The global recession following the coronavirus pandemic could be worse than that which followed the 2008 financial crisis, warned IMF Managing Director Kristalina Georgieva on Monday March 22 during a teleconference with the G20. In 2009, global GDP fell by 0.6%, according to IMF data.
The coronavirus is at the root of one of the most violent health crises of our time, and it's hitting the economy right in the heart. The numerous containment measures, border closures and shutdowns in many sectors are likely to result in the biggest recession since the 2008 economic crisis.
Against this backdrop, the French government is determined to stand by all businesses and self-employed people to help them overcome the crisis. Numerous public players are mobilizing to help self-employed workers whose performance is falling, or who are running out of cash.
Let's take a look at all the official aids already announced to help employees and the self-employed!
All companies whose business has been affected by the coronavirus crisis, and in particular businesses that have been forced to close, are eligible for the partial unemployment scheme. The aim is to maintain jobs through partial unemployment.
To activate it, go to activitepartielle.emploi.gouv.fr. All companies concerned have thirty days in which to apply for this scheme, with retroactive effect depending on the closure date for businesses. For companies with more than 50 employees, partial activity can be requested without waiting for staff representatives to be consulted. The French government has announced that it will cover all compensation paid to employees by companies, up to a maximum of 4.5 SMIC" (around €7,000).
It is also possible to defer payment of your next direct tax instalments (advance payment of corporation tax, payroll tax, as well as reimbursement of sums relating to March instalments) without penalty or justification. You can also obtain deferrals or exemptions from tax and social security charges, depending on your situation. Note that this is not automatic, and will be issued on a case-by-case basis.
Businesses with credit repayments to make can call on the help of the French government and the Banque de France (credit mediation) to negotiate a 6-month rescheduling with their bank, at no extra cost.
BPI France is mobilizing to increase the guarantee level to 90% for loans of 3 to 7 years granted by private banks, and for overdrafts confirmed for a period of 12 to 18 months by the company's bank.
Finally, it will be possible to suspend water, gas, electricity and rent bills for the small businesses most in difficulty.
Employees who continue to work at their usual place of work or by telecommuting will not see any change in their remuneration. However, the French National Assembly voted on Saturday evening to require a company or branch agreement before an employer canimpose a week's paid leave on employees during the confinement period.
In the event of short-time working, the employer pays them an allowance equivalent to 84% of their net salary, part or all of which is covered by the State.
For employees on sick leave, you should know that the "jour de carence" system in both the private and public sectors has been suspended.
A solidarity fund for small businesses (SMEs, auto-entrepreneurs, micro-entrepreneurs, the self-employed) with sales of less than €1 million has been set up by the Ministry of the Economy and Finance.
This will enable a rapid payment of €1,500 to be made:
- Shopkeepers ("VSEs, self-employed, micro-entrepreneurs") whose stores are closed in application of orders prohibiting them from receiving the public
- Retailers whose sales in March 2020 will beat least 70% lower than in March 2019
It is also possible to benefit from a suspension of water, gas and electricity bills in March. Like traditional businesses, you are also eligible to defer credit repayments for up to six months at no additional cost.
You also have the option of deferring the payment of your taxes and charges by one to three months. For the self-employed, social security contributions usually deducted on March 20 will this time be automatically smoothed out between April and December.
Written by our expert Paul LASBARRERES-CANDAU
March 25, 2020
