EXPLAINED: The economic help schemes that businesses and the self-employed in France can now benefit from

France’s economy minister on Thursday promised to bolster economic aid schemes in place to help businesses survive the downturn caused by new Covid-19 restrictions.

“We will continue to protect employees for as long as the epidemic is here,” Buno Le Maire said during a press conference on Thursday evening.

To account for the negative impact the government's new Covid-19 measures had on certain sectors such as bars and restaurants, Le Maire said the government had decided to strengthen the economic help schemes in place.

This came just after Health Minister Olivier Véran had announced that the metropole areas of Lille, Lyon, Grenoble and Saint-Etienne would join Paris and its suburbs and the Aix-Marseille area to become “maximum alert” zones, which meant local authorities would shortly have to impose a set of new, strict health measures.

These include closing down bars completely and imposing stricter health rules for restaurants for at least a fortnight, longer if the health situation required.

The restrictions have seen the bar and restaurant sector up in arms over what they say is an unfair targeting of their businesses that put their livelihoods at risk of disappearing.

To soften the blow, Le Maire said the government had bolstered both the "solidarity fund", which gives economic help to self-employed and small business owners, and the furloughing scheme chômage partiel (partial unemployment).

"We have to learn to live with the virus. It is here. It will not disappear overnight," Le Maire said.

What is the solidarity fund?

Set up in March, the solidarity fund was meant to be a temporary help scheme for businesses that saw their incomes drop dramatically during lockdown.

The grants were capped at €1,500 maximum per month, a relatively small sum that was meant to help small businesses and self-employed make it to the other side of lockdown without going bust.

As the gravity of the virus’ impact on the French economy became clearer, the government added several billions into the scheme, prolonged its longevity and extended it to include businesses with up to 20 employees (from 10 previously). 

Today, 150,000 businesses have had access to the fund, the economy minister said. More than €6 billion has been spent on grants so far.

Who can access the solidarity fund?

Until recently, the fund was reserved for the tourism and hospitality sector, but Le Maire said it now would open 75,000 additional businesses in other professions that suffered suffered the consequences that Covid-19 had for tourism, cultural and sporting activities.

“Certain activities have been excluded even though they are directly impacted by the consequences of the health crisis,” Le Maire said.

“I am thinking of florists. I am thinking of laundries that depend very directly on the hotel and catering industry. I am thinking of the booksellers on the Quais of Paris, seeing as there are fewer tourists in Paris today. I am thinking of those working in tableware, seeing as there are fewer restaurants open. I am thinking of the graphic designer,” he said.

Businesses with up to 50 employees will now be able to access the fund (up from 20) if they saw their incomes drop more than by 70 percent of their normal takings for that month (down from 80 percent previously).

The fund will be available until the end of 2020.

How big are the grants?

Last week, the government announced that the grants would be increased from €1,500 to €10,000. This amount is the maximum, and how much a business gets depends on their losses that month.

The amount of the grant is determined by comparing a business' monthly income to either their income the same month the year before, or their average monthly revenue (this was a compromise after restaurants complained that their revenues in 2019 were low compared to usual due to the 'yellow vest' protests).

Businesses apply via the online tax system - click here and log in to your espace particulier to fill out the required form. For more information on the exact steps of the application process, read our article on how to apply here.

Chômage partiel

France's furloughing scheme was set up in order to prevent mass-layoffs during the lockdown when businesses saw their incomes drop.

 

Like similar schemes in other countries, the French government incentivised businesses to keep their employees by registering them as "partially unemployed" and let the state foot the bill for their salaries. 

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Source: https://www.thelocal.fr/20201009/explained-the-economic-help-schemes-that-businesses-and-the-self-employed-in-france-can-now-benefit-from

 

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