Reconfinement in France? The employers’ warning

A re-containment similar to that decreed last March in order to contain the spread of the Coronavirus epidemic risks causing a “collapse of the economy”, French employers warned on Monday.

A total reconfinement would not only cause a “10% recession” in 2020 but “a collapse of the French economy”, indicated the president of Medef Geoffroy Roux de Bézieux, in statements relayed by the media of the hexagon.

The French economy was doing well in March during the first confinement, so “companies have withstood the shock”. “But there the organisms are weakened”. “If we completely reconfigure as in March, we are heading towards a collapse of the French economy, we risk not recovering”, estimated the president of the French employers,

“The markets have an incredible rebound capacity, but we are going to go into something very, very hard,” he insisted.

For the president of Medef, the idea that the situation will worsen is very much in the minds of households, who have already reduced their consumption. In addition, companies are already “very indebted” and “if we reconfine in a generalized way, entrepreneurs of VSEs and SMEs will not resort again to an EMP”, the loans guaranteed by the State put in place to support the cash flow of companies in difficulty.

“There are several very difficult months to go through but we have to hold on, finding a balance between economy and health,” he concluded, affirming that this balance must allow us to continue working.

On Friday, the Minister of the Economy and Recovery estimated at just over 2 billion euros, the economic cost of the expanded curfew decreed to stem the second epidemic wave.

Bruno Le Maire also anticipated a risk of a contraction in gross domestic product in the fourth quarter. The evolution of the French gross domestic product (GDP) is likely to fall again in the last quarter, due to the second epidemic wave and the curfew, the minister warned. However, he said, there will be a strong rebound in the French economy in 2021 and “in 2022 we will be able to find our economic development figure of 2019”.

According to the Minister of Economy and Recovery, this probable relapse of the French economy “is not a surprise”. This eventuality has been incorporated into the government’s 10% GDP contraction forecast for the whole of 2020.

SL (with MAP)

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