LONDON - France unveils on Wednesday (June 10) its third updated budget this year, as the country struggles to adjust to the economic impact of the coronavirus pandemic.

But the French government is also seeking to achieve much more: it wants to direct financial resources towards the revival of France's industrial competitiveness.

Mr Gerald Darmanin, the Budget Minister, is the bearer of grim financial news. His adjusted budget assumes that the French economy will shrink by around 11 per cent this year, after growing by around 1.9 per cent last year.

The government's budget deficit situation is particularly dire. Last year, France succeeded in shrinking its budget deficit to the equivalent of 3 per cent of gross domestic product (GDP), a significant milestone, since it meets one of the legal and pan-European requirements for the operation of the Euro single currency.

But the pandemic has administered a blow to this effort; Minister Darmanin is now warning of a "vertiginous" increase in France's budget deficit, which may go up by whopping total of 8 per cent of GDP, a rise rarely experienced in any developed country, apart from during wartime.

Some of this overspend is due to the French government's decision to implement a costly "temporary unemployment" scheme which took over the payment of salaries of those who would have otherwise been laid off work.

The scheme was successful in keeping down official unemployment figures. But it ended up supporting no less than 10 million employees, more than half of France's entire private sector workforce.

The budget minister is proud of this achievement. "We are more and more indebted because we made that choice", Mr Darmanin said, claiming that the government's actions "saved the economy" and offered a "guarantee to help small traders".

But although the French temporary unemployment scheme is like that offered in most other European countries, its sheer scale may be end up being very different.

In Britain, for instance, the government was pleasantly surprised to discover that its scheme proved to be much less costly than initially anticipated, mainly because those who ended up claiming government salary support were the lesser skilled and therefore the least expensive workers.

But in France, the uptake for the scheme is far bigger and, since French employment legislation is far less flexible, there are real fears that, when private enterprises fully resume their operations, employers may be reluctant to hire back all their previous workers, leaving the French state with both a higher bill in social benefits and a higher unemployment rate.

Still, all eyes will be on the French government's plans to kick-start the economy and how much these are likely to cost.

President Emmanuel Macron and Prime Minister Edouard Philippe have spent the past week in discussions of this subject with employers' federations and trade unions. Many of the measures about to be implemented are predictable, involving further efforts to protect France's all-important hospitality sector of restaurants, cafes, and tourism.

But some are less usual, such as the decision to allocate 8 billion Euro to the Renault car manufacturer and other French companies in the motor industry.

Under normal conditions, such financial support for a national industrial sector may have encountered stiff opposition from the European Commission, the European Union's executive body, which is tasked with ensuring the operation of the continent's single market.

But these are hardly normal times, and the Commission confirmed that the French bailout is in line with new relaxed state aid rules. "Renault is an important European car manufacturer, employing directly more than 73,000 workers in Europe", EU competition chief Margrethe Vestager explained.

A further 15 billion Euro aid package for France's aerospace industry has also just been announced.

Many additional measures to help specific French economy sectors will be unveiled by the end of this month, after the delayed round of France's local elections finally takes place.

And the pressure to lavish more state cash seems never-ending, especially after neighbouring Germany - until now Europe's most careful spender - unveiled a massive 130 billion Euro stimulus package for its own economy.

So, for the first time in decades, the French government's natural tendency to borrow heavily and spend taxpayers' money on protecting national industries seems to be in accord with the mood throughout Europe.

And that is clearly an opportunity which President Macron is unlikely to miss.