The consequences of COVID-19 on the French economic sphere
Much more than a health crisis , the Coronavirus pandemic is likely to have unprecedented economic repercussions on a global scale. According to Christine Lagarde, President of the European Central Bank, “ Europe could experience a scenario reminiscent of the great financial crisis of 2008 ”. Indeed, between the slowdown in the economy following the closure of a good number of companies, the reduction in international trade with countries such as China in particular and the high French debt which is looming in the light of the measures taken by the government, the post-pandemic period is likely to be accompanied by great economic difficulties. With more than a quarter of the French population on partial unemployment, the situation is likely to be difficult when things return to normal.
So how is the situation likely to evolve in France but also on a global scale following this Coronavirus crisis?
An unprecedented health crisis
First of all, Covid-19 is not the first known Coronavirus . Indeed, the Coronavirus is a family of viruses which particularly affects animals but which can sometimes infect humans, as is the case today. These are viruses that cause different symptoms but mainly affect the respiratory and digestive systems, whether in humans or animals. It was in China, in the city of Wuhan , that this unknown virus of the Coronavirus family appeared.
It was initially its speed of spread that worried doctors. This unexpected spread of the virus, leading to an increase in serious cases, forced the authorities of Hubei province to put in place radical and unprecedented containment measures. However, these measures have not been able to prevent the global pandemic that we are facing. Quickly other Asian countries and then Europe were affected by the phenomenon.
The situation in France has evolved significantly over the past two weeks. Indeed many measures have been put in place, after the closure of all schools announced on March 16, 2020 , we are now in a situation close to total containment throughout the country. And although the government and companies advocate the implementation of teleworking and the closure of a minimum of establishments, today more than 25% of French employees must continue their activity remotely and more than 600,000 employees who find themselves in a situation of partial unemployment.
Many measures have been taken in France and continue to be toughened day after day.
- Numerous curfews have been introduced at the initiative of the mayors of certain cities throughout the country.
- Most of the country’s markets have also been closed in the majority of major cities.
- A new restriction has been put in place for exit permits , a measure accompanied by higher fines in the event of non-compliance with containment measures.
- The confinement time has also been increased by the scientific council which accompanies President Macron from 3 weeks to 6 weeks minimum.
A devastating economic crisis?
Many economists already feared an unprecedented economic crisis when China was the only country affected by the epidemic. Indeed, the containment put in place prevented a good number of Chinese from continuing their normal activity, which directly affected the country’s economy.
Now, this crisis is no longer national but international , and speculation about the economic catastrophe that awaits us continues to spread. The financial markets around the world have experienced an extraordinary decline, the CAC-40 has a level lower than before the 2008 crisis, falling in a few days from 5828 points to 3632 . Gold, which has proven to have a very little fluctuating value for several years, also fell with the arrival of the Virus. To avoid the collapse and bankruptcy of many companies , European governments and the European Central Bank have launched emergency plans . On March 18, the ECB launched a 750 billion euro program to help European countries. A more than considerable effort since slightly higher than that of the FED in our neighbors across the Atlantic. In France, President Macron has released 5 billion euros for medical research, and has pledged to pay a large part of the damage caused by this crisis on companies.
Among specialists, however, there remain different theories as to the post-virus period.
- For some, it will be total chaos, with a crisis much larger than that of 2008 with already disastrous consequences. A theory that seems to be confirmed in view of the recent confinement of 1.3 billion Indians and almost all European countries causing an unprecedented decrease in economic activity on a global scale.
Indeed, all sectors have been impacted, agriculture, industry, but also a large part of services. Major events for world tourism have in particular been moved, the Euro football, the Tokyo Olympics, a huge shortfall for the countries organizing these events for several years. The sports championships have also been postponed, even canceled and decisions are made every day to decide the future of the federations.
However, it is important to emphasize that these necessary measures are taken above all to prioritize public health.
- For other specialists, it is hope that remains. Although a financial crisis is inevitable , this crisis may turn out to be one of change . Indeed, as Joseph Schumpeter already mentioned in 1942 in his book Capitalism, Socialism and Democracy , it is sometimes necessary to have a clean break to launch progress and change : creative destruction.
And why not take advantage of this health crisis to bring about this change in both the economy and mentalities . Indeed, this health but also economic crisis can in particular propel entrepreneurs or SMEs who can continue to develop their project. In this, ESCadrille plays an important role, having helped dozens of entrepreneurs through market studies and business plans.
In France and throughout Europe, for example, mutual aid networks are developing, supporting medical services , of which here are two examples:
#Iwanttohelp from the civic reserve.
in the first line
Medical services which until then faced many shortcomings, both in terms of human resources and equipment. This crisis will surely make people aware of the importance of the budgets allocated to health , which until now were constantly being amputated year after year. In the same way, these confinements, which are becoming widespread, are proving to have a largely positive impact on the environment . The cloud of pollution above China , for example, has greatly diminished, while the Venetians have found the clear waters of their canals, which once made the city of Venice so charming.
It may finally be time to wake up . An awareness that will allow us to come out of this economic and health crisis more innovative , more conscientious , more responsible in the face of the problems of our time. Ecology , health , human resource management …
Moreover, it is a question of remembering that recessions and the adaptation necessary to get out of them are formative and make it possible to propel innovation. This was the case with the 2008 crisis, indeed many companies were able to adapt and impose themselves to overcome the difficulties generated by this crisis. At the time revolutionary startup, today daily tools, many applications have emerged thanks to the difficulties of 2008:
- Uber , a company that develops and operates applications for bringing drivers and users into contact with each other to provide transport services, which has launched an eponymous economic model, uberisation.
- Airbnb , community platform at the origin of the revival of the collaborative economy in our society.
- Slack , internal communication and project management software which is also used today in the context of the Coronavirus crisis to centralize the information and logistics necessary to fight the pandemic.
- Whatsapp , cross-platform communication application, which allows you to send messages internationally in a secure way.
Projects which, without the 2008 crisis and the needs it generated, might never have seen the light of day.
What if the coronavirus finally gave you the opportunity to launch your projects?
Indeed, this period of confinement is causing a wave of panic on the country, but if it was finally the opportunity to germinate your projects .
Indeed, the drop in activity, although worrying, leaves time to prepare new projects, and to deepen ideas.
It is to this extent that ESCadrille continues to support you during this period, thanks to a 100% digital study process which allows us to continue to support our customers directly online.
To find out more about our support, discover our solutions.
Do not hesitate to contact us to discuss the feasibility of your projects so that we can accompany you so that you become the Uber Manager of tomorrow?
The members of ESCadrille Toulouse Junior Conseil take advantage of this article to remind you that it is essential to follow the recommendations of the government. It is indeed by staying at home and following basic hygiene measures that you can save lives.
