France ready to start cutting back crisis aid, says Borne

Bloomberg

France is ready to start reducing financial support to businesses and workers hit by coronavirus restrictions as its vaccination program offers a route out of the crisis, Labour Minister Elisabeth Borne said.
The government has spent more than 40 billion euros ($48.8 billion) in 2020 and 2021 to protect employment, benefiting 2.7 million people on furloughs last month, up from 2.4 million in March, Borne told France Inter radio.
“With vaccinations, we can see the end of the tunnel,” Borne said. More than 25 million people had received at least one injection in France, with 36.1 million doses administered in total.
“We are moving into a new phase; we’re gradually reducing the emergency aid put in place during the crisis, and we’re increasingly targeting aid,” the minister said. “We’re being careful not to switch off support too quickly during this period, and to support sectors and areas that are still in difficulty.”
The government will continue to cover 100% of furlough costs for worst-affected businesses such as hotels, cafes and restaurants throughout June, the minister said. The portion covered by companies will thereafter rise progressively to reach 40% in September.
She added that industries such as aerospace, which has been hurt by a worldwide drop in travel due to health restrictions, were benefiting from a long-term plan to protect jobs for as many as 24 months that is currently helping more than 800,000 people.
The minister plans to hold talks with unions and employer organisations on June 7 to discuss how to protect the most fragile sectors and areas as the country emerges from the health crisis.
Budget Minister Olivier Dussopt told Agence France-Presse news agency that financial help for French businesses and workers will widen the country’s budget deficit to around 220 billion euros this year.

France in double-dip recession
France’s statistics agency cut its estimate of economic output at the start of the year, showing the euro area’s second largest economy slipped into a recession for the second time in the Covid-19 pandemic.
Gross domestic product declined 0.1% in the first quarter as construction was much weaker than early data had shown. Insee had initially reported growth of 0.4%.
A separate release showed the second quarter of the year began on a weak footing with consumer spending falling as much as 8.3% in April from the previous month, more than twice as much as economists forecast.