Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure FR-2020-10/570 – Updated – measures in France
|Country||France , applies nationwide|
|Time period||Temporary, 01 March 2020 – 31 December 2023|
|Context||COVID-19, War in Ukraine|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Frédéric Turlan (IRshare) and Eurofound|
|Measure added||13 April 2020 (updated 25 July 2023)|
The government has implemented an exceptional guarantee scheme to support bank financing for businesses, amounting to €300 billion. Until 31 December 2021, companies of all sizes, whatever their legal form, were be able to apply to their usual bank for a State-guaranteed loan to support their cash flow. This loan may represent up to 3 months of 2019 turnover, or two years of payroll for innovative companies or companies created since 1 January 2019. No repayment will be required in the first year. The company may choose to amortize the loan over a maximum of five years. The scheme, called PGE Covid-19, has been extended until June 2022. The scheme has also be relaunched in February 2022 under the name of PGE Résilience, to help companies facing economic problems related to the war in Ukraine. This scheme runs until 31 December 2023.
The loans covered by the guarantee must comply with specifications defined by order of the Minister of the Economy. They include a minimum twelve-month grace period and a clause giving the borrower the option, at the end of the first year, to amortize them over an additional period of up to five years.
The banks undertake to examine all applications submitted to them and to give a prompt response. They undertake to distribute State-guaranteed loans on a massive scale at cost price to relieve the cash flow of businesses and professionals without delay.
Nevertheless, all companies, particularly the largest, which do not meet their obligations in terms of payment deadlines, will not have access to this State guarantee for their bank loans.
In addition, French banks have undertaken to defer repayment of business loans for up to six months at no charge.
The PGE Résilience covers up to 15% of average annual sales over the last 3 years. It can be fully combined with any other PGE that may have been obtained, for which the loan ceiling is 25% of sales. Companies with an PGE Covid-19 will therefore be able to borrow a total of up to 40% of their sales.
On 11 April 2020, 200,000 applications had already arrived in the banking networks. And 150,000 files have already been processed, for a total amount of €22 billion, according to Nicolas Dufourcq, director of BPI France, the French public investment bank.
On 26 March 2021, 664,279 files have already been processed, for a total amount of €138 billion.
On 7 May 2021, 673,139 files have already been processed, for a total amount of €139.5 billion.
On 31 December 2021, 693,398 files have already been processed, for a total amount of €141.562 billion.
On 31 December 2022, 801,566 files have already been processed, for a total amount of €143,820 billion.
According to the report by the Cour des Comptes, published in July 2022, the choice of a simple system, based on delegating the distribution of loans to the banks, proved to be the right one. EMPs have clearly prevented a credit crunch and supported the cash flow of companies affected by the crisis, which was the primary objective of the scheme. There has been no restriction on the supply of credit to businesses and interest rates have continued to fall, reaching the lowest level in the eurozone in France at the end of 2021. The Cour des Comptes highlights the speed with which the aid has been implemented: of the €137bn of granted by banks to more than 660,000 businesses in December 2021, more than 70% had been granted by June 2020. However, the pace of subscriptions slowed significantly in 2021. The scheme was The scheme was particularly popular with very small businesses, which had received 88% of the loans at 31 December 2021 (but 36.7% in terms of amount).
|Does not apply to workers||Applies to all businesses||Does not apply to citizens|
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Role||No involvement||No involvement|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
No involvement of social partners.
This instrument seems to reach a consensus among social partners.
Eurofound (2020), State-guaranteed treasury loans, measure FR-2020-10/570 (measures in France), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/FR-2020-10_570.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.