French Sub-Sovereign Governments’ COVID-19 Impact Mitigated by State and Strong Financials but Challenges Lie Ahead

The Coronavirus Disease (COVID-19) pandemic is putting financial pressure on local and regional governments across Europe. In France, sub-sovereign governments (SSGs) are being relatively less affected on the expenditure side, as healthcare expenditure is almost exclusively a central government responsibility. On the other hand, on the revenue side, the impact of COVID-19 is significant for French SSGs. Given the magnitude and still uncertain duration of the COVID-19 shock, some budgetary challenges lie ahead which will continue to affect French SSGs in coming years.