“Whatever it takes”. With this expression, President Emmanuel Macron promised in his first speech dedicated to the pandemic on March 12, 2020 that no French would be left without resources and no company would risk bankruptcy. A year later, the virus continues to spread strongly, the hospitality and culture sectors have been closed for more than five months and the country is immersed in a third lockdown that involves the closure of some 150,000 non-essential businesses.
The Minister of Economy, Bruno Le Maire, has assured that the “whatever it takes” it will continue “while the health crisis lasts” and has promised not to raise taxes.
The financial support aid received by the companies affected by the closures is diverse and goes to multiple sectors, from solidarity funds (a mechanism to compensate businesses that have lost part of their sales), rent reductions, loans or exemptions tax and social contributions up to a partial unemployment system for employees that guarantees 70% of the gross salary. These measures have been maintained throughout this year and, on occasions, have been reinforced.
The solidarity fund, for example, has been modified up to 17 times to “respond to a greater number of possible situations,” as detailed by the Minister of Public Accounts, Olivier Dussopt, in the Senate. Around two million French companies have taken advantage of this system. Dussopt also assures that France is the European country that compensates the most traders, independent workers and companies that have been forced to close. “It is a pride and we must vindicate it, since our duty is to be by its side,” said the minister.
In France, the hostelry it was forced to close indefinitely at the end of October. Since then, the Government, which argues that they are one of the main places of contagion, has been postponing the reopening of these establishments and has not yet given a specific date for it. In his speech last Wednesday in which he announced the new national lockdown, Macron said that the vaccination will allow a progressive reopening in mid-May, referring to culture and restoration.
Those hoteliers who have lost at least 50% of their business volume have access to the solidarity fund. If so, they have two options to receive subsidies from this fund: they can request a monthly aid equivalent to the amount of turnover they have lost due to the pandemic – with a limit of 10,000 euros per month – or recover 15% of your income – 20% if the loss exceeds 70% -.
Apart from the solidarity fund, hoteliers can also use subsidies to compensate their employees or to pay for their vacations, with a limit of 10 days per worker. In addition, in January the Ministry of Economy made other aid available to these businesses to offset fixed costs, such as rent, electricity or insurance. Specifically, it covers 70% of these expenses for companies with more than 50 employees and 90% in the case of micro-companies.
Discotheques, gyms, companies in the tourism sector and the cultural industry also receive this type of aid. Last month, in addition, the Minister of Culture, Roselyne Bachelot, announced that she will allocate 20 million euros more in the Government budget to support the cultural sector, which implies a total of 50 million euros dedicated to assisting young artists or those affected by the crisis.
France is one of the states in Europe that grants the most subsidies to its citizens and companies, but it is also one of the most indebted. And the health crisis is having a strong impact on public finances. According to the National Institute of Statistics and Economic Studies of France (INSEE), in 2020 public debt has reached 115.5% of GDP and the deficit is 9.2%, levels not recorded since 1949, years in which France was recovering from the impact of the Second World War.
Even so, the Government affirms that the data is not a surprise and that it has not exceeded its projections. The Executive anticipated a 11.3% deficit and a debt close to 120%.
The debate on debt in France and to what extent it is sustainable is recurrent. There are those who ask for its cancellation, a proposal shared by experts from other European countries. 150 economists from more than 10 countries in Europe published a tribune in the newspaper Le Monde last February 5 in which they argued that the repayment of the ‘COVID debt’ would imply an increase in taxes and / or a reduction in public spending that would entail “disastrous social consequences.”
Although these grants allow the majority of businesses to survive, for sectors such as culture or restaurants they do not solve the long-term effects of this crisis. Many fear that the price of staying closed for so long implies more serious consequences and they demand to resume their activity as soon as possible.
While the world of culture has actively mobilized to demand a reopening – more than 100 theaters have been occupied throughout the country in recent weeks – the great protest of restaurants scheduled for early February did not materialize.
Restaurant owners across France then organized with the aim of opening their premises to protest against sanitary measures despite going against the law. But that same morning, Le Maire issued a warning to them in a radio interview: “The hoteliers who open are not going to benefit from the solidarity fund.”
Bar and restaurant owners chose not to participate in the protest. “The risk of losing aid is too high, we cannot afford it,” the owner of a Parisian store located on Rue de Buci, in the Saint-Germain-des-Prés neighborhood, explained to elDiario.es at the time. Meanwhile, this restaurant survives by selling take-out drinks and snacks and delivering food at home.
The situation is very different for those who are far from the city. In the Doubs region, a town of less than 3,000 inhabitants, the owner of the restaurant ‘La Source Bleue’, Stéphane Turillon, regretted that, unlike in Paris, for village and road establishments the distribution system is unworkable.
On the day of the mobilization, the gendarmerie showed up at their premises and Stéphane ended up not serving his clients. “I have a family, I cannot afford to lose aid,” he told reporters. The main French media covered his case and more than 200 people, most of them regulars, surrounded his restaurant and organized a march down the road as a show of support.