Event professionals demonstrate in Paris in December 2020. -
ISA HARSIN / SIPA
Many companies avoided bankruptcy in 2020 thanks to state aid.
But these are not going to last forever.
The upcoming deadlines (loans to repay, contributions) could put many companies in difficulty if the State does not react.
Like the sailors of the Vendée Globe washed by the waters of the Pacific, companies and employees have been severely tossed about by the tumultuous year 2020. And it is not over: the French economy is still far from being able to navigate in calm waters, because it will have to cross the terrible year 2021. Like Cape Horn for boats, the passage will be very perilous and could cause shipwrecks of companies.
To understand why, you have to look at the statistics of business failures in recent months.
We are then faced with what looks like a paradox.
While France and its economy have slowed down and many sectors have had to lower the curtain for months because of the coronavirus crisis, “the cumulative number of corporate liquidations and turnarounds is (...) abnormally low by compared to 2019: (…) - 35.9% for all companies and - 29% for SMEs (10-249 employees) ”, notes the Economic Analysis Council (CAE) in a note published in December.
"Bankruptcy tsunami"
These "good" figures are not a miracle or a mistake, but the concrete expression of massive state intervention in the economy.
Through the support of partial unemployment, the various solidarity funds, postponements or cancellations of contributions, or even the guarantee provided on certain loans (the famous PGE), the government has injected billions of euros to avoid the collapse.
Almost everyone has benefited from it.
According to an INSEE study published last month, 84% of companies have resorted to one or more government aid to overcome the crisis.
More than two thirds (70%) have thus benefited from partial unemployment.
In other words, companies which could be in difficulty before the crisis took advantage of this “infusion” of public money to survive.
But this situation will not last forever.
“We expect (…) a tsunami of bankruptcy, when the Urssaf, taxes and banks will be remembered in good memory of companies.
All this wall of debts (…), it will be necessary to cross it at one time or another ”, predicted last October the president of the commercial court of Lille Métropole, Eric Feldmann.
However, if the turnover does not take off again by then, it will simply be impossible to pay.
In particular for companies which have benefited from a simple deferral - and not from a cancellation - of certain charges (rents) or contributions, which remain due.
Wave in September 2021?
For David Cayla, researcher at the Angevin research group in economics and management (Granem) and lecturer at the University of Angers, we should rather expect a multiplication of bankruptcies after the summer of 2021. “As long as many sectors (restaurants, tour operators…) cannot function, it is normal to help them.
On the other hand, once the epidemic is under control, perhaps in the spring, the aid will gradually stop.
We will have to wait until September or October to see the real effects ”.
And according to Mathieu Plane, economist at the OFCE, it will be violent.
"According to our calculations, companies must already bear a total of 60 billion euros in losses related to 2020," he says.
In 2021, there will certainly be a recovery, but it will not allow a return to a pre-Covid level of activity.
In other words, the losses will increase further.
However, to repay their loans in the coming years, companies will have to generate higher profitability than before the crisis!
It will not be possible ”.
"We postpone the moment of shock"
Can this wave be quantified precisely?
Bruno de Moura Fernandes, economist for Western Europe at Coface, risks an estimate: “In 2021, we forecast an increase in business failures of 16% compared to 2019 [last" normal "year] , ie around 59,000 failures ”.
For its part, the Economic Analysis Council predicts that "the accumulation of debt and the decline in activity could lead to a sharp increase (+ around 26%) in the risk of default from 2021" in the most important sectors. fragile.
"To this would be added the 'normal' catching up of failures that did not take place in 2020," adds the CAE.
Anticipate now
Will we then be able to attenuate this looming tidal wave?
“The government will have to both let unprofitable companies go bankrupt, since it cannot forever subsidize the entire economy, while making exceptions to avoid a social catastrophe,” says David Cayla.
For example, certain businesses or industries which represent a lot of jobs in a given area could be saved because they are strategic, even if they are not profitable ”.
For the economist, it is necessary to anticipate from now on a possible congestion of the commercial courts: “During the period of the procedure, the creditors do not know if they are going to be paid, which creates economic uncertainty, which has repercussions. on other companies (frozen investments, stopping hiring, late payment of invoices, etc.).
If the State does not prepare that, the deadlines will be lengthened ”.
Spread the shock over time
For Bruno Moura de Fernandes, the State nevertheless has the means to cushion the shock: “The magnitude of the failures will depend on how it will reduce aid.
It has incurred such large expenditures (86 billion euros for the lowest estimate) that it would be counterproductive to withdraw the support too soon, or too abruptly.
This would endanger the effectiveness of what will have been spent so far ”.
Illustration with the PGE (Loan guaranteed by the State), that companies will be able to start repaying from 2022, and not 2021 as initially planned: “In other words, we are postponing the moment of the shock for companies' cash flow. , explains Bruno de Moura Fernandes.
This allows the negative effects to be spread out over time as much as possible ”.
The State could also “transform” certain non-reimbursed EMPs into equity investments, in order to save companies.
In addition, nearly 20 billion additional euros will be mobilized in the 2021 budget. "It is not time to lift the measures to support the economy" acknowledged in December the Minister of the Economy, Bruno Le Maire. .
This supposes an additional financial effort, and therefore an increase in indebtedness.
"The level of public debt, in itself, is not so problematic" assures Bruno de Moura Fernandes, especially since France borrows at negative interest rates.
But according to him, this supposes that the country undertakes "a more sustainable trajectory towards a balance of accounts, either with a reduction in expenditure, or with an increase in revenue (taxes)" within two to three years, in order to maintain the confidence of creditors.
With the presidential election due to expire in 2022, the subject will undoubtedly be a central point in the upcoming debates between the candidates.
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