France’s Europe Écologie les Verts (EELV) has released an article highlighting the ineffectiveness of the French government’s recent policy intervention on reducing the tax on donations and the insufficient funding by the France government towards the economy’s ecological transition towards sustainability in line with the 2015 Paris Agreement(1).
Their concerns were raised in response to the government’s newest response measures aimed at promoting spending and strengthening the local economy in light of the numerous detrimental measures placed on it by this pandemic.
During this past year of the COVID-19 Pandemic (2020) the savings of France’s citizens is estimated to have increased by more than 200 billion euros (a household savings of 22.18% by the end of the year(2)). The new government intervention is being implemented to mobilize these funds, taking the form of a reduction in taxes on donations in hopes to direct this ”savings on to the younger generations to encourage their consumption”(Eva Sas and Alain Coulombel of the EELV).
EELV identifies that this measure will only bring increases to inequality by reducing the taxation of inheritance for wealthier families. ”Nearly 70% of the additional savings were made by the 20% of the richest households” according to Europe’s Council of Economic Analysis. In addition, the proposed policy promotes consumption that is not explicitly redistributed within the local economy.
The EELV’s proposed alternative to address this increase in savings is to utilize this opportunity to push for the country’s thermal renovation plan, outlined in France’s recovery plan ‘France Relance’.
The thermal renovation plan, as per France Relance, will allocate 6.7 billion euros towards thermal retrofitting public households and private buildings. Grants to be distributed via local authorities.
Due to the unique opportunity of the country’s citizens possessing this additional 200 billion euros, the EELV proposes the idea of further promoting the thermal renovation plan currently identified in France Relance to have some of this 200 billion in savings be mobilized towards meeting the countries renovation goals, while also increasing the effectiveness of the currently insufficient 6.7 billion euros allocated to this operation.
The measures taken in this way out of the crisis cannot be only cyclical. They must engage France on the path of ecological transition. The mobilization of savings must serve this objective.
Eva Sas and Alain Coulombel, spokesPeople of EELV
To mobilize funds in this way will not only keep the funds within the country via labor and project operations (local economy), but also promote the agenda of the France Relance in ”Supporting the transition to a greener, more sustainable economy”.
To look further into the France Governments phase 3 of the Pandemic recovery plan or ‘France Relance‘, click here
(2) – https://tradingeconomics.com/france/personal-savings
