“There is no wall of bankruptcies”: faced with soaring energy prices, the Minister of the Economy Bruno Le Maire dismissed on Wednesday the hypothesis of an explosion in the number of companies which would be forced to shut down.
“There is an explosion in the prices of electricity and gas which is hard to live with for thousands of entrepreneurs, but they are coping,” explained Bruno Le Maire, on France Inter.
However, the minister does not deny the difficulties. “It’s difficult, we support them, but I won’t let it be said that it will be accompanied by a wave of closures, bankruptcies, because this is not the case”, he insisted at the day after the announcement of specific support measures for bakers.
“Less than 1% of entrepreneurs plan to close”
According to him, “Today, less than 1% of entrepreneurs plan to close or slow down their production” according to data provided by INSEE. In fact, according to the latest business survey from the National Institute of Statistics, which questioned industrial companies specifically, the total drop in their production “directly linked to the rise in energy prices” would be barely 1.5%.
On the other hand, in its latest survey published at the end of October, the Confederation of Small and Medium-Sized Enterprises suggests that 9% of managers of VSEs/SMEs “plan to stop their activity due to the rise in energy prices”. A figure that the government “contests”, replied Bruno Le Maire, adding: “You can give the example of Duralex or William Saurin”, two companies which recently announced a suspension or partial cessation of their activity due to exploding energy costs, “but you won’t be able to find hundreds of examples”. After the support measures unveiled for bakers, the executive estimates that of the 33,000 bakers, only “a few hundred are in real difficulty.
In the same vein, “there are thirty times fewer partial activity schemes at the end of 2022 than at the start of 2022”, argued Bruno Le Maire. The number of requests for partial activity validated by the administration rose from 40,073 in January 2022 to 1,382 in November.
Nevertheless, business insolvencies are currently continuing to rebound even if they are still lower than in 2019. In 2022, around 40,000 businesses have gone out of business. And from month to month, the default rate is rising in France with the final end of the last support measures put in place during the Covid and the start of repayments of guaranteed loans.
In 2023, according to Allianz Trade, bankruptcies could quickly equal or exceed their pre-health crisis level. On French territory alone, the insurer anticipates a 29% increase in business failures.