“The companies most in difficulty to repay their loan guaranteed by the State (PGE) and having borrowed less than 50,000 euros will be able to spread their payments up to 10 years or even to postpone the first due date by six months, announced the Minister of Economy Bruno Le Maire”.
Well it’s already a good idea because it will avoid a wall of bankruptcies with a too short repayment of PGE.
It was also a fairly predictable measure.
On the other hand, I am greatly surprised by the threshold of 50,000 euros, which is very, very low.
Dangerously low.
The agreement to facilitate the reimbursement of companies in difficulty was signed this morning.
“According to Bruno Le Maire, this agreement “makes it possible to use credit mediation to reorganize state-guaranteed loans for small businesses that may experience particularly significant repayment difficulties”.
According to Bruno Le Maire, a small number of companies are concerned: less than 25,000, i.e. a default rate of 3.8%.
For companies whose PGE amounts to more than 50,000 euros, they will have the possibility of seizing the departmental crisis resolution council, whose role will be to support the company and offer it the most suitable solution, the referring “if necessary” to credit mediation.
Some 697,000 companies have contracted a PGE since March 2020, for a total outstanding amount of 143 billion euros. In total, 88% of the beneficiaries were companies with less than 8 employees”.
If you make a small division of 143 billion by 700,000 companies, roughly speaking, that does not make 50,000 euros at all.
This threshold is too low, and here again we will have a predictable iterative process with a threshold that will gradually rise and a State that will be obliged to spread out the reimbursements of the most important EMPs, which will make the European Commission scream, the big Commission which monitors the accounts of France.
We haven’t left the hostel!
Charles SANNAT
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Source AFP via BFMTV.com here
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