Phillipe Dessertine is a French economist that has held several debates and televised talks over the years, and given the impact COVID-19 has had on the French economy, who better than to shine a light on the future of France than the man himself.
Of course, there have been several proposals put forward by the French Government, but the longevity of such measures remains in question.
Evidently, change is needed, but it must be the right type of change for the economy to thrive moving forward.
French Economy Could Take as Long as Two Years to Recover from the Pandemic
Talking on French radio station Europe 1, Dessertine confirmed the consequences of the crisis have been felt and will likely be felt for the next couple of years. This follows news from the Banque de France, which has a similar viewpoint.
As well as a drop in GDP, there is an expected rise in unemployment. Following this, it is likely that the smaller business will feel the pressure of the pandemic, so it creates a vicious circle that can be difficult to stop.
This can be attributed to using methods that are no longer as viable as they used to be, instead of focusing on new advancements that could introduce a series of benefits, including remote working and sourcing new talent.
Why Aren’t Tax Increases the Answer?
On paper, the increasing of taxes can seem like a proactive way of balancing the books, but given the reduced amount of people working, this may not be as effective as some would first assume. There is also the question as to what type of tax will be increased.
For example, VAT is a tax added to many purchases, and increasing this could mean that purchases are more expensive, which means the economy is affected in a different way.
Another factor of tax increases that need to be considered is how long they will be used for, if used at all. If tax increases are put in place but there are no guidelines as to how the funding should be used to better support the economy, then it could offer a spile as opposed to a long-term plan.
Is a Two-Year Economy Recovery Realistic?
For many, being able to recover from the pandemic could be too optimistic but can be achieved with the appropriate infrastructure in place. This could be in the guise of advice for businesses that need to adapt to new ways of working, as well as ensuring the technological infrastructure is the best it can be.
There are significant challenges that need to be faced moving forward, but embracing change and finding new ways of working, researching and delivering information allows for a more connected world that allows for more innovation, which can help improve the economy on a global scale as well as locally.