For two days, ministers, business leaders, economists and academics worked in Aix-en-Provence as part of the twentieth Economic Meetings to draw the avenues that will allow a quicker exit from the crisis. Result: the government’s stimulus plan must be completed in order to restore the confidence of households to use “their savings to invest and consume more”, according to the Circle of economists who made ten proposals to this end on Sunday.
“We need a demand relay”
The French have accumulated savings of 85 billion euros due to the health crisis, which could reach 100 billion at the end of the year. The 100 billion euro stimulus plan “is a supply plan and we need a relay of demand”, declared at the conclusion of two days of debates in Aix-en-Provence Jean-Hervé Lorenzi, president of the Circle of economists.
“The recovery will only take place if a dialogue is established between this new dynamic of companies and confidence in the future found by households”, according to the final press release of the Economic Meetings which brought together dozens of researchers and business leaders.
Among the proposals, give remuneration “up to the RSA for young people at the end of their studies and with limited means”, and “put in place a housing policy for young people, in particular by abolishing VAT for the first purchase”.
Universal allowance and ambitious housing plan
Economists also want “the creation of a single universal allowance which brings together all the existing social benefits”.
“There will be a lot of social plans in the coming weeks”, warned Raymond Soubie, former adviser to Nicolas Sarkozy and president of the social strategy consulting firm Alixio, who said “very, very worried”, while “we are in a very flammable society”.
The Circle of economists still calls for generalization “participation, incentive and shareholding mechanisms” and to give “to employees 30% of seats on boards of directors”.
For innovation, economists want the creation of research agencies at European level for defense, energy, digital technology and health, on the model of what exists in the United States.
“The Covid was an indicator of the deindustrialisation of France”, judged Philippe Aghion, member of the Circle of economists and professor at the College de France.
Strengthen the equity capital of SMEs
Economists also plead for the application of a carbon tax at borders in order to implement a European ecological policy.
He therefore estimated that the three billion euros allocated by the recovery plan to strengthening the equity capital of SMEs “it is very insufficient, it is rather towards 10 billion euros that we should go”.
For businesses, the economists meeting in Aix suggest“go much further than the stimulus plan on the amount of instruments for transforming debt into quasi-equity”, and “to align production taxes with those practiced in Germany”.