Two schemes for business aid adopted

Two new aid schemes for businesses were adopted by members of parliament on Tuesday 12 July. They provide a framework to set up a scheme of loans backed by the state and two measures to compensate for soaring energy prices.

The subsidies were negotiated in the context of the tripartite agreement and the postponement of the wage indexation. One of the two new aids is similar to what was put in place during the covid-19 pandemic. It comes in the form of state guarantees on new loans to alleviate the liquidity needs of companies affected by the consequences of the war in Ukraine, in particular the surge in energy prices. The aim is to ensure that banks continue to lend to these companies.

€500m for guaranteed loans

These loans should enable companies to finance their current activities or investments and may extend over a maximum period of six years. They can be for an amount equivalent to 15% of the average turnover of the last three years or 50% of the energy costs over the previous 12 months.

The total budget for this measure is €500 million, although this is difficult to estimate. This scheme is aimed at companies across all economic sectors.

Energy-intensive companies

The other bill adopted on Tuesday contains two aid schemes. The first concerns energy-intensive companies, of any size and in any economic sector. In reality this targets mainly industrial companies but also certain players in the hotel and craft sectors.

The intensity and maximum amount of the aid are modulated according to the exposure of the companies to price increases. It covers part of the monthly additional costs of businesses for a period from February to December 2022, and is not intended to compensate for the entire price increase, but only for severe price increases.

Sectors dependent on diesel

The second aid is for companies operating in sectors where travel and deliveries represent a significant part of their economic activity and which therefore have a high dependence on diesel fuel. This scheme is applicable mostly for companies in the construction and food processing sectors that are making losses.

Between 150 and 200 companies should be able to benefit from this scheme, according to estimates by the economy ministry, for a total budget of no more than €225m.

The government has moved to get the business aid adopted before the summer break. The housing subsidies provided for in the tripartite agreement have yet to be adopted for individuals.

This story was first published in French on . It has been translated and edited for Delano.