Paris         -    The French government said jobs were the number one priority as it prepared to unleash a mammoth spending plan for the coronavirus-hit economy.

Prime Minister Jean Castex promised 160,000 new jobs in 2021 as part of a recovery plan worth 100 billion euros ($120 billion), designed to help growth and employment at a time when daily virus numbers in France are on the rise again.

“Relaunching the economy and fighting unemployment is the plan’s priority objective,” Castex said.

“I hope that the recovery plan will create 160,000 jobs in 2021 that is our aim,” he told broadcaster RTL.

The French economy has experienced its worst downward spiral since 1945, with gross domestic product plunging 13.8 percent in the second quarter, after a drop of more than five percent in the first.

The government expects GDP for the 2020 to contract by 11 percent, and a total of 800,000 jobs lost over the year.

The budget boost, a combination of new spending and tax breaks, is four times the amount France spent over a decade ago to deal with the global financial crisis, according to the government.

It is separate from a 750 billion euro European Union plan agreed after acrimonious haggling in July, and comes on top of hundreds of billions already spent in an early crisis response during the first months of the pandemic.

Over the medium term the government has pledged to use the money to stimulate investment in green technologies, and help some economic sectors such as health care become more competitive.

“This plan is not just designed to dress the wounds from the crisis,” Castex told Le Figaro daily. “It lays the ground for the future.”

President Emmanuel Macron had said in the run-up to the stimulus plan that it would prepare “the France of 2030” with its emphasis on decarbonising the economy, improving corporate competitiveness and jobs.

Economists have welcomed the departure from the kind of austerity measures seen after the 2008 crisis which were “a huge error,” said Philippe Martin, who heads up the CAE think tank which advises the government.

This time, “the focus is not on public debt,” agreed Xavier Ragot, president of the OFCE economics institute.

The economy saw a lively but brief rebound just after the end of lockdown measures in mid-May, but has since shown worrying signs of sliding back again, while French virus infection rates are back on the rise.

Measures to prevent a feared second virus wave, such as mandatory mask-wearing at the workplace, are seen undermining the very confidence among economic actors that the government is desperately trying to restore.

Unlike the post-2008 crisis response, much of the new plan targets the supply and investment side of the economy, namely businesses.

The measures over the next two years include 35 billion euros’ worth of help for the corporate sector, much of it in the shape of tax cuts.

Some 30 billion euros are earmarked for greener policies. NGOs have said this was too little, and called on the government to demand environmental commitments from companies in return for state help.