The Impact of the COVID-19 Outbreak in France
By Jerôme Ducuing, Business Development France
March 31, 2020
A delicate health situation to cope with
After Italy and Spain, among other European countries France has been strongly hit by COVID-19 outbreak. The third highest death rate after Italy and Spain shows the dramatic situation. In some regions like the Alsace, hospitals have reached the maximum capacity and some patients were moved to hospitals in other regions in France and even to Germany or Switzerland.
To limit the spreading of the pandemic, the authorities have recently announced the extension of the lockdown until Wednesday April 15th and will decide on extending this period -or not- according to the evolution of the situation.
Exceptional economic measures waiting for recovery prospects
French Minister of Economy and Finance, Bruno Le Maire, detailed at a recent press conference a massive plan to help companies overcome the economic difficulties linked to the Coronavirus outbreak.
The objective of these exceptional measures is to allow businesses encountering cash issues to postpone certain tax and social security payments and to prevent the growth of unemployment with extended partial operation measures.
To support companies going through these tougher times, French authorities have decided to mobilize € 350 billion to support the economy.
€45 billion fund will be used for cancelling or deferring social security contributions for small businesses and other hard-hit sectors of the economy in order to prevent the bankruptcy of those affected by the stoppage or a sharp slowdown in their activity. Part of this money will also be used to finance the massive short-time working scheme, which was set up as a matter of urgency.
€300 billion will be devoted through a guarantee fund to secure bank loans taken out by companies to avoid any risk of bankruptcy
Assets for the recovery period
Even if the French economy still faces some structural challenges - loss of competitiveness and market share, high public debt, too few mid-caps companies, France has a number of strong fundamentals and specific strengths:
Skilled productive workforce<
Strong private sector
Wide range of activities with highly competitive international groups (food, energy, aerospace, environment, pharmaceuticals, luxury,distribution …)
Cost competitiveness gains recorded over the past five years
.Research and innovation public incentives
Even if the impact of the COVID-19 outbreak on businesses could be massive in the very short term - no one knows to which extent for the time being - these assets will be the basis of the recovery to come in an economic world in full reconversion.