Macron is reconfiguring France but spares the construction industry

Can the French economy overcome the reconfinement?

Will the impact of containment be as strong as in the spring?

Last April, a month spent entirely under confinement, activity had fallen by more than 30% in France.

The impact should be a little less this time, the restrictions being less severe, with widespread teleworking as much as possible but an activity that will continue, especially in public services, factories, farms and construction, said the President of the Republic Wednesday evening.

In March-April, "we were caught off guard: we did not have masks, we were not organized, we did not have laptops for teleworking", also judge Selin Ozyurt, economist at Euler Hermes .

This time, companies and administration are better prepared to continue part of their activity during containment, with defined health protocols.

The construction sector and part of the industry should be less penalized.

"On the other hand, for sectors which are already weakened, such as culture, tourism, that could be a fatal blow," warns Ms. Ozyurt. Or for so-called "non-essential" businesses, including bars and restaurants, again closed during this re-containment.

These companies indeed enter this second confinement as "weakened bodies", also warned the boss of Medef Geoffroy Roux de Bézieux.

The Minister of Public Accounts Olivier Dussopt assessed on Wednesday morning the impact of a strict one-month reconfinement between 2 and 2,5 points of GDP on the French economy.

Containment is hard "but if it shortens the period of uncertainty and really limits the spread of the disease, the final effect may be less important than having semi-confinement as we now have for a period of extremely long time ", suggests Charlotte de Montpellier, economist at ING.

How to avoid the collapse of the economy?

With the curfew, the government had already strengthened a number of business assistance systems. Emmanuel Macron assured that the companies affected by this reconfinement would be helped.

The details of the measures will be specified later by the government but he mentioned partial unemployment for those who cannot work, a support of up to 10.000 euros for losses of closed businesses or a special plan for the self-employed, traders and very small businesses.

The support of 85% short-time work by the State (and Unedic) will be extended beyond November 1 when a company has no other choice but to put all or part of its employees on short-time work , also announced Tuesday evening the Minister of Labor Elisabeth Borne.

And Bercy is working on tax assistance to encourage landlords to reduce the rents charged to businesses, probably via a tax credit.

This will undoubtedly not prevent the bankruptcies of the most troubled companies, however predicts Charlotte de Montpellier because "we can not forever support the solvency problems of companies".

What will the cost be to the state?

According to Olivier Dussopt, a month of confinement represents "10 billion euros in intervention expenses". In particular, it is necessary to finance the payment of salaries via partial unemployment or to supplement the solidarity fund for companies, created in March.

The government had thought broad by budgeting these devices for the first wave. He had provisioned 31 billion euros in 2020 for short-time working, of which around 22 billion was spent. Likewise, 9 billion euros had been earmarked for the solidarity fund and about 2 billion remain available.

"If new health measures were to be taken in the coming days, we will propose (...) to increase the appropriations of the support mechanisms for our economy", the Minister of the Economy Bruno Le told deputies on Monday. Mayor during the examination of the draft Budget for 2021.

In total, since the start of the crisis, the State has mobilized nearly 470 billion euros, including about 60 billion in actual expenditure, the rest being guarantee measures. Spending which will widen the public deficit this year, expected at 10,2% of GDP, but which could increase further if new credits were to be released.

Castex specifies the reconfinement, the mask imposed from the primary

Massive teleworking, compulsory mask from 6 years old at school: the day after the announcement of a new confinement of at least one month, Jean Castex detailed Thursday to the National Assembly the radical measure decided by President Emmanuel Macron to counter a second wave of Covid-19 "arguably more deadly" than the first.

"We had anticipated the second wave", assured the deputies to the Prime Minister, who foresees a peak of hospitalization in November "higher than in April", during his intervention in the National Assembly, at the end from which he immediately left the hemicycle due to the knife attack in Nice which left three dead.

The end of the debates, demanded by the oppositions, was refused by the President of the Assembly, Richard Ferrand. "Precisely because terrorists attack our democracy, it is the honor of the National Assembly to continue to support our Republic", he justified himself, after observing a minute of silence.

Earlier in the morning, the Minister of Health, Olivier Véran, had estimated at "one million" the number of French people currently carrying the new coronavirus. And according to the president of the scientific council, Jean-François Delfraissy, the hospitals will face an "extremely difficult" situation in the coming two to three weeks, the time for the confinement to take effect.

Before the deputies, Jean Castex warned: "The virus is accelerating, we must also accelerate", recalling that "today, 60% of intensive care beds are occupied by Covid patients, that is to say twice as many as there are at 15 days ".

