Growth of French economy slows in blow for Macron

The growth of the French economy has almost ground to a halt, new data revealed on Tuesday in a blow for President Emmanuel Macron.

Growth of French economy slows in blow for Macron
Photo: AFP

France's economy stagnated in the second quarter of 2019, growing by a lower-than-forecast 0.2 percent, largely to a slowdown in household spending, the national statistics office Insee said Tuesday.

Insee had predicted quarter-on-quarter GDP growth of 0.3 percent for the eurozone's second-largest economy between April and June, the same rate as in the first quarter. The result matches the forecast by the central bank, however.

Consumer spending on goods and services both grew at a slower pace, despite President Emmanuel Macron announcing several measures in April to try allay “yellow vest” protests over spending power.

There was good news on the investment front, however, with business investment rising 1.2 percent, up from 0.7 percent in the first quarter.

The figures cast doubt on the government's ability to reach its target of full-year growth of 1.4 percent.

Last year, the French economy grew by 1.7 percent, down from 2.3 percent in 2017, a fall that was also attributed to weaker consumer demand following weeks of often violent demonstrations over Macron's economic policies.

The “yellow vests” — so-called because of their signature high-visibility vests — began occupying traffic roundabouts in November over a planned hike in fuel taxes. The movement ballooned into a broader revolt over inequality, marked by weekly demonstrations in big cities that regularly turned violent.

The protests have shrunk in size since the government announced a series of measures to boost the earnings of the working poor and cut taxes.

The government has also linked the slowdown to flagging growth in the eurozone and trade tensions with the United States.

“The global context is not very favourable, which of course weighs on the French economic climate,” Emmanuel Jessua, an economist at the Rexecode economic institute in Paris said.

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Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.