EMCC European Monitoring Centre on Change

France: ERM Comparative Analytical Report on ‘Public policy and support for restructuring in SMEs’

  • Observatory: EMCC
  • Topic:
  • Published on: 13 May 2013

Sebastian Schulze-Marmeling

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

French policy-makers have been discussing public support for SMEs for more than 40 years now. In 2012, comprehensive structures are in place that offer specific support measures to small and medium-sized enterprises. Moreover, there is a wide range of instruments at different levels that were specifically designed for SMEs. The large majority focuses on access to finance through loans and loan guarantees, which is reported to be more difficult for small companies. It has been criticised previously that few coordination exists between the wide offer of support instruments, as well as between the national, regional and local level. There are, however, numerous information resources that seek to give an overview of the extensive offer.


Part 1: Overall policy context

1.1. Has there been public or policy debate on the specific challenges for SMEs and/or their employees in restructuring before the global recession of 2008/09? Please specify, for example:• If so, since when (e.g. up to 3 years before, 3-10 years before, longer), at which level (national, regional, sectoral, all of them) and in which form (‘real’ policy debate mirrored in policy documents or rather public debate mirrored in media, or both)?• Which policy areas (for example, SME policy, entrepreneurship policy, employment policy, social policy, regional policy etc.) were involved? Particularly: Does SME policy specifically deal with restructuring? Does ‘restructuring policy’ specifically deal with SME issues?• Did the public and policy discussions deal with restructuring as such or were specific types or phases of restructuring covered?• Which were the issues/contents that have been discussed? Which specific characteristics of SMEs in restructuring were considered in this context? Was the specific case of SMEs as subcontractors a topic for discussions?• Did the discussions rather deal with the enterprise perspective or with the employee perspective or both?

French public policy has been concerned with the specific challenges of SMEs since the 1970s. Following examples from the US, risk-capital funds were set up to facilitate access to finance for entrepreneurs and managers of SMEs. The French Society for Financial Guarantees for SMEs (Société française de garantie des financements des PME, Sofaris), which later became part of the Development Bank for SMEs (Banque du Développement des PME, BDPME), was founded in 1978. BDPME-Sofaris also provided assistance for SME restructuring. They merged, together with the National Agency for Promoting Research (Agence nationale de valorisation de la recherche, ANVAR), which provided research funding to SMEs since the 1980s, to form the support agency for the development of SMEs, Oséo, in 2005. Oséo offers a wide range of information, services and funding to SMEs.

More specific measures to help the restructuring of SMEs also predate the crisis. In 2007, for instance, the European Commission approved a provision proposed by the French government that allowed the state to provide financial aid to SMEs that were threatened by bankruptcy. These companies could receive support in the form of subsidies, loans, or debt guarantees on market conditions from central, regional and, in particular, local authorities. The aid was supposed to ‘allow companies to elaborate a restructuring plan’ and ’to restore the company’s viability as soon as possible’. Application should be justified by serious social concerns in case of bankruptcy. The programme is running for six years.

The section above seeks to illustrate that a policy debate about the special situation of SMEs has been taken place in France for quite a while now, and it has lead to tangible outcomes. Granting access to finance has been at the core of most of these debates. Some observers claim that this mode of support is heavily inspired by US-style policies, in particular the 1953 Small Business Act that led to the creation of the Small Business Administration – an authority that resembles the French Oséo. It is difficult to track down when specific tools were developed to help SMEs in restructuring. The earliest measures that could be identified and that explicitly aims at restructuring are those offered by BDPME-Sofaris after its creation in 1997.

1.2. Did the global economic and financial crisis of 2008/09 cause any change in focus of the above (for example, increased/decreased focus on SMEs and their employees in restructuring, change in policy areas or issues covered)?

In October 2008, the Fillon government announced a major €22billion plan earmarked to help SMEs with fewer than 250 employees to get through the crisis. The large proportion of the money came from deposits made to the corporate Sustainable Development Saving Plan (Livret de développement durable, LDD, €8 billion) and the individual Popular Saving Plan (Livrets d'épargne populaire, LEP, €9 billion). The government transferred this money to the banks, which could borrow it exclusively to SMEs. The lending process is monitored on a monthly basis. In order to assure that the savings will not be lost, the government also issued guarantees for the credit schemes so that no money would be lost from the LDD and LEP saving accounts, even in the event of considerable credit defaults.

