With the crisis, the right is rediscovering the virtues of the shareholder state

Is this the effect of the approaching regional elections? Or the specter of the supposed “Covid debt wall” of companies, which prompts them to be inventive? These days, elected officials are competing with proposals inviting the State to take control of companies in difficulty, even if it means shaking up their own ideological framework. On the left, but above all on the right, the idea that he could enter the capital of tens of thousands of small or medium-sized indebted companies, and no longer just very large ones, to help them get over the delicate course of exiting the crisis, doesn’t seem to scare many people anymore.

To avoid them the pangs of over-indebtedness, the president of the Ile-de-France region (formerly Les Républicains, LR) Valérie Pécresse, candidate for her succession, thus pleads unashamedly for the State to become a shareholder of SMEs in which it loaned money during the crisis. “The government should transform part of the loans guaranteed by the State that it has made into equity for companies, so that they do not find themselves over-indebted because they will have to invest for the future”, she said Sunday, June 13 on BFM-TV.

Words almost identical to those made a few months earlier by his counterpart Xavier Bertrand, also a candidate for his succession in Hauts-de-France. “I have been asking Bercy for two months to transform loans guaranteed by the State into equity for SMEs and mid-size companies [ETI] “, he pleaded in the Sunday newspaper in summer 2020.

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The risk pointed out by these elected officials? That the 700,000 or so businesses that have taken out state-guaranteed loans since 2020, including a myriad of small companies, cannot repay them next spring, when the first installments fall.

The amounts are colossal – the amounts outstanding amount to 140 billion euros – but the public authorities and many economists estimate that they will in reality be few to have payment difficulties – thus, 5% or 6% of between them would be affected at most. The risk being borne by the State which guarantees 90% of the funding, it is however the State which will find itself in the position of arbiter when the time comes.

“We must get out of hypocrisy”

“I don’t want them to find themselves facing the wall of Covid debt”, warns Valérie Pécresse, who not only promises, for businesses in her region, to” to cancel “ this debt, but also to create a public fund to “Invest in these companies, in particular hotel companies”.

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