France taps experts on how to pay off COVID-19 debt mountain

The French government is assembling an expert commission on how to repay the billions of euros it has borrowed to save the economy from the coronavirus crisis, Budget Minister Olivier Dussopt said on Tuesday, November 24.

Around a dozen people “with varying and highly experienced profiles” will be tasked with charting the post-COVID-19 course for France’s battered public finances, Dussopt told Agence France-Presse.

The list already features business leaders as well as top economists including Beatrice Weder di Mauro, a Swiss-Italian who has advised German Chancellor Angela Merkel.

President Emmanuel Macron, a former investment banker, has said he wants to avoid new taxes to cover the massive financial aid for businesses hammered by COVID-19 lockdowns and other restrictions since March.

While that remains the goal, “we want this working group to explore the matter and make its own proposals,” Dussopt said.

France has announced some 460 billion euros ($550 billion) in subsidies and state-backed loans for hard-hit sectors ranging from automakers and airlines to winemakers and small-business owners.

The government has also covered the bulk of salaries for employees forced to stay home during lockdown in a bid to limit outright layoffs.

As a result, France’s overall debt is expected to spike to 120% of its gross domestic product (GDP) this year, after falling last year to just below 100%.

Yet the economic recession – France’s central bank sees GDP falling some 10% this year, depending on how long new COVID-19 restrictions remain in place – will limit the government’s room for maneuver.

Macron is set to address the nation on Tuesday on the coronavirus fight, and is widely expected to let some stores reopen ahead of the year-end holidays as the number of new cases declines. – Rappler.com