Prime Minister Jean Castex announced on Thursday October 29 at the French National Assembly that an additional 20 billion euros would be released. It will be used mainly to reinforce business support schemes and to meet healthcare costs.
A budget calculated to finance two months of confinement
While the exact amount has yet to be determined, and will be included in the new rectifying budget for 2020, we already know that the package will be worth around 20 billion euros.
Although only one month of recontainment has been announced for the time being, the budget corresponds to the requirements needed to cope with two months of confinement. A precautionary measure in anticipation of a possible extension of health restrictions.
This envelope of some twenty billion euros will be allocated, on the one hand, to business support schemes and, on the other, to healthcare expenditure. 1.2 billion has also been earmarked to help the most vulnerable people, as announced by Emmanuel Macron in October.
Enhanced business support systems
"To all of France's entrepreneurs, we are reactivating and strengthening all of our country's business support instruments for the duration of the containment," announced Bruno Le Maire, Minister of the Economy and Finance, on his Twitter account.
Assistance is increasing and evolving, focusing more on subsidies and exemptions than on loans and deferred charges. Many companies are already in debt, and taking out new loans would inevitably bankrupt them.
6 billion euros have been earmarked to strengthen the solidarity fund, which can now reach up to 10,000 euros for companies with fewer than 50 employees facing administrative closure.
In addition, companies in the tourism, events, culture, sports or hotel/restaurant sectors that are not directly closed, but are suffering the consequences of the closures, can also benefit from the solidarity fund, up to a maximum of 10,000 euros. For other businesses, if the loss of sales exceeds 50%, they can benefit from 1,500 euros.
In addition, administratively closed companies, as well as companies linked to these sectors, will no longer have their charges deferred, but cancelled. The French government has earmarked €1 billion of the €20 billion earmarked to deal with the consequences of reconfinement.
A tax incentive will also be introduced to encourage landlords to lower rents for companies affected by the crisis. 1 billion euros will be earmarked for this. Finally, 7 billion euros have been earmarked for the short-time working scheme.