French government puts climate action at heart of €100bn stimulus package, as Germany successfully delivers first sovereign green bond
The EU's two leading economies, France and Germany, have this week drastically beefed up their green recovery plans, earmarking billions of Euros for a new wave of green infrastructure projects and emissions reduction programmes.
French President Emmanuel Macron this morning unveiled the government's much-anticipated coronavirus stimulus package, promising to invest €100bn over the next two years - equivalent to four per cent of GDP - in an attempt to combat the worsening coronavirus-induced recession.
Building on previous promises to engineer a 'green recovery', the package has climate action at its heart with €30bn earmarked to support the clean energy transition, a further €15bn focused on boosting innovation and the relocation of "strategic technologies", and €35bn targeted at making the French economy more competitive.
Speaking this morning, Macron stressed that climate action and clean technology was central to the new plan. "The future of hydrogen, recycling, quantum, the future of the green, circular and decarbonated economy must, with this plan, be written in France," he said.
Dubbed "France Relaunch, the plan will also focus on job creation and training initiatives as the government attempts to head off one of the worst economic slumps in history.
"This recovery plan aims to keep our economy from collapsing and unemployment exploding," Prime Minister Jean Castex said on RTL radio, adding that the government aimed to create at least 160,000 jobs next year under the plan.
The funding will support a wide range of projects with green upgrades to industrial plants, buildings, and transport networks to the fore.
For example, a major rail upgrade and electric vehicle charging infrastructure programme is planned, while €6bn is earmarked to upgrade the efficiency of homes and public buildings.
Similarly, the nascent hydrogen industry will receive a €2bn boost over the next two years, while the government reiterated its recently announced plans to step up investment in green aviation R&D.
The unveiling of the French plan follows confirmation earlier this summer that the German government is to invest €40bn in green projects as part of its €120bn stimulus package.
The German plan took a major step forward yesterday with the successful launch of the country's first sovereign green bond, which raised €6.5bn from the 10-year bond, after investors queued up for over €33bn.
"With today's issue of the government's first green bond, we have taken an important step towards significantly strengthening Germany as a sustainable finance location," German deputy finance minister Joerg Kukies told Reuters.
A further bond issue is now planned before the end of the year, as Berlin looks to raise €11bn this year to help make good on its pledge to spend €54bn on climate projects through to 2023.
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