The French finance minister is counting on banks to help the state salvage the economy by supporting companies hit by fallout from the coronavirus pandemic.
Following months of strict lockdown to contain Covid-19, a wave of bankruptcies is looming. For companies that received state-sponsored loans, the fear is that the relief will prove short-lived, and interest rates could climb next year, increasing the cost of repaying the aid.
“Hundreds of thousands companies have taken out state-guaranteed loans in March and April – and it saved them,” Bruno Le Maire said Saturday on France Inter radio. “With a great deal of solemnity, I’m asking banks to continue supporting companies.”
Mr Le Maire said interest rates on loans that get extended will be capped at 3 per cent.
A national lockdown that began in March stifled the virus but also sent the economy into its worst tailspin on record. The government now expects that output may contract less than the 11 per cent initially forecast this year, but with infections climbing in France and around Europe, uncertainty remains high.
Many small and medium-sized companies are concerned they would not be able to repay their emergency loans with the virus spreading and the economic outlook grim.
Earlier this week, the government began dropping hints about the contents of its €100 billion ($119bn) plan to boost the economy. The plan will be announced on September 3 and will focus on the supply side of the economy, including tax cuts for companies and increased investment.
On Friday, Mr Le Maire insisted all actors in the economy must show “solidarity” in the next few months. He suggested the companies that benefit from state aid as part of the recovery plan should make commitments to maintain jobs in France and be accountable for their environmental impact.
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Zidane's managerial achievements
La Liga: 2016/17
Spanish Super Cup: 2017
Uefa Champions League: 2015/16, 2016/17, 2017/18
Uefa Super Cup: 2016, 2017
Fifa Club World Cup: 2016, 2017
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UAE currency: the story behind the money in your pockets
How much of your income do you need to save?
The more you save, the sooner you can retire. Tuan Phan, a board member of SimplyFI.com, says if you save just 5 per cent of your salary, you can expect to work for another 66 years before you are able to retire without too large a drop in income.
In other words, you will not save enough to retire comfortably. If you save 15 per cent, you can forward to another 43 working years. Up that to 40 per cent of your income, and your remaining working life drops to just 22 years. (see table)
Obviously, this is only a rough guide. How much you save will depend on variables, not least your salary and how much you already have in your pension pot. But it shows what you need to do to achieve financial independence.
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If you go…
Emirates launched a new daily service to Mexico City this week, flying via Barcelona from Dh3,995.
Emirati citizens are among 67 nationalities who do not require a visa to Mexico. Entry is granted on arrival for stays of up to 180 days.
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