The pandemic leaves 10 million people unemployed, looking for state aid

The situation from the US seems to repeat in France. More than 10 million people are now unemployed due to the pandemic.

FRANCE: today, the labor minister, Muriel Penicaud, announced that more than 10 million people are on partial unemployment benefits having part of their salaries paid by the state. It is more than half of the French private sector workforce. The French approach to the unemployment situation is the most open-handed in Europe. The state covers 84% of the salaries of partial unemployment. Besides the employees under fixed-term, long-term, and internship contracts, now, the daily and hourly rate workers can take advantage of the partial unemployment benefits.

Like any other significant economic power in the world, when the pandemic started, France tried to help its economy. Mid-march, the French Finance Minister Bruno Le Maire, announced an aid package worth €45 billion to help small businesses and other sectors of the economy. At that time, more than 3.5 million firms expected to be hit by the confinement measures. The stimulus package meant a reduced social security contribution for €35 billion. €2 billion were for shopkeepers and self-employed people, while €8.5 billion were for unemployment benefits.

Analysts forecast a drop in GDP of 1% and also a recession in 2020.

Last week, the Macron government increased the aid package to €110 billion and extended the lay-off program. This comes after the hospitality and construction sectors closed. Moreover, the government committed to back low-rate loans of almost €40 billion. Approximately 251,000 businesses will receive €140,000.

The pandemic majorly impacted the financial sector; since January 24, when the first case emerged, France40 index decreased. The most significant drop in its history was on March 12, when it lost 12.3%.

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Sources: france24.com, thelocal.fr, politico.eu, forexlive.com, cnbc.com

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Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance is not a reliable indicator of future results.