UK presents 33 billion euro stimulus package

Rishi Sunak, the Chancellor of the British Exchequer, presented on Wednesday July 8th a great stimulus plan, the invoice of which will rise "Up to £ 30 billion" (33 billion euros). Return-to-work bonus, reduction in VAT for six months on hotels, bars and restaurants, home insulation assistance, tax gift on property purchases, rebate system for all in restaurants, etc. want very concrete and almost immediate, most expiring in early 2021.

The United Kingdom is one of the economies most affected by the containment, which has been longer than elsewhere. England did not reopen its pubs and restaurants until Saturday 4 July, while Scotland and Wales have not yet done so. The recession will be around 10% (- 0.2% according to the IMF, – 11.5% according to the OECD), among the worst countries with France, Italy and Spain.

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The British government reacted by presenting one of the most interventionist aid plans in the world, with total measures equivalent to 25% of GDP even before the plan of Wednesday July 8, according to BNP Paribas calculations (against 47% in Germany, 21% in France and 15% in Spain). The first step was to keep the economy afloat during containment, creating a system of short-time working and increasing cash payments to businesses. On Wednesday, Mr. Sunak announced a second step that has priority: maintaining employment. A third stage, devoted to the reconstruction of the economy, will be presented later, probably in the fall.

Partial unemployment ends in October

"I will never accept that unemployment is inevitable"said Sunak to a half-empty House of Commons due to social distancing. For this, it confirms – and this is no small paradox – the end of the partial unemployment system in October.

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This system, which did not exist in the UK before the pandemic and covers 80% of the salary, is currently used by 9.4 million people. "But the truth is that asking for its permanent extension would be irresponsible, continues the chancellor. (…) It would give false hope to people who think they can return to their jobs. And the longer people are on partial unemployment, the more they risk losing their skills and the more they will find it difficult to find a new chance elsewhere. "

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