“After Covid, France is facing an economic revolution.”

ADVERTISEMENT

The moment of truth in France is coming. The United States plans to invest $ 1.9 billion over eight years by creating even temporary inflation in infrastructure (transportation, industry, and even internet networks) to improve the country’s competitiveness. To raise funds for this measure, corporate tax will be raised from 21% to 28%, and those with an annual salary of more than $ 400,000 will pay on their income. “This will create the most resilient, powerful and innovative economy in the world. »»

France is at risk of being left behind in the period after Covid-19. Like the United States, Japan has already validated a new plan of € 600 billion, which is 13.2% of GDP. “We have put together these steps to restore the economy, paving the way for growth with a more focus on green and digital technologies.” Japanese Prime Minister Yoshihide Suga said. In Japan, unlike France, where non-resident investors hold more than 50% of their external debt, Japanese hold more than 83% and foreigners hold more than 7%.

Need for investment

Growth cannot do everything without investment. You can read it on the website collectivites-locales.gouv.fr: “To restore the French economy quickly and sustainably, the government is developing an exceptional recovery plan of € 100 billion centered on three key factors: ecology, competitiveness and cohesion.” And the Prime Minister explained: “This is all new credit, but only $ 80 billion is charged directly to the state budget.”

To liquidate this debt caused by the Covid-19 crisis, the Minister of Economy and Finance has proposed a 20-year repayment, adding: “It will be done by only one means: growth.” Finance expert François Ecare says that even if interest rates remain low, the average annual growth rate can be 1.4%, but organizing accounts can be very complicated and very complicated. It’s a dangerous bet because it’s clearly explained in.

More serious crisis than 2008

According to the International Monetary Fund (IMF), the Covid-19 crisis will be worse than the 2008 crisis. The 2008 financial crisis caused France to lose about € 1.541 trillion in gross domestic product (GDP) over a decade, according to calculations by Eric Dor, Dean of Economics at the IESEG School of Business. France’s debt increased by € 100 million between 2007 and 2017. Over the same period, total debt interest repayments alone reached € 500 billion.

ADVERTISEMENT

“Zero taxation on small donations is not enough to generate growth. »»

Another chance you can’t miss. With a € 750 billion European borrowing plan suspended by the German Constitutional Court (€ 40 billion in France), France goes a step further for the Green Agreement (one-third fund), health, dependence and solidarity. Agreements, agreements for rural areas, and agreements to invest in sustainable activities and accelerate digital transformation. In 2020, public procurement (purchasing engineering services and consumables as well as investment) also experienced a significant 18% decline, stronger than the most serious reversal since 1950.

Immerse yourself in savings

What to do with French savings? The total amount saved by the French is about 600 million euros. This total is being abused, though not negligibly. The increase in household savings far exceeds economic growth and inflation in 2019. On average, French people can save just under 15% of their income. In 2020 and 2021, the pandemic will force household savings of € 200 billion. Zero taxation on small donations is not enough to generate growth. It is highly desirable to spend 6% to 10% of household savings each year on innovative and innovative growth.

How to stop the spiral of failure? Household savings must be used within a regulated framework. Frozen situations and constrained political, economic and financial environments are favorable today. Funds are managed by joint and professional public credit institutions. This financing mechanism allows investment to be rewarded at inflation rates to achieve economic and social goals in a more resilient framework.

Find the way to employment

We do not rely on national debt. The investment of these citizens, like any other public investment, has a very strong boost to the economy. OFCE in the public investment study “Public Capital and Growth” coordinated by Xavier Ragot and Francesco Saraceno explains: “The increase in GDP per euro is called the fiscal multiplier. Studies have shown that the multiplier for public spending on GDP is 0.8, and the results vary widely, especially in times of crisis. When the policy reaches the zero limit of interest rates, the multiplier increases and reaches a higher value between 1.3 and 2.5 … Finally, in an economy like France, the tax burden is close to 50% and the multiplier is If it exceeds 2, it means that the measure is mostly self-funded. In such a configuration, a recovery policy must always be adopted. »»

“Public investment in France at 10% of annual GDP can create at least 3 million jobs. »»

How can I find a way to get back to work? Investing 1 billion euros a year creates 8,000 to 20,000 jobs (12,000 construction jobs). When the United States invested € 90 billion in clean energy under the Reconstruction Act of 2009, it created 900,000 full-time jobs annually in this sector between 2009 and 2015. For example, France has a public investment of 10% of its annual GDP. , Or about € 250 billion, will enable the creation of jobs for at least 3 million people and the state will recover € 125 billion in revenue.

Read also: Recovery: Europe is anxiously late, ridiculed by Biden’s plans