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€42 billion euro stimulus may not be sufficient to pull France out of economic downturn

© John Towner

Earlier in September, France presented its 2021 budget that would aim to inject a €42 billion euro stimulus into the economy to help struggling industries overcome disruption from the pandemic. 

However, in the last few weeks, the number of cases has risen sharply, with further local lockdowns causing more economic pain for hotels, restaurants, aviation and the leisure sector. 

As the most visited country in the world, the net fall in visitors, the largest since WW2, is leaving top destinations like Paris and Nice devoid of tourists or income from visitors. This was evident this week in Paris with Trocadero, Opera and St Michel eerily quiet with many shops closed, and retailers struggling to pay landlords following a collapse in consumer demand. 

The picture is the same across France in cities like Marseille and Nice, which have also struggled with further lockdowns, skyrocketing cases and an economic downturn. 

The risk is also amplified as Britain leaves the European Union’s custom territory in January, with the potential of a no-deal Brexit, and problems at Calais for freight going between the two countries. 

Will France revise its budget commitment and make extra pledges to help sectors affected by the ongoing disruptions?