France extends multi-billion-dollar COVID-19 furlough scheme
Ross Cullen in Paris
France's furlough scheme will be extended for hotels, cafes and restaurants. /AFP

France's furlough scheme will be extended for hotels, cafes and restaurants. /AFP


The French government has announced its temporary unemployment scheme, through which the state pays all an employee's salary, is going to be extended until the end of this year for all hotels, cafés and restaurants affected by the crisis.

As the COVID-19 pandemic struck and lockdown was enforced, the French government rolled out a huge furlough scheme to avoid mass bankruptcies and redundancies. 

The hospitality sector was especially hard-hit as restaurants closed, holiday bookings dried up and travel restrictions forced visitors to stay at home.

"The introduction of the furlough scheme was very important and it worked well. It allowed us to preserve the maximum number of jobs," hotel manager Emmanuel Sauvage told CGTN Europe.

"However, by the end of the year we may have a 25 percent decrease in the number of employees."



"The furlough scheme is going to be complicated to manage in the long term because it gives the right to paid leave," said Sauvage. 

"We have zero turnover but have to pay for vacations. So this situation is going to be hard for companies.” 

Spending was at the heart of the government's 2021 budget but also sector-specific measures, including aid to the hospitality industry. 

"I want to tell all restaurant owners, hotel owners, coffee shop owners, all those who wonder what their future holds – we will stay by your side and we will keep working to allow you to overcome this extraordinarily difficult moment with the smallest impact possible," said the finance minister, Bruno Le Maire. 

But while businesses welcome governmental support, some analysts are concerned by the state's largesse. 

"The pillars of the recovery plan, particularly the focus on greener policies and the relocation of activity, are not correlated with this financing of furloughing," Nadine Lervratto, an economist, told CGTN Europe. 

"So companies are, in a way, encouraged to do nothing, to stay put, to continue as usual while they are given help."

Another issue the government has faced is furlough fraud, estimated last month at more than $260 million. 

The government says 50,000 checks have been carried out to ensure the scheme is being used honestly.