France’s government wants to help citizens and companies because of the high energy prices.
(Photo: REUTERS)
Paris France is responding to the consequences of the Russian war of aggression against Ukraine with state support worth billions for companies and private households. The “plan for economic and social resilience” presented by Prime Minister Jean Castex on Wednesday includes a reduction in fuel prices, relief for energy-intensive industries and help for companies with strong business ties to Russia or Ukraine.
The costs of the measures amount to around 25 billion euros. The government in Paris emphasized that, unlike the state support programs during the pandemic, this is targeted aid. Castex said it was about “protecting households and businesses from the immediate consequences.” At the same time, he warned: “We have to prepare for a long-lasting crisis.” The plan could therefore be expanded.
A central measure is aimed at companies where the energy bill is at least three percent of sales and who are therefore threatened with a loss in 2022. Castex promised them that the state would take over half of the additional expenses for gas and electricity. The chemical and metal industries are particularly affected.
The government is also planning additional state loan guarantees for companies. Companies that suffer from high energy costs or that have lost sales because of the war and sanctions in Russia or Ukraine can defer their tax and social security burden. The short-time working rules introduced during the pandemic will also be extended.
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The package of measures also includes the discount of 15 cents per liter of fuel announced a few days ago, which drivers will receive at the pump from April 1st. “The freight forwarders, the taxi drivers and the farmers also benefit from this,” said Castex.
package of measures before the elections
The fishing industry is to receive even more generous state aid until the end of July: This is about a discount of 35 cents per liter of ship diesel. The government also wants to help ranchers who are struggling with rising feed prices.
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For President Emmanuel Macron, his government’s aid package should also be a priority because he is running for a second term in the April elections. He is clearly ahead in the polls. However, he has to fear growing resentment because of rising fuel prices. In the past few days, farmers and fishermen had already protested against the price increases.
A decisive experience during Macron’s tenure was the so-called yellow vest movement, which began as a mass protest against rising prices for petrol and diesel. In autumn 2018, citizens in bright safety vests took to the streets for the first time against higher taxes on fuel. In the end, it seemed less about fuel prices and more about general social dissatisfaction.
Macron’s government had already tried in recent months to cushion the rising energy prices for French households. For many consumers, gas prices are frozen at the October 2021 level. Electricity prices could be increased by a maximum of four percent, and low earners also received a one-off government payment of 100 euros. These measures alone cost the state more than 20 billion euros.
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