been “very careful about this”, but the job market was currently resilient.
“There is a gradual decrease in support, emergency support, which is gradual over the summer. And there will always be some support, for example. [the] long-term unemployment, which will still be in place in the fall for activities such as [the] the aviation industry, where we really want to keep the skills in the industry, so there will be retraining programs. “
However, he noted that while activity in some industries was already above its pre-crisis level, some are lagging behind, such as tourism. Besides an uneven recovery, another problem for the government is that huge borrowing has pushed France’s debt to an all-time high. Earlier this year, the National Statistical Office of France INSEE reported that public debt stood at 115.7% of GDP at the end of 2020, up from 97.6% in 2019.
How France will repay this debt is uncertain at the moment, as the government, under President Emmanuel Macron, is unlikely to raise taxes just 10 months before a presidential election. It is also uncertain whether Macron will go ahead with ambitious (and unpopular) reforms to modernize and simplify the timber retirement system in France, given the pandemic situation.
So far, two rounds of regional elections in recent weeks have dispelled expectations that the far-right National Rally party – formerly known as the National Front – could perform well in the national vote next year. after poor performance in the regions. Voter turnout was low in both rounds, leading some analysts to worry about the extent of voter disaffection in France.
Also present at the economic rally in Aix-en-Provence, Valérie Rabault, president of the Socialist Group in the National Assembly told CNBC on Sunday that “French society is broken” as evidenced by the low participation in regional votes.
“We had local elections and less than 35% of people went to vote, so it’s very low. It was the first time in France that we have so few people going to vote in local elections. For me, that reflects … a kind of indifference on the part of the people to build a common project for France, for society, and it is the great challenge for us, politicians, to be able to address this question and to have [a] more positive message after the crisis, “she said, adding” we have to define something, a common project that can unite people.
Business leaders attending the Aix-en-Provence Economic Forum told CNBC that there remain structural issues in France that are not so easy to resolve.
“The divisions that have existed in French society are still there, whether it is the territorial divide, the generational divide and the very low percentage of voters as we saw in the last elections”, Pierre-André de Chalendar, president of French building materials group Saint-Gobain, told CNBC on Saturday.
“The priorities are clear, (they are) the energy transition, reindustrialisation – which is the best way to break this territorial divide – and to put more emphasis on youth, on education. The question is how do we do that and I think in France the problem is that the state, on the whole, is too big and not efficient enough. “
Ross McInnes, chairman of Safran, agreed that “two important structural issues” should be addressed in France, the main one being the quality of education in France.
“When it comes to education, our school system has failed us collectively,” he told CNBC. “A hundred thousand young French people … leave high school without having good math, you know, the three ‘Rs’ of reading, writing and arithmetic. And this is something that we urgently need to correct. Otherwise, companies will not be able to recruit talented people for good jobs. “