Coface Group


Population 63,951 Million
GDP 2902,33 $US billion
Country risk assessment
Business Climate
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main economic indicators

  2012 2013 2014 2015 (f)
GDP growth (%) 0.3 0.3 0.4 1.1
Inflation (yearly average) (%) 2.2 1.0 0.6 0.1
Budget balance (% GDP) -4.9 -4.1 -4.2 -3.9
Current account balance (% GDP) -1.5 -1.4 -1.1 -0.1
Public debt (% GDP) 89.2 92.4 95.1 97.0


(e) Estimate  (f): Forecast


  • Quality of infrastructures and public services
  • Skilled and productive workforce, demographic dynamism
  • Competitive international groups (aeronautics-space, energy, environment, pharmaceuticals, luxury, agri-business, distribution)
  • Leading tourist destination, world agricultural power
  • High savings level


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

Risk assessment

A recovery is taking shape, driven by momentum in household consumption

During Q1, French growth was at its highest level since spring 2013 (+0.6% relative to the previous quarter). Household consumption, the main driver behind growth, witnessed a sharp rebound in Q1 2015 (+0.9%) prompted by an improvement in consumer purchasing power. Real revenues increased by 1.3% on the back of weak energy prices and lower growth in mandatory contributions. In addition, the rebound in growth combined with the roll-out of the tax credit for competitiveness and employment (CICE) (Credit d’Impôt pour la Compétitivité et l’Emploi) and the responsibility and solidarity pact helped stabilise the unemployment rate (which hit 10% on average in metropolitan France in Q1 2015). However, despite the recent upswing to reach 94 in June 2015, the INSEE household confidence index remains well below its long-term average of 100.  

Corporate spending picked up slightly in early 2015. Oil price weakness and the new CICE tax credit improved profit margins for companies, which are also benefiting from the decline in financing costs. In addition, the ramp-up in manufacturing output and the hike in domestic and foreign demand have improved the outlook for French companies. The business climate index therefore jumped clearly, posting its highest level since 2011. In contrast, residential investment plummeted thereby weakening the construction sector in particular.  

Weakness in the euro is underpinning French exports, which rose by 1.1% during Q1 2015. The slowdown in emerging markets and especially in China has had little effect on France, which, according to INSEE indicators, benefited in early 2015 from the increase in global demand for French products. In addition, low oil prices have also helped reduce energy bills. However, imports increased at a higher pace than exports (+2.6% over the same period) and the contribution from foreign trade to French growth was therefore negative during Q1 2015. 

After entering negative territory at end-2014, inflation moved back into the black slightly in April and May 2015, albeit remaining low (+0.3% year-on-year). This trend is likely to continue to end-2015 in view of the recovery in energy prices.    


Companies financially fragile and still high default levels 

After sinking to its lowest level since 1985, the profit margin for non-financial companies picked up in Q1 2015 to reach 31.1% (vs 29.5% on average in 2014). The reason for this was lower energy bills, the CICE tax credit and the lighter company contributions planned for in the responsibility and solidarity pact. However, while the profit margin is currently at its highest level since 2010, it is nevertheless still below its pre-crisis average level.  

In this context, the number of business insolvencies has fallen, but remains at a high level (61,829 cumulative cases as of end-June 2015, down 2.9% relative to June 2014). The construction sector still harbours the largest number of insolvencies (31% of the total). Other sectors have also seen their situation deteriorate, such as agri-food (milk, beef and pork) and individual services (including hotels and catering).


A difficult period of adjustment and a slow reform process

Despite the economy weaknesses and the steady growth of the French public debt, investors have so far remained eager to fund the debt. The 10 year bond interest rate is rising but remains low (around 1% in june 2015). The budget deficit is nevertheless struggling to decline with the weight of public spending remaining one of the highest in the Eurozone (57% of GDP). The country has obtained a reprieve from Brussels to return below the 3% limit of GDP in 2017. The government has committed to a reform process, aiming at a supply based policy to overcome the problem of competitiveness.

After a parliamentary battle lasting several months, the law on growth, activity and equal economic opportunities (also known as the Macron law after the Minister of the Economy), was adopted in July 2015. This law plans a number of measures aimed at freeing up the French economy and softening regulations in order to stimulate activity. Among the emblematic measures are the liberalisation of Sunday working and professions regulated by law.  

However, savings targeted until 2017 (€50 bn) will not be easily achieved. The effective implementation of the announced reforms could well turn out more difficult than expected. In addition, beyond the measures taken to improve competitiveness (CICE, Pacte de solidarité), further efforts could be required by the European Commission to improve the sustainability of public finances and reduce labour market rigidities. The current reforming policy of the government feeds growing dissensions within the socialist majority.


Last update: 17th July 2015 



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 internalEuropean 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.

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 2015
Payment incident index France 2015
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