Public debt should stand at 118% of GDP, estimated the Minister of the Economy, guest of the Grand Jury LCI-RTL-Le Figaro. Bercy initially counted on debt exceeding 120%. He also announced an agreement in principle with the EU on a new aid plan for Air France.
The health crisis that has lasted for more than a year now continues to plague public accounts. With the third confinement starting this Sunday, “we estimate the public deficit for 2021 at 9% instead of 8.5%», Declared Bruno Le Maire, the Minister of the Economy, guest of the Grand Jury LCI-RTL-Le Figaro this Sunday. As for the public debt, it should reach 118% this year. However, this is lower than the initial forecasts. In the 2021 budget, the executive forecast an explosion to 122.4% at the end of the year.
This further deterioration in the public deficit is not a surprise. Bercy has indeed just revised downward its growth forecast for this year to 5% instead of 6%, due to the closure of businesses deemed non-essential throughout the territory and the shutdown of schools in the coming weeks. And then, at the same time, the bill for public aid to businesses (partial unemployment, solidarity fund, exemption from social contributions) to cope with these new restrictions will again rise considerably. The Ministry of the Economy estimates the cost at 11 billion euros for the next four weeks.
See you in mid-May
“Today we have a few extra weeks where we all have to make an effort“, Specified the minister, who is always optimistic on the rebound of the French economy once the epidemic under control. “The country’s economic capacities are protected. This is what will allow us to bounce back very hard“, Underlined the tenant of Bercy, with reference to the rebound of 18.7% of the activity in the third quarter last year, after the end of the first confinement. “We have an appointment in mid-May. We will take stock of the health situation and the development of vaccination. If the conditions are met, we will see what types of activities can resume », He clarified.
New financial support for Air France
However, the hardest part is yet to come for the government, as some fear an explosion in bankruptcies and an unemployment rate around 10% this year, when emergency aid is withdrawn. Here again, the minister wanted to give reassurances. “It is a risk that is perfectly identified. We have not protected the economy and employees for 14 months now to let them down after the crisis, explained Bruno Le Maire. We will get out of “Whatever the cost” when health regulations are lifted and businesses and businesses can resume normal activity. ” No question, in fact, of cutting aid overnight. Bercy is working on the various options to support viable businesses in coming out of the crisis, which will be gradual.
Support will also continue for sectors of activity that will be durably affected by the pandemic, such as aeronautics, for example. Besides, “We have an agreement in principle with the European Commissioner (in charge of competition) Margrethe Vestager on new financial support for Air France», Announced the minister. “The amount will be discussed with Air France, there will be an Air France board of directors tomorrow which must validate the principle of this agreement.», Said Bruno Le Maire. And to specify: “ Air France must make efforts to improve competitiveness (…). We do not sign a blank check.“