France Economic Stimulus Package
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France economic stimulus package was declared in December 2008 to cushion impact of global economic crisis and ease undesirable effects of increasing lay-offs. An economic stimulus package to France worth $33 billion and spread over two years is mainly directed at increasing investments in infrastructure development and help recover their ailing automobile industry.
Automobile industry in France is a predominant economic activity since it engages over ten percent of France’s total workforce and hence is in need of an economic stimulus package for France. Newest France economic stimulus package is supposed to be spent over a period of two years.
This particular France economic stimulus package is different from ones that have been announced previously by French government. Those tried to increase consumption in order to deal with economic crises but this one is focusing more on automobile industry of France.
This economic stimulus package of France is designed to accelerate tax rebates and credits owed to companies thereby speeding up investments in infrastructure. In a televised address, French President Nicolas Sarkozy declared that France economic stimulus package is an effort of massive investment in response to a crisis and best way to do this is to support present day competitiveness and invest in future projects. He had taken this opportunity to caution managerial segment in taking this as an excuse to reduce their work force and restructure their organizations.
As per European Commission guidelines, not more than 1.5 percent of a nation’s gross domestic product (GDP) is to be allocated for growth. This France economic stimulus package is as per guidelines of European Commission. According to President Sarkozy’s plans, budget deficit of France is expected to rise to 4 percent of GDP as against 3 percent limit of European Union.
In this France economic stimulus package $13.7 billion has been earmarked for infrastructure development, $5.25 billion towards investment in state owned postal, rail and energy projects, and $1.31 billion for mobilizing their car credit market. An additional $2.36 billion has been allocated for building 100,000 homes to be made available to low income earners at zero interest loans. This package further aims at hastening payment of $15 billion towards investment credits.
