Coface Group
France France
Population 63,704 Million
GDP 2738,676 $US billion
Country risk assessment
Business Climate
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main economic indicators

  2011 2012 2013(e) 2014(f)
GDP growth (%) 2.0 0.0 0.1 0.6
Inflation (yearly average) (%) 2.3 2.2 1.0 1.3
Budget balance (% GDP) -5.3 -4.8 -4.2 -3.8
Current account balance (% GDP) -1.8 -2.2 -2.0 -2.1
Public debt (% GDP) 85.8 90.3 94.0 96.8


 (e): Estimate (f): Forecast


  • Quality of infrastructure and public services
  • Skilled workforce, demographic dynamism
  • Competitive international groups (energy, aeronautics and space, environment, pharmaceuticals, luxury goods, agri-food, distribution)
  • World’s top tourist destination and leading agricultural power
  • High savings level, low household debt 


  • Insufficient number of exporting companies, loss of competitiveness and market share
  • Insufficient innovation effort, low level of product range
  • Low employment rate of young and older workers
  • High public debt 

Risk assessment

Rebound in activity hampered by lack of competitiveness and on-going fiscal adjustment

To date, consumption has shown some resilience due to the existence of “automatic stabilisers” and wage rigidity. In contrast, business investment has remained weak, despite an improved business climate. While credit conditions have remained more favourable than in many other Eurozone countries, businesses are struggling to restore their margins, and so are delaying their investment plans.

The expected recovery in 2014 will probably be constrained by the high level of unemployment (11% of the labour force) – even though the situation is slightly easing thanks to government employment schemes -, lack of competitiveness and on-going fiscal adjustment. Growth is likely to be driven mainly by exports linked to the European recovery, but export growth will remain below that of global demand. Consumption and investment are expected to pick up slightly. Household purchasing power will hardly feel the impact of higher taxes, as inflation is weak. Households, will, moreover, always be able to draw on their savings. The gradual increase in production capacity utilisation and the boost resulting from the disbursement of a tax credit under the “competitiveness pact” should restore some life to investment.


Financially weak companies and still high bankruptcies

French companies’ ability to rebound remains fairly weak due to low profit margins (28%) and self-financing rates (67%). Too small compared with their German counterparts, they remain generally short on innovation and too few of them export. They are insufficiently present on strongly growing emerging markets. Their production costs in mid- to low-end products are too high compared with the competition, and production has not moved sufficiently up-market.

The number of companies in difficulty remains high. Insolvencies among mid-cap companies have fallen (which has led to a drop in the average financial costs borne by suppliers) but SME bankruptcies are rising. After edging up in 2013 to about 62,500, the number of bankruptcies is very unlikely to change in2014, ina context of a still muted recovery. The situation of sectors such as distribution, textiles and clothing, and construction continues to deteriorate, the latter remaining by far the weakest in a still lacklustre property market (slow price erosion, decline in housing starts). By contrast, some sectors are improving, namely paper, wood and chemicals.


Difficult adjustment effort

Despite weaknesses in the economy and rising public debt, investors have to date maintained their appetite for French debt, which in late 2013 was still trading at historically low rates. The fiscal deficit is slowly reducing. The tax credit and spending cuts included in the 2014 budget are expected to help bring down production costs. The steps taken on employment should also provide some flexibility to businesses. However, the weight of public spending remains one of the highest in the euro zone (approaching 57% of GDP), which results in a high tax burden, well above the European average. High levels of taxation and social security contributions combined with wage rigidity, and their consequences on business profitability and production, remain at the centre of the economic debate. The current rise in social discontent, which is likely to be reflected in the forthcoming municipal and, above all, European elections, is hardly conducive to the implementation of far-reaching structural reforms by the authorities.



Among methods of payment, the bank card is now the instrument used most in France, replacing cheques, which are nonetheless still widely used.

