The Minister of the Economy, Bruno Le Maire, believes that an extension is necessary to allow companies to take full advantage of the economic recovery.
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The government will table an amendment to the 2022 draft budget on Tuesday, November 9 to extend the state guaranteed loans (PGE) system by six months until the end of June 2022, the Ministry of the Economy said Monday to Bercy, confirming information from Figaro. “All companies that had prospects before the health crisis must take full advantage of the recovery. This is why we are extending the distribution of EMPs by six months.”, the Minister of the Economy, Bruno Le Maire, told the daily.
To be effective, this extension still needs to be endorsed by the European Commission. More than 690,000 PGEs have been granted for more than 140 billion euros since the start of the health crisis in March 2020, making it possible to replenish the cash flow of companies in the face of a sudden drop in their activity. To respond to the emergency, the government had put in place an exceptional mechanism of guarantees of up to 300 billion euros.
But the cash flow of many companies did not ultimately deteriorate with the crisis. This summer, according to the last quarterly barometer published by the public bank Bpifrance and the Rexecode institute, 60% of PGEs had not been consumed, or only a minority.
The situation is however very disparate according to the companies and the sectors of activity. But in general, “The indicators are now good, even better than expected, the PGE distribution figures have stagnated for several months, and the immediate repayment intentions also reflect this good economic situation”, reacted the French Banking Federation in a press release.