French economic recovery plan seeks to address youth unemployment
The French government will today unveil the details of a $118 billion national economic recovery plan.
The recovery proposal, which is expected to direct significant aid to domestic industry and small businesses, comes after France recorded a record 19% contraction last quarter. The plan will be accompanied by over $23 billion in tax cuts for French businesses from 2021-23 to promote domestic production and protect smaller businesses strongly affected by the pandemic.
The plan will also address a major short-term recovery goal in the reduction of youth unemployment—over 21% in June—via subsidised job contracts and incentives for businesses that hire young workers. President Emmanuel Macron’s government will expect business incentives to encourage more recently unemployed people to actively look for work, as France’s labour force participation rate (LFPR) dropped in July to the lowest point in a decade.
The unveiling of the recovery plan will come just days after the country recorded a post-lockdown daily record of nearly 5,000 new COVID-19 cases, primarily among people under 40 years old. While the recovery plan could incentivise modest improvements in France’s LFPR and unemployment in the coming months, expect its effects to be muted if cases continue to rise.
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