Economic activity will fall by 15%, government estimates

Economic activity will fall by 15%, government estimates
Economic activity will fall by 15%, government estimates

Bruno Le Maire – Ian Langsdon / AP / SIPA

The government hopes to halve the impact of measures intended to counter the progression of the Covid-19 epidemic compared to the first wave. But he estimates that the new confinement, which comes into force on the night of this Thursday to Friday, will cause a fall in economic activity of 15%.

“During the first confinement, we had a 30% drop in activity, in particular due to the collapse of the construction industry, and the virtual closure of construction sites,” Bruno Le Maire recalled during a press briefing. alongside Prime Minister Jean Castex. “With all the measures we have taken, with the support measures, with the accompanying and simplifying measures, in particular for buildings and public works, we are aiming for a slowdown in activity that is half as much, by 15%”, said the tenant of Bercy.

“15 billion euros” in aid per month of confinement

To this end, he intends to devote a total of “15 billion euros” in aid per month of confinement in order to limit the failures of companies already weakened by the first wave of the coronavirus. “This confinement is a blow to all the businesses that will be closed as of tomorrow (Friday). I am thinking in particular of the 200,000 businesses that will be forced to close. We want to tell them that the economic support of the State will be even stronger than during the first confinement ”, assured, the tone serious, Bruno Le Maire.

Among the main measures announced to try to preserve SMEs, the solidarity fund for companies, which had been set up during the first confinement, will be reactivated and extended to companies with up to 50 employees, in order to compensate for closures linked to the reconfinement measures, he announced.

“All businesses and businesses that will be closed by administrative decision may receive compensation of up to 10,000 euros. This will no longer affect companies up to 10, but up to 50 employees, ”he said.

Will be released “about six billion euros for the Solidarity Fund, seven billion euros for partial activity”, “one billion euros for exemptions from social contributions, one billion euros to support a part of the rents of companies ”, explained the minister, detailing an addition which amounts to 15 billion euros per month.

Abandoned rent tax credit

In order to encourage the owners of commercial premises to show solidarity with their tenants, those who will give up “at least one month’s rent” between October and December for certain companies will benefit from a tax credit, he also ad. The companies concerned are those of “less than 250 employees” which “are administratively closed” or belong “to the hotel, cafes, catering, cultural sectors,” said Bruno Le Maire. Lessors will be able to benefit from a tax credit representing “30% of the amount of abandoned rents”.

The government has also shown the wish not to completely paralyze the activity of small businesses and restaurants closed because of health protocols linked to the re-containment. “The closed businesses as well as the restaurants will not be able to welcome the public but will be able to continue to operate for delivery activities and the withdrawal of orders”, declared the Prime Minister.

With all these measures, Bruno Le Maire estimated that the government had pushed “to the maximum” the “cursor of the protection of companies”, while keeping an eye on “the economic recovery on which will depend the rebound of 2021 and the exit of the crisis of 2022 ”. He therefore called on Brussels: “I called my European counterparts during the day, in particular the president of the Eurogroup and we want the European recovery plan to be adopted without delay”, he hammered twice. times.

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