This yellow vest period was very consuming in spending to compensate for the very significant losses due to the destruction caused by the demonstrations, the blockages paralyzing part of the economy, the lower income from fuel, etc.The amount of losses was estimated at 0.2 points of GDP, or more than 4.5 billion euros.
The cost of Covid is even much greater. The state was forced to take a whopping 140 billion euros out of its “pocket”. To this must be added 5 billion for vaccinations and tests in 2023 and 1.5 billion euros for 2024.
Fortunately, growth was stronger than expected, which brought an additional gain of 10 billion in corporate tax with a similar impact on VAT, i.e. 3.5 billion euros more.
With regard to inflation, losses are estimated at 1,320 euros per year per person, or nearly 9 billion euros over one year.
Energy costs which have soared, without support, businesses would have lost 59% of the 85% of aggregate losses linked to the rise in energy prices (gas and oil), this is 37% for households and 4% for administrations public.
That is, a loss of revenue for the state of 85 billion euros just for 2022, or – 3.2 points of GDP.
Supporting the war in Ukraine has already cost France more than 5 billion euros by the end of 2023.
Despite all these setbacks and unforeseen events, the economy has recovered, job creation has far exceeded that of the previous five-year term, i.e. more than 2 million jobs. So much so that most companies were unable to find new recruits. The unemployed, those on RSA too accustomed to “the comfort” of social assistance of all kinds, are disconnected from the job market, reluctant to change their “routines”, change profession, place of residence, habits. Through requests and recruitment assistance, 3% of unemployed people have returned to work. Category A unemployment increased from 10.1% in 2017 to 7.1% in 2022. Since all the latest upheavals it has risen to 7.5% in the first quarter of 2024.
The last “Chose France” summit on May 13, 2024, the 7th (created by Emmanuel Macron) in which 180 foreign bosses and 60 big bosses of French companies participated, generated 15 billion euros in investment projects. The EY barometer published in mid-May that France has been at the top of the podium for 5 consecutive years ahead of the United Kingdom and Germany, with a total of 1,194 investment projects launched in France in 2023 with 40,000 jobs. or maintained. It is true that the CIR (Crédit Impôt Recherche) attracts many projects.
Concerning companies, they achieved good to excellent performance during this period, particularly large groups, dividends have never been so important, but also the bonuses allocated to employees. LVMH has even become the world’s leading company.
On the startup side there is also euphoria, there are many champions of growth. The newspaper Les Echos counted 500, who achieved enormous performances ranging for the first, from 304% increase over one year, to 6500% over 3 years (2019/2022), to the 500th 9.35% over 1 year and 30.75% over 3 years.
The unicorns (more than 1 billion turnover not listed on the stock exchange) have also grown, 13 have passed the billion euros.
Investments and fundraising in French Tech have soared, especially for those active in Greentech. It was 5 billion in 2015, 11 billion in 2021, 13 billion in 2013.
France gained 2 million jobs between 2017 and the end of 2023, including 723,000 unemployed people who found work.
Unemployment thus fell over the same period from 10.1% to 7.1%, the lowest level since 2008. However, there are still 6,612,700 registered in the 5 categories while France Work and many employers are desperately looking for staff in almost all sectors of activity. For 6 months, demand has been less strong, mainly because of the real estate crisis since the increases in credit rates.
Going against the grain of what is done in almost all countries; increase the duration of activities, the two extreme parties want to reconsider retirement and increase departures to 60 years, officially for the new Popular Front, a little less now for the National Rally!
It is necessary to know that every year in less work is 60 billion lost in our economy.
The only retirement in 1982 going from 65 to 60 years old caused an annual loss of 300 billion euros (today) (more than 180 billion since 2017 end of the retirement system at 62 years old) in our economy, cause of around 80% of French debt.
Any reduction in working hours and activity will, in a very short time, lead to a fall in GDP and activity, an increase in unemployment and the deficit, and therefore the debt.
The FN’s proposal to reduce VAT could bring purchasing power, increase business margins and reduce direct tax revenues. But it could bring in VAT on additional purchases and on the individual and business tax surplus. An operation that could be worthless economically.
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