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

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.

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".

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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.

Touching on another theme that has recently climbed up the president's agenda, Castex announced forthcoming legislation aimed at “combating separatism”. He stressed that the fight against radical Islamism would be a priority for his government.

>> Critics say choice of Castex as new PM reveals a Macron power grab

Macron'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.

Like Philippe, Castex was plucked from the ranks of the conservative Les Républicains party, cementing the government’s increasing rightward tilt.