Moreover, the Deposits and Consignments Fund (Caisse des dépôts et consignations, CDC) allocated additional funds to the support agency for the development of small and medium-sized enterprises, Oséo. Hence, Oséo’s budget for granting easily accessible credit for innovation and expansion of SMEs was augmented by 50% for the years 2008 and 2009, from €4 billion to €6 billion. Parts of this money were earmarked to transform SMEs’ short-term debts into long-term credit. Moreover, Oséo’s budget for granting loan guarantees was increased by €3 billion for the same period.

At a conference of the most important employers’ association for SMEs, the Confederation of Small and Medium-Sized Enterprises (Confédération Générale des Petites et Moyennes Entreprises, CGPME), then-President Nicolas Sarkozy announced a further package of €2 billion for SMEs in economic difficulties. The money was aimed at strengthening the SMEs’ equity capital basis. Half of the money, the President announced, were to be managed by the Strategic Investment Fund (Fonds stratégique d'investissement, FSI). One-third of FSI’s additional budget was reserved for direct investment into SMEs with strong growth potentials; another third of the money was to be invested into regional venture capital funds; the rest was dedicated to directly strengthen SMEs’ equity basis using convertible bonds. President Sarkozy further announced that Oséo was to receive the other €1 billion. The additional funds were intended to provide quickly accessible long-term loans at low costs.

During the same event, Nicolas Sarkozy announced a range of further instruments to help SMEs during the crisis. Most notably, the government had already, in 2008, introduced a general exemption from employers' social security contributions for all those managers of very small businesses (less than ten employees) that had hired new personnel. This measure was extended until early 2010. Moreover, additional incentives for SMEs to hire young apprentices were announced.

There is little doubt that politics, and in particular the French government, have spent a substantially increased amount of attention to SMEs during the crisis. This may be illustrated by online newspaper headlines from recent years, such as ‘Nicolas Sarkozy in support of SMEs’ (Le Monde, 05/10/2009), ‘Sarkozy, SMEs’ paymaster’ (Journal du Dimanche, 05/10/2009) or ‘Sarkozy to help SMEs’ (Le Huffington Post, 23/10/2008). Jean-François Roubaud, president of the CGPME, said, in December 2011, that ‘there have rarely been that many important measures from the government. I’m always carrying with me a sheet of paper that summarises [...] what has been done for the SMEs in five years. People tend to forget that’.

The focus, however, has changed little. Just as before the crisis, most public policy measures emphasised SMEs’ access to finance. Most instruments are, however, designed more generally and not specifically for restructuring, although almost all measures are also available for SMEs in restructuring. More recently, some efforts have been made to boost employment in small and medium-sized enterprises.

Moreover, most recent developments seem to confirm that also the new socialist administration will pursue a similar strategy. On 7 June 2012, the daily newspaper Le Monde reported that the new Minister of Finance, Pierre Moscovici, has announced the creation of a new public investment bank to be set up in January 2013. The new structure, which will supplement the existing institutions, will invest in and provide loan guarantees for innovative SMEs in ‘sectors of future strategic importance’, namely sectors concerned with new energy sources, IT, the ‘social economy’, and export-oriented activities.

1.3. Are social partners or employers’ and employees’ organisations involved in public and policy debate on restructuring in SMEs?• If so, which (types of) organisations and at which levels?• What are their opinions, perspectives, recommendations?• Did they succeed in convincing governments or public authorities at various levels of their viewpoints?

Virtually all major efforts to support SMEs in restructuring are state-driven. The most important employers’ associations, CGPME and the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), seem to play a role in lobbying policy and usually had a positive opinion of the government’s SME support plans during the crisis. They also expressed claims, such as the exemption from employers' social security contributions articulated by the CGPME, which were often met by the government. It is extremely difficult, however, to identify a more active role of social partners in the debate or implementation of these measures. An online search on the CGPME website for ‘restructuring’, for instance, did not yield any results at all. Similar attempts in Medef’s online archive were similarly unsuccessful.

Part 2: Support instruments

2.1. Please provide an overall assessment about how accessible and suitable public and social partner based restructuring support for companies in general are for SMEs or their employees.• Do SMEs and/or their employees generally have access to the available instruments and are these suitable for their specific needs in restructuring?• Are there specific (types of) instruments (for example, targeting specific types or phases of restructuring, offered at specific administrative levels) that are more/less accessible and suitable for SMEs and/or their employees that for larger firms? If so, why?

As discussed above, there is a considerable range of institutions that takes special care of SMEs. Most notably, these are Oséo, the FSI and CDC, which have been briefly presented above. All of these institutions do offer tailor-made support measures to SMEs, some of which place a special emphasis on restructuring. In addition to that, there are a huge number of local and regional measures to support SMEs. These instruments are offered for different types of companies (there are, for instance, particular programmes for ‘innovative’ SMEs), for different types of economic difficulties, and some measures are only available for certain sectors. Moreover, support instruments are offered at national, regional and local level, by a range of actors.

