According to the latest estimates from Bercy, the measures announced yesterday by Macron and this new confinement, the third since the start of this epidemic will cost 11 billion euros per month.
It will be much more according to my forecasts. Here are some explanations.
First of all on the government side, “The total cost of aid and compensation for businesses rises to 11 billion euros per month,” indicates the Ministry of the Economy following the announcement of the reconfinement of the whole of metropolitan France. The health crisis has already cost 160 billion euros to the state.
No less than 150,000 establishments will be closed across the country following the generalized four-week reconfinement, specifies Bercy. The Ministry of the Economy estimates the overall cost of aid and compensation linked to the new measures at 11 billion euros per month.
This amount corresponds to the monthly expenses for the solidarity fund, partial unemployment and exemptions from charges ”.
A direct cost, therefore, but there are also indirect costs!
Short-time working will have to be paid, which will explode because companies are not going to put people into teleworking. They will put them on partial unemployment. Once, why not, but for the third time, companies have no patience. So either you take your RTT, your holidays or your vacation to look after your children, or you are partial unemployment. The use of partial unemployment will therefore probably be more important this time than during the previous confinements.
There will be exemptions from charges, of course, but these two elements for 11 billion do not take into account everything else.
The fact that companies will hire less and therefore more unemployment.
The fact that you are going to see companies whose turnover will drop because there will not be enough people to run the shops. Without hairdressers there is no hairdressing. Without a roofer, no cover. Without an electrician, no electricity, and if you babysit, you don’t work.
The fact that tax revenues will drop considerably.
The fact that the holidays will not take place, at least not really and that the tourism industry, already strongly affected, will not benefit from the Easter holidays even if the SNCF sells a few thousand more tickets, it will not be not a wave of tourists.
Finally, and this is the most difficult to quantify, the morale of the French has just taken a new hit on the cap. Everyone having enough and fed up, the end of the epidemic could be marked and should even be marked by a few months of euphoria including consumerists … but we are not there yet, and nothing says that we can have this great relief and therefore this big recovery for the summer which would be ideal in economic terms.
A 2021 deficit of 8.5% of GDP
For 2021, the executive forecasts a deficit of 8.5% of GDP. We will undoubtedly do more, and growth will certainly be less strong than expected, contrary to what the Governor of the Banque de France, whom I am talking about in this edition, is saying.
Remember the forecasts of Bruno le Maire, who explained to us learnedly that the impact on French growth of what was happening in China would be of the order of 0.1 point of GDP! I still laugh about it. Worthy of the 7th company and the pincer strategy.
We are therefore in the process of digging an already abysmal hole.
We are at 120% debt to GDP. We are going to add another 10 in 2021 and we will end the year with a 130% debt to GDP to within a few points.
For Italy it will not be better, far from it.
Spain, it lets the virus pass and lets the economy run.
The real question, the only question, is how France and Italy will pay these debts.
Anything is possible, including the butchering of these countries on the altar of a great European federal leap under German domination.
Everything comes at a time.
There is never, ever a free meal.
It is already too late, but all is not lost. Prepare yourselves !