Massive French’s government spending
French government measured that the economy through the coronavirus crisis have cost 450 billion euros the equivalent of 20% of gross domestic product. The government budgeted 110 bilion euro direct crisis support for the economy.
During the crisis, the state has fully reimbursed firms for 70% of the gross wages paid to furloughed employees, but Le Maire (french prime minister) said that the amount paid to companies would be gradually reduced.
After Franco-German outlined a grant-based recovery fund proposal, there are many countries which refused the notion of grants. EU debt to provide grants issuing common debt to fund some €500bn of grants to help member states that have been hit hard by a coronavirus. New discussion will show stability on the instability of the EU by testing finding compromise during the biggest economic crisis from WWII.
Amount which will help aerospace and automotive sector is expected to be published before the revised budget bill in June. Next steps for France will be “strong measures” for carmakers that would boost demand, but which would require them to re-locate some production in France in exchange.