For the release of the Quarterly Bulletin on the Monegasque Economy *, the Government Counselor – Minister in charge of Finance and the Economy, Jean Castellini, the Government Counselor – Minister in charge of Social Affairs and Health, Didier Gamerdinger, and the Director of IMSEE, Sophie Vincent, presented the key figures (* cumulative data since January 1).

This meeting was an opportunity to assess the impacts of confinement on the economy and on employment in the Principality, and for Jean Castellini, to close on the issues of digital and the green economy.

The results of the economy for the 2nd quarter of 2020 (IMSEE) indicate an overall volume of trade, excluding France, which has halved and is back to a level slightly lower than that of 2016-2017. The decrease in purchases (-51%) is more marked than the one in sales (-37%).

At the end of June 2020, the Principality’s turnover, excluding financial and insurance activities, indicated a decline of nearly one billion euros (-13%) compared to 2019, also returning to its 2016 level.

It should be noted, during this period, a strong increase in the turnover of scientific and technical activities, administrative and support services (+ 354M €, or + 37.5%) as well as the construction sector, also slightly increasing (+ 2.1%). Accommodation and food services, on the other hand, is the most affected sector, showing a decline of almost 60%.

For financial sector, the total bank assets shows a positive change over the last twelve months (+ 2.2%), in particular thanks to an increase in the amount of loans granted (+ 8.3%), and to the deposits (+ 3.1%).

In the second quarter of 2020, inflows of around one billion euros, combined with the positive impact of market and currency effects, show an increase in the amount of assets under management on the period (+ 1.3%).

Overall, the economic figures are comparable to those of the countries within the European Union. The French GDP, for example, shows a contraction of -14%, and of -12.5% ​​for the GDP in Europe.

Jean Castellini recalled that the government remained vigilant, in consideration of parameters that could strongly impact the economy, such as the evolution of the health crisis, the uncertainties generated by job losses and more macroeconomic events, such as the Brexit or the American elections.

An uncertain context, but which at the state level ends up with a final amending budget of around 160-165M € instead of the initially deficit announced of 500M€.

In terms of its recovery, the state is continuing to put in place measures in favor of energy transition and digital transition, both essential to the resilience of the principality.

Jean Castellini, referred to the financing of aid and support for local businesses, through the “green” fund and the “blue” fund, which will enable these players in the Monegasque economy to succeed in this double transition.

“The idea is to conceive the state as a partner and facilitator state (…) which truly has a vision of transforming its economy, knowing to what extent green and blue funds are structural elements of our economy, and the future search for additional revenue, for a city-state which remains very dependent on the outside world and restrictions which at any time may weigh on the interconnections between the European Union, countries outside the Union and the Principality of Monaco. We must sustainably and digitallyincrease the territory of the Principality ”

Jean Castellini

The situation with which the Principality has been confronted this year having been quite special, Wealth Monaco wished to question Jean Castellini on a possible debt issue, notably through green bonds.

« Monaco is based on a balance between the absence of a structural deficit (we hope that 2020 will remain an exceptional year) and the absence of debt. Therefore it is difficult to justify today both from a technical and a political point of view, the issuance of debt.

On the other hand, at the level of the investments of the constitutional reserve fund, of the policy which can also be followed by banking establishments present in Monaco, the capacity to issue by these banks or for a fund (such as the reserve fund) and investing in these securities seems extremely adequate to me.

It is not currently considered by the state to issue bonds whether green or not.»

Jean Castellini

Article: Joana Foglia