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France’s Macron vaunts stimulus spending as election looms

Published: Updated:

French President Emmanuel Macron was among the first European leaders to deploy a massive public spending plan to fuel a recovery from the COVID-19 pandemic. With little more than seven months to go to elections, his government is launching a campaign to show it’s actually working.

Macron’s Prime Minister Jean Castex will attend an industrial salon in Lyon and visit factories in the surrounding area on Monday to mark the first anniversary of the 100 billion euro ($119 billion) France Relaunch program.

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Its initial aim was to deliver a rapid economic impact and help bring production back to the France, particularly in former industrial strongholds. The government has already credited the plan with helping to put the economy on a path toward 6 percent growth this year and bring unemployment down to 8 percent, slightly below pre-crisis levels.

“The results go beyond the most optimistic expectations -- not only have the main risks of the crisis been contained, but in just a few months out country has recovered its dynamism, Castex said in a report detailing the progress of the stimulus plan.

But officials speaking on the condition of anonymity ahead of Castex’s trip said the government is concerned by the gap between the headline numbers and how the impact is resonating in regions.

In an effort to change that, the Castex will cite figures showing it has already committed nearly half of the funds in a year and targets 70 percent by the end of the year. The government will also say state aid for industry has supported 8,885 companies with efforts to modernize production, helping to support 231,000 jobs.

In the coming weeks, Macron is also due to present another investment plan, less targeted on stimulating the economy and more focused on fostering the emergence of new sectors such as hydrogen and artificial intelligence.

In October, Benoit Coeure, a former European Central Bank Executive Board member who now heads the Bank of International Settlement’s Innovation Hub, is due to deliver a report on the macroeconomic impact of Macron’s efforts to fuel the recovery.

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