“Economic and Social Resilience Plan”: Government Prepared

For a few days, Bercy stopped sleeping. “We’re back in crisis,” Bruno Le Mer said, as was the worst of Covid’s pandemics last Thursday. It must be said that Ministry of Economy officials are cutting out their work for them. In addition to implementing sanctions and tracking oligarch assets, they must again prepare measures to support the economy. Emmanuel Macron announced the “Economic and Social Resilience Plan” on Wednesday night. This should be detailed by mid-March.

Barely out of the tunnel, the French economy is preparing to overcome the new. Rising raw material and energy prices, supply problems, loss of exports …: The war between Russia and Ukraine will hurt businesses and households. But the similarities with the Covid crisis end there. Conflicts should not put us in recession. However, it may be sufficient to suppress the initial recovery, especially if you turn off the gas faucet.

As a result, the “resilience plan” should not look like the support measures implemented during the pandemic. For executives, there is no doubt that for good reason, a multi-billion euro blow for months will once again water the economy. The “whatever it is” slate is still putting pressure on our finances. But it shouldn’t give the impression of sitting vaguely a few weeks before the presidential election. As a result, the treatment needs to be surgical, but visible. An equation that is difficult to solve, tracking the progress of the conflict over time, and thus the potential economic impact, in order to adapt the measures.

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Inflation: Do not add fuel to the fire

What shape can they take? At this point, “Nothing has been decided. We are still in the consultation phase,” assured by Chorus Matignon and Bercy, who emphasize the need to continue the diagnostic phase to map the problem. On the side of the 500 or so companies that may be affected, support should not take the form of compensation for lost sales, even in aviation, agricultural foods, chemicals, cosmetics, and even automobiles. Epidemic. “We are not facing a shock of demand to be compensated,” we explain to Bercy. However, measures are emerging for the most vulnerable companies (the ones most energy-intensive or exposed to international competition) and those facing supply shortages.


For households, the problem is even more complicated. According to a Euler Hermes study, annual energy prices for French households will rise by € 400, potentially reducing disposable income by one point. Above all, the surplus savings accumulated during the Covid crisis may not be sufficient to offset this increase. Bruno Le Mer has already announced that the “tariff shield” for gas prices will be extended a priori until the end of the year. Do you need to do more to distribute inflation compensation and fuel vouchers? If purchasing power support is part of the package, the government is trying to find the right way. In an era of high inflation, it is also a challenge not to add fuel to the fire by strongly stimulating demand in the face of supplies that may not be met …


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