by Steve Martindale
The French government has put together unprecedented financial rescue packages for two of the country’s largest employers. Announcing the loans, Finance Minister Bruno Le Maire said they would help carmaker Renault and flag-carrier Air France through the crisis caused by the coronavirus, but that they would come with strings attached, most notably regarding improvements in green credentials.
Air France has been given a €7 billion loan – €4 billion in bank loans guaranteed by the State and a further €3 billion loan direct from the State. “We need to save our national company and the 350,000 direct and indirect employees affected,” Le Maire said, while denying that the the loans were a first step to nationalisation. “We are behind Air France, behind the employees of Air France to guarantee our independence and save jobs.”
Since the coronavirus crisis began, Air France’s fleet of aircraft has effectively been grounded, putting the airline’s future at risk. The French State currently holds a 15 per cent stake in the company.
Le Maire was keen to stress that the loan did not represent a blank cheque, and in exchange for the bailout, the government will set conditions of profitability and the development of more environmentally sustainable, less polluting policies. “Air France should become the most environmentally respectful airline on the planet,” he said, urging the carrier to “present a plan for reducing CO2 emissions and transforming its fleet to be less polluting.”
Car maker Renault will receive a €5 billion loan guaranteed by the State. “Renault represents over a million jobs linked to the automotive industry across the country,” the minister said. “That is what is at stake. It is our automotive industry, it’s an industrial flagship that is part of our history and our culture.”
The car giant claims that it is still solvent, despite seeing a 20 per cent drop in turnover in the first quarter this year and burning through €5.5 billion in cash reserves so far in 2020. The current crisis came at a bad time for Renault, which last year posted its first annual loss in over a decade.