French government comes to the aid of Air France and Renault with multi-million Euro bailout plan

The coronavirus pandemic posed a serious challenge to not only French health systems but also crippled its economy due to weeks of nations-wide shutdown, which is due to last in the country until May 11. To address the issue of growing unemployment and collapsing corporations, French government introduced bailout plans for two of its key companies – Renault and Air France.

On Friday, Finance Minister Bruno Le Maire announced a seven billion euro (Dh27.8 billion) relief package for Air France, and five billion euro for Renault. He explained that the French aviation company’s packed would split into two parts – part one comprising four billion euros in bank loans guaranteed by the state and another a three billion euro loan direct from the state.

During his interview with TF1 television, Mr. Maire was quick to clarify that the package extended both the French airline and automaker was not a ‘blank cheque’ but like a loan with set conditions that the companies would need to comply with including profitability and environment friendliness. He also emphasised that the government was not looking at nationalisation of these companies. The French state already owns 15% and 14.3% shares in both Renault and Air France respectively.

Calling the aid as a “historic support”, the French Finance Minister said, “We need to save our national company and the 350,000 direct and indirect employees affected.”

He added, “We are behind Air France, behind the employees of Air France to guarantee our independence and save jobs…Air France should become the most environmentally respectful airline in the planet. This is the most important condition for me. Air France needs to present a plan for reducing CO2 emissions and transforming its fleet to be less polluting.”

With regard to planning of Renault package, he said, “What is at stake here is our automobile industry. Renault is an industrial flagship that belongs to our culture and history.”

“This crisis is historic. It will last years. It will be long. It will be difficult. I want every businessperson to know that… the state will be beside them,” he added. Acknowledging the forecast which expects France’s GDP to shrink 8% in 2020 due to the onslaught of coronavirus outbreak, he stressed the need to remodel economy and  businesses in alignment with the environment. He said,”to save its companies and start again with an economy that is more respectful for the environment”.

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