France heading for worst recession since World War II due to pandemic, warns minister

French Finance Minister Bruno Le Maire warned a Senate panel on April 6 that the country is likely to see its deepest recession since World War II due to the pandemic. Le Maire said that France witnessed the worst recession since WWII during the global financial crisis of 2008 when the country’s growth slumped to -2.2 per cent.

Le Maire told the panel that France will probably witness a growth rate way beyond -2.2 per cent, indicating the amplitude of economic shock due to the pandemic. France announced a nationwide stay-at-home order on March 17 in order to contain the coronavirus but the outbreak has spiralled out since then with nearly 93,000 overall cases and 8,078 deaths in the country.

Speaking to a state-owned news channel, the 50-year-old leader said that France is proposing the creation of a European fund to boost investment after the ongoing crisis. He added that all European nations must restart at the same speed to guarantee the cohesion, solidarity and unity of the European Union.

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Last month, French national statistics bureau INSEE had predicted an annual cut of three percentage points in the GPD with every month of lockdown. It announced that the lockdown has already slashed the economic activity by 35 per cent which is worsening with every passing day.

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Financial measures

In order to support the economy, the government has given companies the option of deferring their social security contributions and direct taxes by adjusting their payment. The deadline of March 20 for 460,000 self-employed workers was automatically postponed for a month and the April 20 deadline has again been postponed.

“The same terms are applicable for employers and operators of the agricultural scheme in April, as well as for all employers paying monthly and quarterly who pay the supplementary pension contributions on April 25,” said the Finance Ministry in a statement.

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(With agency inputs) (Image credit: Twitter / @BrunoLeMaire)