Prospects for French economy are good for 2022 despite Omicron shadow
The spread of the Omicron variant of coronavirus will not paralyse France's economy, Minister for Finance Bruno Le Maire has said. Instead, he forecast a growth rate of 4 percent for 2022.
Issued on:
He also said the government would extend access to aid for businesses suffering from Covid restrictions and loss of revenue.
"I am very confident for French growth," Le Maire told Le Figaro newspaper in an interview published on Tuesday.
He said the highly contagious Omicron variant is likely to have only a "slight" impact on the French economy, despite the daily rate of infections hovering around 200,000 per day since Christmas, creating disruption as workers filed sick leave.
Le Maire forecast a growth rate of 4 percent for 2022, above the 3.6 percent forecast by the Banque de France estimation on 19 December.
He added that growth had reached 6.7 percent in 2021, more than the 6.25 percent previously forecast.
The budget deficit for 2021 would be a "significantly lower 8 percent (GDP) than the 8.2 percent previously projected," due to an increase in fiscal revenue, Le Maire said.
Extension for loan payments
After meeting representatives from employers' organisations, and the tourism, hotel and restaurant industries on Monday, Le Maire said the government would extend access to aid for businesses suffering because of anti-coronavirus measures.
Companies will now be allowed to spread out the repayments of their state guaranteed loans (PGE) across 10 years, as opposed to six years, and push back their first payment until the end of 2022 instead of in March.
He estimated the number of companies in this situation to be "between 25 and 30,000 very small companies; often shop owners, tradespeople and restaurants," he told RTL radio on Tuesday.
"The state guaranteed loan managed to save thousands of businesses and we mustn't see them go under when it's time to repay the loan.
"I have validated all of this with the European Commission, the governor of the Banque de France and the French banking federation, with whom I will sign an agreement early next week," he said.
'Room to move'
In all, 697,000 businesses have taken out a PGE state loan since March 2020, totalling €143 billion, according to government figures.
Le Maire said that all companies affected by anti-Covid restrictions would benefit from a "part-time activity" package and that the conditions for accessing this would be easier.
"All businesses which had lost 65 percent of their revenue - instead of 80 percent previously - would be eligible for the full reimbursement of part time work.
The mechanism in place to reimburse overheads, until now reserved for a limited number of companies (such as events, indoor leisure centres, caterers), would now be extended to cover all businesses operating in the tourism sector, including hotels, bars, restaurants and travel agencies.
Companies applying for funds under the scheme will need to show they had lost at least 50 percent of their revenue, compared to 65 percent in the previous system.
Le Maire also promised that he would speed up refunds for sums under €50,000 in the coming days.
The newly announced financial aid package would "not create problems" for the budget as the government had, he said, spent less than expected.
"We have precisely €1.8 billion remaining in the emergency funds which have not been used, that gives us elbow room," he insisted.
Further measures concerning the exemption of social security charges for businesses that had lost revenue were still to be discussed in the coming days.
Bruno le Maire also said he would follow up on the Prime Minister Jean Castex's promise to cap the tariffs on electricity at 4 percent in 2022.
Daily newsletterReceive essential international news every morning
Subscribe