For cheques remaining unpaid over 30 days from the date they were first presented for payment, the beneficiary may immediately obtain an enforcement order (without need of further procedural act or cost) based on a certificate of non-payment provided by his banker after a second unsuccessful presentation of the cheque for payment and where the debtor has not provided proof of payment within 15 days of formal notice to pay served by a bailiff (article L 131-73 of the monetary and financial code).

Bills of exchange, a much less frequently used mode of payment than cheques, have been in virtually constant decline in terms of number of operations with volume remaining essentially steady in value terms.

Bills of exchange are attractive for companies insofar as they may be discounted or transferred, therefore providing a valuable source of short-term financing. Moreover, they allow creditors to bring legal recourse in respect of “exchange law” (droit cambiaire) and are particularly suitable for instalment payments.

In value terms, however, cheques and transfers still represent most script payment transactions.

Bank transfers can be made within France or internationally via the SWIFT electronic network used in French banking circles, which offers a reliable platform for timely payment subject to mutual trust and confidence between suppliers and their customers.

The directive 2007/64/EC (in force since 1st November 2009) on “payment services in the internal European market” sets the legal basis for the creation of a single area for payments in Euros (SEPA), in order to harmonize the rules applicable to the different types of payment (transfers, direct debits, payment cards).





Since the “New Economic Regulations Act” of 15 May 2001, commercial debts automatically bear interest from the day after the due date shown on the invoice or specified in the commercial contract.


Unless otherwise stated in the general sales conditions or agreed between the parties, the payment period is set at thirty days from the date of receipt of goods or performance of the service requested.

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Likewise, the interest rate and conditions of application must be stipulated in the contract – failing that, the applicable rate will be the interest rate applied by the European Central Bank in its most recent refinancing operations, raised by ten percentage points as of 1st January 2009.

For the first half of the year in question, the rate applicable is that in force on 1st January and for the second half year in question, the rate applicable is that in force on 1st July.


From 1st January 2013, a professional in default of payment is legally liable to its creditor for a fee for collection costs, set to 40 Euros ( should be stipulated in the General Terms and Conditions of Sale).


Serving the debtor with formal notice to pay the principal claim and contractual or legal interest, nonetheless remains a precondition for any legal action taken by creditors.


Since 19 June 2008, the current limitation period in civil and commercial matters, was reduced to 5 years and the limitation starts “from the day when the right holder knew or should have known the facts to allow him to apply for such right”.


Where a debt claim results from a contractual undertaking and is both liquid and undisputable, creditors may use the injunction-to-pay procedure (injonction de payer), a flexible system based on the use of pre-printed forms not requiring applicants to argue their case before the court of civil instance (tribunal d’instance) or competent commercial court – the court having jurisdiction in the district where the debtor's registered offices are located.

Via that procedure, creditors can rapidly obtain a court order to be served subsequently by a bailiff.

The defendant has one month to dispute the case.


A fast track procedure (référé-provision) provides creditors with a rapid  means of debt collection, even in routine cases lacking any real urgency, provided the claims are not subject to substantive dispute; in such cases, the judge can grant a provisional payment in favour of the applicant that can represent up to 100 per cent of the claim.


However, this fast track procedure requires the presence of an attorney to represent the creditor in court.


If a claim proves to be litigious, the judge competent to rule on special urgency (juge des référés) evaluates whether the claim is well founded. As appropriate, the judge may then declare himself incompetent and, based on his assessment of the apparent validity of the case, invite the plaintiff to seek a ruling on the substance of the case through the formal court process.


Formal procedures of this kind permit having the validity of a claim recognized by the court, a relatively lengthy process lasting about a year or more owing to the emphasis placed on theadversarial natureof proceedings and the numerous phases involved in the French procedural system: submission of supporting case documents, written submissions by the litigants, examination of the types of evidence, various recesses for deliberations, and at last, the hearing for oral pleadings (audience de plaidoirie).


If justified by a claim’s size and the uncertain solvency of the debtor, legal action may include a petition to obtain an attachment order on available assets and thereby protect the plaintiff's interests pending completion of the proceedings and enforcement of the court's final judgment.

Insolvency trends France 2014
Payment incident index France 2014
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