11:00 p.m., December 12, 2020
It’s a little music that is rising, on the left as well as within the majority: we must rebalance the stimulus plan in favor of the most modest. While this plan will be examined from Monday in second reading by the deputies, the Montaigne Institute, in a note published on Sunday, feeds the debate. Where the government is injecting 100 billion into the economy, this liberal think tank suggests spending 30 more, from the start of 2021, in order to support the most vulnerable. “It’s an electric shock of consumption”, summarizes Julien Damon, co-author and professor at Sciences-Po.
According to INSEE, the poorest 10% of households feel the deterioration of their financial situation twice as strongly as the wealthiest 10%, who have retained their ability to save. “While the economy is only functioning at 90%, there is no other solution than to support demand, continues Julien Damon. To do nothing is to take the risk of seeing an increase in difficulties of the most modest, activity stagnate and debt accumulate. “
Three targeted measures
To restore purchasing power to those who have lost it due to short-time working, the fall in temporary work and the increase in layoffs, the Institute defends three targeted measures.
- First, 12 billion euros in consumer vouchers for recipients of housing assistance. Or, on average, nearly 450 euros per quarter, paid for one year to 6.6 million beneficiary households. Spending will be targeted on sectors affected by the economic slowdown, or where recovery is essential: hotels and restaurants, culture, transport, energy, construction, food, etc.
- Second idea: grant 17.4 billion euros in youth loans guaranteed by the State. Currently, the state only supports student loans, up to a limit of 15,000 euros. However, the crisis affects all young people, and in particular those who are neither in training, neither in studies, nor in employment. The institute therefore proposes to extend the system, in 2021 and 2022, to all under 25s and to raise the ceiling to 50,000 euros. Reimbursements will only take place once the professional situation has stabilized.
- Third measure recommended by the Montaigne Institute: grant 500 million euros in emergency aid to social action centers, which are aimed at a wider public than the only holders of social minima.
Read also – Recovery plan of 100 billion euros: and after?
Seven million households would benefit from these measures
In total, this massive program would affect seven million households, or 25% of French households: those whose annual disposable income fluctuates between 18,000 and 20,000 euros. “Distributing money to those who have saved does not make any sense, underlines Éric Chaney, former chief economist of Axa and economic adviser of the Institute. It is preferable to concentrate it on those whom one knows that they have it. will consume. “
This package would have a single financier, “the public deficit, which does not pose a big problem given our position on the financial markets”, continues Eric Chaney. The bet of the two experts matches that of the government: to boost growth. These 30 billion euros would make it possible to increase the level of activity by 1.2% from next year.
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