It was a decision expected by the merchants. It is timely, as many of them are preparing to reopen on May 11. The Minister of Action and Public Accounts, Gérald Darmanin, should soon detail the terms of cancellation of employer charges owed by small businesses. According to our information, this decision would concern all companies with less than 10 employees affected by an administrative closure decision during the confinement decreed until May 11. Their deadlines for March, April and May would be deleted.
Clearly, the food businesses, which have been in full swing since March 15, would not benefit from it, nor will the big brands with stronger backs. Professionals who have lost all activity but who were not closed administratively would not be affected.
So far, only the catering, tourism or culture sectors have been mentioned for these cancellations, for an amount limited to around 750 million euros which will therefore be significantly revised upwards. To give an order of magnitude, the amount of contributions due in March by the non-food trade amounted to 2.3 billion euros.
Final decision
In his speech to the Senate on Monday, the Prime Minister outlined such a decision. “We are ready to convert the load deferrals into final exemptions, not only for companies in the restaurant and tourism sector, but also for all VSEs which have been subject to closure measures”, said Edouard Philippe in front of the senators. The final decision came at the end of the day.
The U2P (Union of local businesses), which, since the beginning of the crisis, defends the principle “zero revenue, zero expenditure”, welcomed this decision. For the VSE lobby, companies “Deprived of turnover and profits”, have to “Benefit from the outright cancellation of their charges and not from a simple postponement which would sooner or later weaken their cash flow.”
This exemption would only be a first step before a recovery plan which begins to take shape. Officially, Bruno Le Maire has not planned to unveil this plan for the French economy before September or October. In fact, the Minister of Economy and Finance has already given some clues as to support for the most affected sectors, and promises the first meetings with the stakeholders concerned this week. “Cash flow problems will soon become solvency problems. We are already starting to work on it to minimize social disruption ”, explained the tenant of Bercy this Monday on France Inter.
Three sectors identified
Besides measures intended to support demand and investment, aid to the most affected sectors has already been set up as a pillar of this future plan. Three sectors have already been identified: aeronautics, automotive and tourism. “But we expect a lot of requests from other sectors – in culture, sport etc. – given the violence of the coming crisis “, says a government source.
Regarding aeronautics, Bruno Le Maire proposed “Setting up an investment fund for the sector to support its subcontractors and SMEs”. Last week at the Assembly, the Minister of the Economy had raised the idea of a contribution from major contractors (Safran, Aribus etc.).
Electric vehicle support
For the automotive sector, a similar fund is also envisaged, as well as a “Support for demand and consumption of electric vehicles”. Before the coronavirus crisis, the government had already implemented a conversion bonus to encourage the replacement of old vehicles. According to a report from the Court of Auditors last week, it finally cost 824 million euros last year, compared to an initial estimate of 596 million.
Regarding tourism and catering, Bruno Le Maire had already brushed aside the idea of lowering the VAT for restaurants. This Monday, socialist elected officials proposed the creation of a “tourist voucher” supplemented by the state and local communities volunteers to promote the consumption of the 50% of the least wealthy French.
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