France Wants to Restructure Small Firms’ Debts With New Tool
France plans to restructure the debts of small firms using a new mechanism, as it seeks to limit the lasting damage wrought upon the economy by the Covid-19 pandemic.
Finance Minister Bruno Le Maire will present a tool in coming weeks for identifying companies that are viable in the longer term, but face short term problems that may require debts to be restructured. He cited the aircraft industry as a sector might benefit from the aid.
“I don’t want any healthy business to go under because of the economic crisis,” Le Maire said while traveling in central France. “The measure will bridge the gap between the difficult situation some companies are in now and the economic recovery that will come a bit later.”
The new mechanism comes amid warnings of an acceleration in insolvencies as governments in Europe reel in blanket support they provided during the crisis.
France has already provided as much as 20 billion euros ($24.2 billion) in financing to repair firms’ balance sheets, in addition to more than 130 billion euros of state loan guarantees during the crisis.
Le Maire said the new debt restructuring tool could save thousands of jobs in at small firms in each of France’s regions. He did not provide any details of how it would work, or how the state would decide which firms should benefit from public funds.
“I guarantee that as a finance minister any job that can be saved in viable firms will be saved,” Le Maire said. “That requires intervening sooner and with new mechanisms.”
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