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Post-Covid Economy

France loses half a million jobs to Covid-19, urges faster return to activity

Restaurant owner watches Prime Minister announcing opening of cafés and restaurants on 28 May 2020.
Restaurant owner watches Prime Minister announcing opening of cafés and restaurants on 28 May 2020. Ludovic MARIN / AFP

France should speed up its gradual return to work and business activity, French Finance Minister Bruno Le Maire has said, as new data showed the country lost half a million jobs in the first quarter alone.

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"I want economic activity to resume more quickly," Le Maire told LCI television on Thursday, adding he wanted activity to be back to normal by this summer.

The government expects France - the eurozone's second-biggest economy -  to contract by 11 percent in 2020 and on Tuesday Le Maire told Parliament that 800,000 jobs were at risk.

According to data from the INSEE official statistics agency published on Thursday, France lost close to half a million private sector jobs in the first quarter alone, a drop of more than 2 percent. This was largely because short-term contracts were not renewed as the economy went into lockdown.

President Emmanuel Macron's government put France under one of Europe's most stringent lockdowns from mid-March, and only began lifting restrictions on 11 May.

Despite the grim figures, Le Maire refused to be defeatist.

"France is going to get there, it's going to recover and return to growth,” he said. “We can reduce (unemployment), we can rebound from 2021 if we push up our sleeves, get back to work and step up the recovery.”

"The quality of our employees, our infrastructure and industrial network makes us a great economic nation," he tweeted following the interview.

He said the car industry, one of the hardest hit, was already returning to normal with strong sales likely in June and July after selling almost no new cars during the lockdown. France has given carmaker Renault a loan of some 5 billion euros to keep the company afloat.

Helping the hardest hit individuals

Le Maire acknowledged that France also had a responsibility to help those who had been “fragilised” by the health crisis, citing people with few qualifications and those who risked losing their jobs.

“Those are the ones we need to help as a priority and I am open to all solutions,” he said.

Measures could include extending bonuses to encourage the hiring of apprentices and handing out cheques to the poorest households.

But he rejected introducing general measures such as a reduction in VAT, favoured by Germany, as a way of speeding up consumption.

To date, France has committed to financial support for low-income households and young people in difficulty.

President Emmanuel Macron is due to address the nation in a televised speech this Sunday to outline the next phase.

(with AFP)

 

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