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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

State-guaranteed treasury loans

Prêts de trésorerie garantis par l'État

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
Category Supporting businesses to stay afloat
– Access to finance
Author Frédéric Turlan (IRshare) and Eurofound
Measure added 13 April 2020 (updated 25 July 2023)

Background information

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.

Content of measure

PGE Covid-19

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.

PGE Résilience

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.

Updates

The following updates to this measure have been made after it came into effect.

31 January 2023

According to an update published by the government, on 31 December 2022, 801,566 files have already been processed, for a total amount of €143,820 billion (see Source).

08 November 2021

The state-guaranteed loan (PGE) is extended from 1 January 2022 to 30 June 2022 following the European Commission's decision of 18 November 2021.

Following the announcements of the Minister for the Economy, Finance and Recovery, it has also been agreed with the French Banking Federation that all companies that wish to do so, regardless of their activity and size, will be entitled to a deferment of an additional year to start repaying their state-guaranteed loan (PGE).

A business with an PGE in place in April 2020, which would not be able to start repaying it in April 2021, will be able to apply for a one-year deferral and start repaying it from April 2022. All businesses are encouraged to visit their bank advisor to decide on their PGE repayment plan.

In addition, in order to support VSEs in a situation of severe cash flow pressure, they will be able to benefit from an extension of the repayment period of their PGE from 6 to 10 years. After contacting their bank, these businesses should contact the Banque de France's Credit Mediation Service or the departmental crisis exit advisors.

Use of measure

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).

Target groups

Workers Businesses Citizens
Does not apply to workers Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds
Other

Social partners

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
  • Main level of involvement: Unknown

Involvement

No involvement of social partners.

Views and reactions

This instrument seems to reach a consensus among social partners.

Sources

Citation

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.