Bloomberg reports that French finance minister Bruno Le Maire said that France’s state guaranteed lending program will weigh on public finances less than expected as the strength of the economic recovery has taken the government by surprise and will help firms repay loans.
Le Maire said he keeps revising down how much the 142 billion euros of guaranteed loans will cost the state from an initial estimate of 5 billion euros.
The loans were a central plank of France’s strategy to do “whatever it costs” to protect businesses and workers during Covid lockdowns. That included around 35 billion euros of spending on grants and around the same amount on the state’s furlough program.
The state will provide case-by-case help for the “very small number” of businesses that could struggle to start repaying the state guaranteed loans in the spring, Le Maire said. While there will be no overall extension of the program, he said the state is prepared to extend the period for companies to pay delayed taxes to three years from two currently.