This French preference for debt

France has, they say, a preference for unemployment. She also has a preference for debt, and not just for public debt. French companies are, according to the IMF, among the most indebted in the world. At 140% of GDP (in 2018), twice as much as in the United States or Germany, the debt of French companies has nothing to envy that of the public sphere.

The crisis obviously did not help. The urgency pushed them to borrow even more with a massive recourse to loans guaranteed by the State. The bank and bond debt of French companies increased by 200 billion euros between January and October, twice as much as in 2019. Penalizing their investment capacity, it is now flirting with 2 trillion euros, a historical record. And while the appetite of businesses for secured loans seemed to have calmed down in the fall, the prospect of a third lockdown prompts them to call on it again. Macroeconomic data shows that they are partly protected by an abundant cash flow mattress, without knowing whether they are the same who are in debt and have liquidity. But the crisis has only accentuated a very French leaning: French bosses prefer to solicit their bankers rather than their shareholders.

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