Thomas More Institute
Europe our frontier
By Gérard DUSSILLOL, chairman of the Working Group Finance of the Thomas More Institute. Article published in "La Tribune" (France) of June 9th, 2010, available in French.
> Living Europe - on 30/03/2009
Due to the pernicious effets of the crisis, the angryness increases significantly in France. Should the French government re-adjust its strategy to face the crisis? Is the Prime Minister, François Fillon right to assert that he « will stay still »? Thomas More Institute is publishing a new Benchmarking note which aims at assessing France's strategy to face the crisis in light of the initiatives on the way in its European neighbors.
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On the 4th of December 2008, Nicolas Sarkozy unveiled a 26-billion-euro budgetary stimulus plan to which several measures were added on the 18th of February 2009 to boost purchasing power representing a total of 29 billion euros, 1.5% of the French GDP. France is in conformity with the norm set by the European Union but does not follow the recommendations of the IMF which strongly supports a stimulus accounting for about 2% of the GDP.
With 90200 additional unemployed people in January 2009 (representing an increase of 15.4% compared to January 2008) and negative figures expected in the coming months, employment appears as a top priority for the French population. Should we conclude that the government by only strongly supporting a plan boosting investments chose the wrong strategy to address the crisis? Is the French stimulus plan sufficient or new initiatives focused on employment are urgently needed? The debate centered around the efficiency of the plan touches on two elements: the overall amount of money dedicated to the stimulus plan and the type of measures already decided. Is France spending enough? Is France spending efficiently the financial resources allocated to the stimulus plan? By considering the measures recently taken to boost purchasing power, France' stimulus plan appears mainly focused on investments. Indeed, 77% of the resources have been allocated for this later whereas 5% and 18% have been respectively allocated to employment and consumption. Is this resource share sufficient or could it be improved? This question will soon be at the heart of the political and social debate in the next coming months.
To nourish this debate, it appears interesting to look beyond France borders to examine the various stimulus plans of France's European neighbors. Is there a clear consensus set on the types of recommended measures to face the crisis, does each member state make a different choice and if so why? This note presents the amount of money allocated by France's neighbors to their stimulus plans as well as the share between investment, employment and consumption including the different crucial measures decided. By taking into account the specificity of each member state, this benchmarking note aims at pinpointing for France several potential complementary measures to better face the crisis.
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Download below the Note in PDF (in French, 24 pages).