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| - The French government said jobs were the number one priority as it prepared to unleash a mammoth spending plan for the coronavirus-hit economy on Thursday. Prime Minister Jean Castex promised 160,000 new jobs in 2021 as part of a recovery plan worth 100 billion euros ($120 billion), designed to help growth and employment at a time when daily virus numbers in France are on the rise again. "Relaunching the economy and fighting unemployment is the plan's priority objective," Castex told broadcaster RTL. The French economy has experienced its worst downward spiral since 1945, with gross domestic product plunging 13.8 percent in the second quarter, after a drop of more than five percent in the first. French companies will have bled a total of 800,000 jobs over this year, the government estimates. The budget boost, a combination of new spending and tax breaks, is four times the amount France spent over a decade ago to deal with the global financial crisis, and comes on top of hundreds of billions already spent in an early pandemic response. But the new stimulus is to go beyond the short term. "This plan is not just designed to dress the wounds from the crisis," Castex told Le Figaro daily. "It lays the ground for the future." President Emmanuel Macron had said previously that its emphasis on decarbonising the economy, improving corporate competitiveness and creating jobs would lay the ground for "the France of 2030". Economists have welcomed the departure from the kind of austerity measures seen after the 2008 crisis which were "a huge error," said Philippe Martin, who heads up the CAE think tank which advises the government. The economy saw a lively but brief rebound just after the end of lockdown measures in mid-May, but has since shown worrying signs of sliding back again. Much of the new plan targets the supply and investment side of the economy, namely businesses. The measures over the next two years include 35 billion euros' worth of help for the corporate sector, much of it in the shape of tax cuts. But Philippe Martinez, head of the leftist CGT union, faulted the government for failing to extract promises from companies that they would save jobs in return. "They gave money to Air France and Renault and for what? Job cuts. Is that what public money is for?" he said. Some 30 billion euros are earmarked for greener policies. NGOs have said this was too little, and called on the government to demand environmental commitments from companies in return for state help. "The government is presenting a recovery plan from a bygone era, much less green than it would seem," said Jean-Francois Juilliard, head of Greenpeace France. "There's nothing about cutting road or air traffic, nothing on any reduction of meat, egg or dairy production which would be needed to cut greenhouse gas emissions," he said. The government has resisted calls for specific measures to boost consumer spending, saying its heavy financing of partial unemployment measures had already done much to keep consumers' purchasing power intact. French households have accumulated 80 billion euros in savings since March, significant firepower if people could be induced to spend, analysts say. "The best way to support demand is to create jobs," Finance Minister Bruno Le Maire said during the plan's preparation. "The recovery plan should support France's recovery from the pandemic-induced shock," commented Kathrin Muehlbronner, a vice president at rating agency Moody's. She said the "reasonably large" package at around 4.5 percent of GDP would not change Moody's view on France's fiscal strength or credit profile. Opposition politicians meanwhile said the new money, which is part of France's 2021 budget to be voted on in parliament only at the end of the year, may come too late for many companies. "This should have been done before the summer," said centre-right LR party head Christian Jacob. mhc-jh/sjw/cdw
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