PARIS: France said on Friday that it was readying a “historic” package of multi-billion euro loans to help carmaker Renault and flag-carrier Air France through the crisis caused by the coronavirus.
For Air France, a €7 billion ($7.5 billion) package is planned and for Renault €5 billion ($5.4 billion), Finance Minister Bruno Le Maire announced.
He said that the package was needed to save Air France amid an unprecedented industry crisis but warned the money would come with strings attached, with the airline notably having to improve its environmental credentials. For Air France the loan package is made up of €4 billion in bank loans guaranteed by the state and a €3 billion loan direct from the state, he told TF1 television.
“We need to save our national company and the 350,000 direct and indirect employees affected,” he said, while describing the plan as “historic support”.
“We are behind Air France, behind the employees of Air France to guarantee our independence and save jobs,” he added, while denying that nationalisation was on the cards. But he warned that the help was not a “blank cheque” and would come with “conditions” linked to its profitability but also environmental factors. “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,” he said. In The Hague, Dutch Finance Minister Wopke Hoekstra announced the government plans to support KLM with an aid package worth between two to four billion euros.
“We are currently working out the exact form and details,” the finance minister said on Friday.
For Renault, a €5 billion ($5.4 billion) bank loan package guaranteed by the state is being worked on, Le Maire added. “What is at stake here is our automobile industry. Renault is an industrial flagship that belongs to our culture and history,” he stated.
The French state retains shareholdings in both Renault and Air France of 15% and 14.3% respectively.
Le Maire had previously warned that he expects the GDP in France to contract 8% this year due to the effects of the lockdown against the coronavirus which is due to last in France until May 11.
“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.
He said France would do everything “to save its companies and start again with an economy that is more respectful for the environment.”
Published in The Express Tribune, April 26th, 2020.
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