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(e) 2015 (p)
GDP growth (%) 0.4 0.4 0.4 0.8
Inflation (yearly average) (%) 2.2 1.0 0.6 0.7
Budget balance (% GDP) -4.9 -4.1 -4.4 -4.3
Current account balance (% GDP) -1.5 -1.4 -1.3 -1.4
Public debt (% GDP) 89.3 92.2 95.8 99.3


(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
  • Insufficient innovation effort, low level of product range
  • High level of public debt
  • Low employment rate of young and older workers

Risk assessment

Slow recovery, restricted by high unemployment rate and lack of competitiveness

Unlike public consumption, household consumption, the traditional French growth support, has only been growing very slowly, held back by rising unemployment (up to an average of 9.9% in metropolitan France in the 3rd quarter 2014) and low level of energy spending. Despite a recent upturn, the INSEE index for household confidence is still at a level well below its long term average. Business investment continues to contract despite credit terms that are more favourable than in most other Eurozone countries. However, companies do not manage to restore their profit margins – which are among the lowest in the Eurozone -, production capacities remain underutilised and business confidence is very low. Housing investment has declined further, contributing to the weakness of the construction sector. As a result of the lack of competitiveness, exports growth does not follow the pace of world trade. There should however be a slight improvement in growth in 2015. Private consumption should benefit from low inflation and a small rise in employment. The pace of foreign sales should pick up thanks to the depreciation of the euro and the strengthening of global demand, while imports acceleration should be limited due to the energy bill reduction. Investment is expected to stabilize in 2015. Labour cost should rise less rapidly but the full impact of theCrédit d’impôt pour la compétitivité et l’emploi (CICE, Competitiveness and Employment Tax Credit) and thePacte de responsabilité et de solidarité (responsibility and solidarity Pact) will only be felt in the medium term. Companies are currently focusing on building their cash reserves or cutting their debts rather than on starting new development projects.

Inflation should remain low because of the limited recovery in domestic demand and the fall in energy costs.


Financially fragile companies and an insolvency rate that remains high

French companies continue to be handicapped by their low profit margins (down to 29.4% in the 2nd quarter 2014) and rate of self-financing (76%). Mainly modest sized and generally not very innovative, they are also underrepresented in the top segment of the range products and export markets, in particular to emerging markets. The number of business insolvencies remains at a high level although it seems to initiate a decline in recent months (63,000 cases in a year at the end of October 2014 compared with just over 64,000 at the end of April 2014). These insolvencies impact on fewer employees but the financial cost borne by the suppliers is slightly rising again due to recent receiverships of intermediate size companies. The construction sector still concentrates the highest number of insolvencies (33% of the total). Other sectors are also experiencing a worsening in their situations, including agri-business and services to individuals (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 has even fallen below the 1% level. 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, in 2013, two additional years from Brussels to return below the 3% limit of GDP in 2015. This objective is not going to be achieved despite the additional measures announced by Paris in response to criticisms from the European Union. It has now been further postponed to 2017.

The government has committed to a reform process, aiming at a supply based policy to overcome the problem of competitiveness. It mainly includes a reduction in companies’ charges, funded by reduced spending. Compagnies should also benefit from a simplification of administrative procedures and the government is considering a draft bill on growth and activity covering in particular Sunday work liberalisation and regulated law professions. 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.



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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