"I have not ceased to call for vigilance", the Prime Minister again defended, estimating that "some who tell us today that we should have acted, and stronger, or than we we were not doing enough, claimed at the time that we were doing too much ". "No country had predicted (that the wave) would accelerate in such a sudden and brutal way", he also argued.

Massive teleworking

The new confinement announced Wednesday by Emmanuel Macron must come into force Friday at midnight and will last until December 0, "at a minimum".

Three major changes have been put in place in relation to the spring containment: schools, colleges and high schools will remain open, work can continue, nursing homes and retirement homes can be visited.

First consequence: the wearing of a mask at school will be extended to primary school children from the age of 6, whereas it had until then been reserved only for college students, the Prime Minister announced on Thursday.

For workers, "the use of telework must be as massive as possible" during confinement, urged Jean Castex, specifying that "in the private sector, all functions that can be teleworked must be five days out of five" .

But for the number one of the Medef, Geoffroy Roux de Bézieux, the closure of non-essential businesses is "a mistake" which risks causing many bankruptcies and job losses, and costing "between 50 and 75 billion dollars. euros of GDP ".

In his speech, Emmanuel Macron had indicated that the device for closing shops would be reassessed every two weeks, depending on the evolution of the epidemic.

Events, cinema and live performance companies will also be closed for the duration of confinement, said Jean Castex, according to whom suspending these activities "is very painful but necessary to ensure the effectiveness" of anti-Covid measures.

"We authorize the preparatory work for the shows, the rehearsals, the recordings and the shootings in order to prepare the activities of tomorrow", he nevertheless specified.

The Goncourt Prize, which was to be awarded on November 10, will only be awarded if bookstores are open at that time, the jury announced Thursday.

Professional sports competitions will also be able to continue during this new period of confinement, the Minister of Sports said on Wednesday.

"Anger" and "responsibility"

After this speech of less than half an hour, the leader of the Socialists, Valérie Rabault, addressed a "yes of anger" to the reconfinement: a "yes of responsibility" to protect the French, but an "anger" against The government's “unpreparedness”, she lambasted. "Everyone can see that you are taken aback", added Jean-Luc Mélenchon (LFI). "A man decides everything, all alone, surrounded by this above-ground defense council," he said about Emmanuel Macron.

The boss of La République en Marche, Stanislas Guerini, replied curtly: "When we debate, you shout; when we do not debate, you cry: regulate your emotions, it will do us good".

The boss of LR deputies, Damien Abad, for his part indicated that his group would not take part in the vote, "so as not to add divisions to the country", while deploring also that "we [have] no more d 'other choice than that of reconfinement ".

The head of government still has to go to the Senate in the afternoon, then hold a press conference at 18 p.m.

If the reconfinement is planned on all the national territory, adaptations are however planned for the overseas, which have yet to be specified by the government.

"Whatever we do, nearly 9.000 patients will be in intensive care in mid-November, or almost all of the French capacities", warned Mr. Macron, while the resuscitation capacities will be increased to 10.000 beds, or a doubling of the initial number.

Reaction of construction professionals to new containment measures

CAPEB: Craft construction companies more than ever mobilized to maintain activity

The containment measures announced last night by the President of the Republic mark a hard blow for the French economy although necessary for the fight against COVID-19. However, the activity in the construction industry is maintained, always in strict compliance with health protocols. In this context, the Confédération de l'Artisanat et des Petites Entreprises du Bâtiment (CAPEB) is putting itself in battle order to help companies and building craftsmen in the application of these instructions and will ensure the proper implementation of the support measures deployed by the Government.

“The President of the Republic reconciles the health of our fellow citizens and the health of our businesses. Yes, this containment is necessary if we want to contain the pandemic. But the construction industry can and must continue! Our companies are fully mobilized in this direction. As in the first wave, the sector will once again demonstrate that its small businesses are responsible, agile, quick to keep the business going. We cannot envisage any further loss of turnover, when individuals are already showing fears about bringing craftsmen to their homes and that the activity of certain sites is shut down due to contact cases within companies. . Health safety obviously remains the watchword on construction sites, in accordance with the protocol set out in the OPPBTP guide. "
Jean-Christophe Repon, President of CAPEB

"If we are satisfied that the construction industry can continue to work, we nevertheless ask that our companies, which would suffer a loss of turnover (due to the refusal of customers to intervene or in the event of closure of the company due to COVID cases), can benefit from partial unemployment and our business leaders, aid from the solidarity fund. We are also asking for a shift in costs and an extension of the deadlines for public contracts and the deadlines for submitting qualification files. The survival of our businesses and the French economy depends on it. "
Jean-Christophe Repon, President of CAPEB