France winds down crisis support for companies

PARIS (Reuters) – France will rein in its crisis support measures for companies from the end of September and tailor them to benefit only those companies still struggling afterwards, Finance Minister Bruno Le Maire said on Monday.

Early in the coronavirus crisis, President Emmanuel Macron had pledged to provide support to keep companies afloat “whatever it costs” in order to limit the damage to the euro zone’s second-biggest economy.

France has spent 80 billion euros ($94 billion) – nearly 4% of GDP – in various support programmes for companies since then and guaranteed another 160 billion in bank loans to businesses.

“With the economy operating at 99% of (pre-crisis) capacity, we have to get out of ‘whatever it costs’. That does not mean we are going to abandon companies that are still struggling,” Le Maire told journalists after a meeting with business federations.

Le Maire said direct payments from a solidarity fund which makes state aid available quickly and with few questions asked would be phased out by the end of next month.

Companies in the tourism industry still struggling after that would be able to benefit from state aid specifically aimed at covering most of their fixed costs and which is more strictly controlled than solidarity fund.

Le Maire said new rules requiring people to show proof of vaccination to enter public places like cafes, big shopping malls and trains had had no impact on the economy, judging by weekly payment card data.

The government is banking on the economy growing 6% this year.

($1 = 0.8475 euros)