Hence, it is difficult to assess the overall accessibility of support for SMEs. A fair assessment might be that the access to information about the variety of instruments is easy and comprehensive. For instance, all the major financial institutions to support SMEs have extensive information available online (Oséo (http://www.oseo.fr), in particular, but also the FSI (http://www.fonds-fsi.fr/) and CDC (http://www.caissedesdepots.fr). Moreover, Oséo has a network of 37 regional branches, each of which is connected through a network of local partners.

In terms of measures, there is a comprehensive online database that provides substantial information about available public support instruments, the Business Support and Economic Development Observatory (Observatoire des aides aux entreprises et du développement économique, http://www.aides-entreprises.fr). The website lists an impressive amount of information on support instruments that can be filtered by region, sector, and type of support. Moreover, the government has launched another online information resource aimed at SMEs. The internet portal http://pme.service-public.fr was set up in 2006 and contains extensive information for SME managers. Furthermore, there is a searchable database that lists local contact points for a range of issues, including economic or financial difficulties.

Both of the latter address a problem that has been articulated in an official assessment of state aid to enterprises more generally. The report, which was published in 2003, criticises the lack of a coherent concept of state support instruments. The availability of measures at the local, regional and national level is not supplemented by an organisation that has an overview of the measures available. It is further argued that there is no national coordination or evaluation of state support, which makes it impossible to pursue a coherent strategy. Although a more recent evaluation of public support instruments could not be identified, there is no evidence that this has changed substantially since the publication of the report discussed here. The internet resources that were made available in recent years, however, at least seem to facilitate access to state support for SME managers in search of support.

2.2. Do there exist specific public or social partner based support instruments explicitly targeting at SMEs and/or their employees in restructuring? Please specify, for example:• If so, by whom are they offered (public vs. social partners/employers’/employees’ organisations) and at which administrative levels (national, regional)?• Are the activities of different support service providers coordinated? If so, how and how well does this work?• Which phases of restructuring do they target?• Which types of restructuring do they target?• Do they target SMEs in general, or specific size classes, sectors, regions, legal forms, roles (for example, as subcontractors) etc.? Do they target employees of SMEs in restructuring?• What type of support do they provide? What specific challenges for SMEs in restructuring do they address?• Is there some information about how well they are known among SMEs and their advisors and about how they are generally assessed by the SME sector? What are their strengths and weaknesses? Are there recommendations for improvement?

As discussed more extensively above, there is a wide range of support instruments explicitly targeted at SMEs. Since it is difficult to provide an exhaustive list of all measures available and since there is no national authority that coordinates activities at lower levels, this section briefly outlines the main functioning of the major actor in supporting SMEs restructuring, Oséo. Moreover, some examples of local or regional support instruments are presented.

Oséo is a public-sector holding company that reports to both the Ministry for the Economy, Finance and Industry, and the Ministry for Higher Education and Research. Its aim is to back innovation and growth of SMEs by facilitating their access to finance. Oséo has three major business lines:

  • Innovation support and funding
  • Guarantees for bank loans and equity contributions
  • Financing for investments and working capital requirements

In addition to its financial activities, Oséo also provides SMEs with consulting services and establishes contacts to other important actors in the field. As mentioned above, Oséo’s role is considerably larger than just supporting SME restructuring. There seems to be a particular focus on innovative sectors, although SMEs from all parts of the economy may apply for support. The biotechnology and pharmaceutical sector, for instance, has been identified as a sector with constant growth, but also increasing difficulties to attract investment due to the financial crisis. Two-thirds of the companies in that sector are less than ten years old and employ fewer than ten people. For these, it is particularly difficult to attract equity capital in times of crisis. Thus, Oséo’s General Secretary, François Drouin, has announced that ’it is a sector that has experienced substantial restructuring over the last couple of years, which has been accelerated by the crisis. Oséo shall accompany this restructuring by helping [these companies] to enter the market and to follow their development as long as possible’. Thus, Oséo has invested, in 2009, €91 million in 283 projects in the sector. 10% of the innovation support funding was invested in biotechnology and pharmaceutical companies.

Similar – mainly financial – support instruments are also available at lower levels. The Ile de France region, for instance, offers subsidiaries of up to €300,000 to SMEs for the implementation of a restructuring plan. The total amount of the support depends on the number of employment saved and covers a maximum of 50% of the costs. The department of Côtes d'Armor also provides financial support for SMEs in restructuring. Companies from all sectors may apply for an advance payment or a loan guarantee to help them realise a restructuring plan in order to save employment.

