Savings surplus of 157 billion: “The three confinements forced the French to give up consumption”

The level of savings “exceptional” observed since the start of the Covid crisis is “constrained savings” by confinement but it is also linked to “fear” a loss of income, explained Philippe Crevel, director of the Cercle de l’épargne, Wednesday, September 8 on franceinfo. The savings surplus of the French caused by the pandemic is estimated at 157 billion euros, according to an estimate by the Banque de France unveiled on Tuesday, September 7. This savings should not be “finger pointing” because she “serves to finance the economy through loans”, assures Philippe Crevel.

franceinfo: How to explain this savings, are they amounts that have not been spent on leisure?

Yes the three confinements and especially the first have forced the French to give up consumption, which is also the definition of savings. The French reduced their consumption because they could not go out, go to the cinema or to the restaurant and therefore it inflated savings, it is constrained, forced savings. There was also a movement of fear, anxiety linked to the fear of losing his job, of seeing his income fall, even if the public authorities quickly said that it would compensate for the effects of the crisis. This generated exceptional savings, as highlighted by the Banque de France.

Much of this money is on the passbooks?

It is mainly found on current accounts which were the first reception item for this savings. It is money put on hold. Today on current accounts, there are 500 billion euros. It is a fabulous sum. That’s 17,000 euros per household. And alongside the current accounts, there is also the livret A, the sustainable development booklet which collected part of this so-called “Covid” money.

Is this money useful or are they dormant sums that the French should be encouraged to spend?

We must of course stop pointing the finger at savings by saying that it would be unnecessary. Saving is already useful for you. It is thanks to savings that we will be able to plan, make investments, buy an apartment or a car. And then, it is not useless for the economy. Savings in banks are used for something, precisely to finance the economy through loans. Banks will be able to lend to businesses and individuals because there is money in the accounts. This savings makes it possible to finance the entire economy, whether it is the private actors or the State which needs money to finance “whatever the cost”. He will use part of what is left in the banks. Banks are not a safe, money circulates and is on loan. Obviously it is better that this money is invested in long-term investments, because it costs less to re-finance the real economy.

There are significant disparities. This phenomenon is more marked among the better-off …

The richest French spent the least, because it is they who have the largest leisure budget, who go on weekends. Logically, they have a higher savings potential than those who earn the minimum wage, who have significant compulsory expenses and few margins for saving. This translates the savings system back outside of crises, where the wealthiest 20% make the greatest “effort” in terms of savings.

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