France reveals fresh stimulus worth 100 billion euros — almost 4% of its GDP and bigger than any other European economy
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- France launched a fresh stimulus plan worth 100 billion euros on Thursday to prop up the economy from the downturn caused by COVID-19, Reuters reported.
- President Emmanuel Macron's administration expects to return to a full recovery by 2022 through measures such as a 10-billion-euro tax cut, public investments, and subsidies.
- The "France Relaunch" stimulus plan represents 4% of French GDP, and is "one of the largest in Europe" relative to the size of the economy.
- The benchmark French index CAC 40 rose 1.6% in early European trading.
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France is pumping in a fresh dose of stimulus worth 100 billion euros ($118 billion) to rescue the economy from the pandemic-induced lockdown earlier in the year, Reuters reported.
The government aims to quash the impact of COVID-19 over a span of two years through public investments, tax cuts, and subsidies, Reuters said.
The benchmark French index CAC 40 rose 1.8% in mid-morning trading in Europe on Thursday, making it the best-performing index in the region. The Euro Stoxx 50 was up 1.4%.
"Fueled by hopes of stimulus stateside, and actual stimulus on the continent, the European markets surged out of the gates," said Connor Campbell, a financial analyst at SpreadEx.
Representing about 4% of the country's GDP, the "France Relaunch" plan implies that the government would pump more public funds than any other big European economy relative to the size of its GDP, Reuters said, citing an official.
President Emmanuel Macron said, in a tweet translated from French, "it is one of the largest in Europe in relation to GDP." French GDP contracted by about 14% in the second quarter this year, compared with a 12% drop in the wider eurozone.
Macron's administration expects to return to a full recovery — or to pre-pandemic levels — by 2022 after enduring its worst post-war recession, with an 11% contraction this year.
The stimulus plan includes the use of 35 billion euros ($41 billion) towards boosting the economy's competitiveness in the euro zone, 30 billion euros ($35 billion) towards environmentally-friendly energy, and 25 billion euros ($29 billion) to support jobs, Reuters said, citing officials.
The package fuels Macron's pro-business approach, which already included corporate tax cuts worth 10 billion euros ($11 billion) and fresh public funds to support sectors such as industry, construction, and transport.
The plan is expected to officially be announced later on Thursday.
The euro was down 0.3% against the dollar.
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