Business bankruptcies in France 2000-2022

The number of business failures in 2022 was much higher than in the previous years. In 2021, just 27,539 businesses were unable to meet their financial obligations, such as paying salaries or suppliers. That was one of the lowest bankruptcy figures of the past decade. There was also a low number of bankruptcies in 2020.

COVID-19 and business failure, a paradoxical situation

That contrasts a lot with the evolution of the GDP in France, which fell by roughly than eight percent in 2020. The French state played an essential role in preventing the bankruptcy of many companies. As early as March 2020, short-time working was implemented, as well as tax exemptions or loans guaranteed by the state. This guaranteed loan allowed companies to pay their suppliers and thus avoid a domino effect of payment defaults and company closures.

A soaring national debt

As a consequence of those and other measures implemented by the French government, it was possible to avoid an increase in business closures and steep rises in the unemployment figures. In fact, the unemployment rate in 2020 was somewhat lower than in the previous year. However, putting in place those measures to protect the French economy was not cheap. That caused the French national debt to GDP ratio to rise sharply between 2019 and 2020, from approximately 97 percent to nearly 115 percent of France's GDP.