One of the few exceptions to primarily financial support is funded by the National Ministry of the Economy. The measure provides companies with fewer than 400 employees in a financially difficult situation with consultancy services. The funds shall be used to conduct a detailed diagnosis of the company and its sector, on which a restructuring is to be based. Moreover, mediation between the enterprise, its shareholders, banks, partners and customers may be supported, if necessary.

Part 3: Good Practice

  • Name of the instrument in national language and English:

National Fund for the Renewal of Disadvantaged Areas (Fonds National de Revitalisation des Territoires, FNRT)

  • Justification for selecting this measure as Good Practice:

The measure does not aim at particular SMEs, but at regions that have been suffering from economic restructuring and did not receive appropriate support from other sources previously. The local prefect asks the National Administration Council to check if the department under their responsibility is eligible to gain the status of a ‘disadvantaged region’. If the status is granted, a Local Steering Committee is set up, which is chaired by the prefect and consists of representatives of the Regional Directorate for Business, and the local branches of Oséo and CDC. The Steering Committee then collects project proposals from local businesses and receives, eventually, funding for them. A National Steering Committee (Comité stratégique d’orientation, CSO) decides about the funding of the projects. The measure is of particular relevance because it is relatively large in scope and involves numerous actors at different levels. Moreover, the bottom-up approach is of interest.

  • Date of launch of the instrument and end date (if applicable):

March 2009

  • Initiator/administrator (organisation):


  • Other involved actors and their roles:

Funding and Administration

Ministry of the Economy, Industry and Employment (Ministère de l’Économie, de l’Industrie et de l’Emploi), now Ministry of the Economy, Finances and Industry

Deposits and Consignments Fund (Caisse des dépôts et consignations, CDC)

Coordination of the National Steering Committee

Ministry of Labour, Employment and Health (Ministère du travail, de l’emploi et de la santé)

Ministry of Agriculture (Ministère de l'Agriculture)

Inter-ministerial Delegation for Territorial Planning and Regional Attractiveness (Délégation interministérielle à l'aménagement du territoire et à l'attractivité régionale, DATAR)

  • Source of funding:

The measure is mainly funded by the Ministry of the Economy, Industry and Employment and CDC, but also by the other ministries involved (see above). As of November 2011, the instrument had a total budget of €135 million.

  • Target group/eligibility/coverage:

In order to be eligible for FNRT funding, the company has to be situated in an area that has been granted the status of a ‘disadvantaged region’ and in operation for at least three years. In addition, the enterprise must fulfil one of the following conditions:

  • SME with more than ten employees
  • Company with less than 500 employees if it does not belong to a group that employs more than 5,000 people
  • A company with less than 500 employees that is in operation for less than three years if it is the result of a takeover of an enterprise that had been bankrupt
  • Phase of restructuring targeted:

Management of restructuring

  • Type of restructuring targeted:

Access to finance for various restructuring types

  • Purpose/content/characteristics/description of services provided:

Oséo is provided with funding to grant loans without security or loan guarantees of €100,000 to €1 million that helps them to create or maintain between 10 and 500 jobs. Loans have to be paid back within five to seven years.

  • Outcome of the instrument (e.g. number of beneficiaries, effects):

Latest figures available show that, at the end of 2010, €100.5 million had been allocated to business. At the same time, Oséo had granted 202 loans to revitalise disadvantages regions. Thus, the members of the National Steering Committee gave a positive review.

  • Strengths/success factors of the measure:

Decentralised and good use of local structures to evaluate the actual need of the company

  • Weaknesses/bottlenecks of the measure:

SMEs that are not located in a designated area do not benefit from this measure.

  • Was the instrument formally monitored/evaluated? If so, please specify (by whom, how, what were the finding and how were the findings used etc.)


  • Weblink:


  • Information sources used for filling this section:







As this report attempted to show, there is a wide range of support instruments available to SMEs. A core problem remains the coordination between the different measures as well as their organisation at different levels, national, regional and local. There are, however, a number of comprehensive online information resources available, which SME managers can easily access to find appropriate measures. Another asset might be the development of Oséo’s regional and local networks.

A striking characteristic of the French system of the support system for restructuring in SMEs is the strong focus on financial aid. Most measures identified placed a strong emphasis on access to finance, which is indeed often reported to be a key concern of small companies. Nevertheless, a promising idea might be to offer increased support with the anticipation and management of those problems that lead to restructuring, rather than just following the process.

Sebastian Schulze-Marmeling, IRShare

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