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ECB Must Send Strong Signal to Help Small Business: Le Maire

ECB Must Send Strong Signal to Help Small Business: Le Maire

(Bloomberg) --

The European Central Bank should prioritize support for lending to small companies and send a monetary signal “if possible,” French Finance Minister Bruno Le Maire said as he announced France could go further to support firms struggling with the impact of the coronavirus.

Le Maire said he spoke to ECB President Christine Lagarde twice this week and urged her to send a “strong signal,” adding that this was the most important measure that could come from the central bank at its Thursday policy meeting.

Visiting a catering company on the outskirts of Paris, Le Maire said France could strengthen measures to help cash-flow and loan guarantees. He also said he will create a “solidarity fund” limited to small companies in the worst hit sectors.

France should also boost state financing for temporary unemployment plans to cover a larger share of the costs of furloughed workers, Le Maire said. Removing the cap on the state’s under-employment benefits could cost the state hundreds of millions of euros, he added.

The French finance minister also said he has instructed the tax collection office to tell companies they don’t need to pay dues in the coming weeks. If companies aren’t able to pay at a later date, they could be offered tax relief, he added.

Le Maire said France is doing the “same thing at the same level” as the efforts of the U.S. and the U.K. to stimulate their economies. He reiterated that France will propose a “massive, coordinated” stimulus plan at a meeting of European finance ministers next week.

Le Maire said state investment bank BPI would increase its loan guarantees for small and medium-sized firms to 90% from 70% currently.

“It’s radical but very effective,” he said.

To contact the reporter on this story: William Horobin in Paris at whorobin@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, James Regan, Frank Connelly

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