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France finance minister sees stimulus top-up decision in September

FILE PHOTO: Launching of the 2020 income tax campaign in France

PARIS (Reuters) – The French government will take a decision in September on whether to top up its 100 billion euro ($120 billion) economic stimulus plan, French Finance Minister Bruno Le Maire said on Thursday.

President Emmanuel Macron eluded last week to a “second period of recovery” that would see investment accelerated, triggering speculation in the press and among economists that a second round of stimulus was in the pipeline.

His European Affairs Minister Clement Beaune, formerly a close advisor to Macron, has been even more explicit about calling for a second Europe-wide stimulus plan.

However, Le Maire has been more circumspect and had so far emphasised that the most important thing was to ensure that already budgeted stimulus projects get rolled out.

“Time for decisions will come in September. In September, we will see what sort of economic situation France and Europe are in and we will see whether some budgets need extra spending because the economic situation merits it,” Le Maire told a news conference.

Former IMF chief economist Olivier Blanchard and Jean Pisani-Ferry, the main economic architect behind Macron’s 2017 election campaign, said in a research note https://geopolitique.eu/en/2021/05/06/an-economic-strategy-for-the-next-phase that the government should plan on a further 40 billion euros for the years of 2022-2023 after the current stimulus package runs out.

France has already disbursed 30 billion euros from its recovery plan since it was launched last September with spending focused on a range of public investments in environmentally friendly projects and measures to boost French firms competitiveness.

Le Maire said that the money had helped France see stronger economic growth than most other euro zone economies in the first quarter when the French economy grew 0.4% despite various COVID restrictions.

He added that that gave him confidence that a growth target of 5% for this year could be met.

(Reporting by Leigh Thomas; Editing by Toby Chopra)

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