Published by Stéphanie Gallo Triouleyre on June 11, 2020
Following the emergency measures put in place in March and the sectoral recovery plans unveiled at the beginning of June, a more comprehensive programme to counter the economic crisis is expected.
The forecasts are not exactly consistent across indicators and analysts, but they all converge on a gloomy economic future for the coming months. The Banque de France expects France's GDP to fall by 10% in 2020 and unemployment to rise by 11.5%. The OECD, for its part, predicts a drop in GDP of 11.4% if the pandemic persists, but of 14.1% if a second wave of the pandemic overwhelms the country again come this fall.
In this context, the government is stepping up on with measures to support and stimulate the national economy in order to sustain the supply side of the economy. To this end, on Wednesday June 10, it presented its third corrective finance plan (PLFR3). This plan provides for public support for the economy in the order of 460 billion euros. It includes the 400 billion or so already programmed for the various emergency and support measures for businesses (solidarity fund, partial activity, state-guaranteed loans, etc.), but also the various sectoral plans that have been drawn up over the last few days: 18 billion to support and revive the tourism sector, 8 billion for the automotive sector, 600 million to support the rebound of French Tech start-ups, 15 billion for aeronautics, as well as aid for the book, small business and construction and public works sectors.
Catching up
“No one can deny that there are several measures up for consideration,” says François Perret, director of Pacte PME. “First there were the emergency measures. We now find ourselves in an intermediate sequence with the sectoral measures. Next will come a more comprehensive recovery plan.”
For the expert, this plan will have to integrate three priorities affecting SMEs: putting in place relay solutions to emergency measures, supporting investment and employment to catch up with France's productivity gap, and lastly, organising the strengthening of small and medium-sized enterprises' equity capital.
On this last point, François Perret advocates targeting the 30,000 most promising SMEs to help them obtain the ETI status. The director of Pacte PME also insists on the need to focus on the supply side and to strengthen value-sharing schemes with employees. " Unlike the crisis of 2008, we are not just talking about economic recovery now, otherwise we will be heading for a further fracture in society. After the gilets jaunes, the strikes against pension reform and the Covid, we can no longer afford some thing like this. "
Strengthening businesses by transforming EMPs
The official calendar is yet to be set, Bruno Le Maire and his services are all hands on deck, but the economic recovery plan should probably be presented at the end of the summer or in the fall. " Too late, declares François Asselin, president of the CPME. Sectoral measures are necessary, but what about all the SMEs that do not belong to these priority sectors? We have to move quickly to give visibility and prospects to all our SMEs. We are asking for a plan before the summer. "
With this in mind, last week François Asselin presented the 109 proposals of the CPME to the government. The first of which are tax measures: tax exemption, cancellation of social security charges, maintaining partial unemployment at 100% until the end of the year for companies that have lost more than 50% of their turnover in the first half of the year, etc.
" We also need to strengthen our companies," adds François Asselin. The emergency measures were a very good thing, but the funds used will of course have to be recovered. Our proposal, therefore, is to bring up the state-guaranteed loans (PGEs) to quasi-equity, with repayment over 10 or even 20 years. "
The employers' union also suggests the reactivation of a hiring bonus, a zero charge for recruiting an apprentice, exemption from corporation tax for amounts reinvested or re-invested in equity capital, etc.
Supply, demand and competitiveness
The previous week, the Medef had also unveiled its recovery plan. With an emblematic measure: eco-cheques intended for modest households to revive consumption. The Medef is also asking for a massive plan to encourage young people to work, with a 12-month exemption from social security
contributions for a first permanent contract and a 10,000 euro grant for the hiring of an apprentice.
Concerning the cash flow of companies, such as the CPME, the Medef pleads for a cancellation of deferred tax charges.
PLFR3. The third amending budget provides for €31 billion to finance partial activity, €8 billion for the solidarity fund for very small enterprises, €4.5 billion for local authorities and €43.5 billion for the sectors most affected.
Charges. Among the companies likely to benefit from an exemption from employer's contributions and fees: VSEs and SMEs in the hotel, restaurant, cultural, events and sports sectors, etc., the European Commission has decided to grant an exemption from the social security contributions for VSEs and SMEs.
800 000. This is the number of jobs that could be lost in France in the coming months, according to the assessment of the Minister of the Economy Bruno Le Maire before the Finance Committee of the National Assembly.
Aeronautics. 15 billion for aeronautics: the plan to revive the sector provides for the creation of two funds, in particular to support the transformation and improve the competitiveness of SMEs in the sector.