Coface Group


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

  2011 2012 2013 2014(f)
GDP growth (%) 2.1 0.4 0.4 0.8
Inflation (yearly average) (%) 2.3 2.2 1.0 0.9
Budget balance (% GDP) -5.1 -4.8 -4.2 -4.0
Current account balance (% GDP) -1.8 -2.2 -1.3 -1.1
Public debt (% GDP) 84.4 88.7 91.8 94.5


(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

The recovery remains fragile, held in check by high unemployment, further fiscal consolidation and lack of competitiveness

Consumption has, so far, proven relatively resilient thanks to the existence of “automatic stabilisers” and wage rigidity, but this traditional lynchpin of French economic growth is now struggling to rally. There was even a sharp decline in household consumption in the 1st quarter 2014, although it should be noted that there were some exceptional factors involved (mild winter temperatures, increase in ecological “malus” and VAT in January 2014). Household spending has on a more general level been restricted by the high level of unemployment (10.4% in March 2014, unchanged year on year). Fiscal retrenchment, up until now fairly limited, and set to be tightened this year, is also not going to help boost economic activity. At the same time, business investment remains at a low level, despite the fact that access to credit is easier than in many other Eurozone countries. Companies are however struggling to rebuild their margins, which are some of the slimmest in the Eurozone, and, as a result, are delaying any expansion plans. Exports, driven by external demand, should accelerate but will continue to be handicapped by the lack of competitiveness.


Financially weak companies and insolvencies running at high level

The capacity of French companies to recover is relatively limited due to low profit margins (29.5%) and self-financing rates (76.3%). Too small, compared with their German counterparts, they are insufficiently innovative and export oriented. They lack sufficient presence in the rapidly growing emerging markets. Their production costs, for the mid and bottom range products, are too high compared with those of their competitors, and there is not enough upmarket movement. The number of corporate insolvencies has remained at a high level (just over 64,000 in the year ended April 2014), higher than the 2009 peak. Those among intermediate sized companies have however decreased, which means a reduction in the financial costs falling on suppliers. Despite the numbers dropping at the beginning of the year, insolvencies during 2014 are still expected to exceed 63,000. Whilst the largest number of these are still to be found in the construction sector, those sectors that are currently suffering most are the services to companies and local authorities, the agri-food, paper-wood and transport sectors.


Difficult adjustment efforts

Despite the weakness of the economy and the growth in the public debt, investors have, so far, retained their appetite for French debt, which was, at the end of May 2014, still being traded at historically low rates. The budget deficit is slowly reducing. The weight of public expenditure however remains one of the highest in the Eurozone (57% of GDP), with means a high tax burden, well above the European average. The high tax and social security burden and wage rigidity continue to weighs on corporate profitability and development. The government is hoping to enhance in a sustainable way corporate productive capacities thanks to the implementation of the Pacte de Responsabilité et de Solidarité (Responsibility and Solidarity Pact), which complements the Crédit d’Impôt pour la Compétitivité et l’Emploi (CICE) (Competitiveness and Employment Tax Credit) and should help drive down labour costs by means of a significant reduction of employers' social security contributions on low wages. Companies should also feel the positive impact of a gradual reduction in taxes and a simplification of administrative procedures. The government’s room for manoeuvre however has been seriously limited following the Socialist Party’s bitter defeat and the rise of the National Front in recent municipal and European elections, which could hamper the implementation of the Pact and of far reaching reforms.



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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