French PM Castex details Covid-19 crisis response in speech to parliament

France’s newly appointed Prime Minister Jean Castex detailed his plans to foster recovery from a bruising recession and revamp a controversial pension reform as he laid out his political roadmap in an address to the National Assembly on Wednesday.

Castex’s speech, his first major test since his appointment earlier this month, comes a day after President Emmanuel Macron promised to ramp up the country’s Covid-19 rescue package and subsidise hirings for youths in a televised interview marking Bastille Day.

Jean Castex addressing France's National Assembly on July 8, 2020.
Jean Castex addressing France’s National Assembly on July 8, 2020. © Christophe Archambault, AFP

Despite billions of euros pledged to minimise the economic damage caused by the virus, questions remain over how Macron’s administration will foster recovery from a recession expected to destroy hundreds of thousands of jobs.

“The crisis has confirmed that we must now transform our industry,” Castex told lawmakers, stressing that the fallout from the pandemic had underscored the country’s over-dependence on imports.

A 100-billion-euro ($114 billion) economic recovery package, to be rolled out on Friday, will include 40 billion euros in support for domestic industry and services, he said, promising to “slash taxes that hold back companies’ productive capacities”.

Castex announced “massive” investment in state-funded research over the next decade, to the tune of 25 billion euros. He said the state would pump money into industry and green technologies, stating: “I believe in green growth (…), not degrowth.”

The rescue plan will include 20 billion euros for climate-related investment, including wider use of electric bikes, stimulus for local food suppliers, urban renovation and mass renovation of older buildings. Another 40 billion euros will go to overhauling strategic French manufacturing sites.

“It is up to us to reconcile the environmental transition with purchasing power,” Castex said. “Fighting unemployment will be our absolute priority over the next 18 months.”

French small businesses fear mass bankruptcies in the months to come because of the sharp drop-off in tourism, and among measures to support them is a new ban on new shopping malls in French suburbs, the prime minister added.

Pension reform ‘necessary’

Casting himself as an advocate of “social dialogue”, Castex said he would invite all business and trade union leaders for talks on Friday aimed at establishing “a method and a timetable” for future reforms.

Those talks are likely to focus on a controversial pension overhaul that was suspended at the start of the pandemic after triggering France’s longest strike transport strike in decades. Echoing Macron’s words on Tuesday, Castex said the proposed reform remained “necessary” but that aspects of the texts would be renegotiated.

The incoming premier also touched on plans to prepare France for a possible second wave of the coronavirus pandemic, which has already killed more than 30,000 people and is showing early signs of a resurgence two months after the country’s exit from lockdown.

He said France would ramp up testing and tracing efforts and expand the use of protective face masks, a day after Macron called for masks to be made compulsory in enclosed public spaces as of August 1.

The French president’s choice of a low-profile civil servant as his new prime minister has prompted new criticism that the centrist leader is seeking to consolidating power after being increasingly overshadowed by Castex’s popular predecessor, Édouard Philippe.

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