Economic crisis: Wave of bankruptcies for French SMEs and mid-caps

AFP/Archives – Stefani Reynolds Bruno Le Maire, former Minister of the Economy, April 12, 2023.

This year, while bankruptcies are exploding, it is SMEs and ETIs that are the first to collapse. The “return to normal” that was promised for the post-Covid period is flying away, because today's suffocating economic conditions leave little chance to these companies and threaten the jobs of some 250,000 people. So much so that those involved in restructuring are struggling to see the light at the end of the tunnel, and fear a crisis as severe as the subprime crisis of 2009.

Behind the alarming figures, it is the very heart of the local economy that is faltering. Once flourishing companies, such as Valeo or SPI, are now on a knife edge. “We are seeing increasingly large structures that can no longer cope,” notes Christian Bagnaud, president of the Le Mans commercial court. In 2024, the number of bankruptcies jumped by 24% compared to 2019, reaching levels comparable to the 2009 crisis, according to BPCE figures. A situation revealing an economy in silent decay, far from the simple post-Covid “return to normal”.

SMEs and mid-caps, once considered more resilient than very small businesses, are collapsing under the weight of debts accumulated during the pandemic and successive crises. France deplores “57% increase in failures for SMEs-ETIs compared to 19% for VSEs”, recalls Alain Tourdjman, director of studies at BPCE. As explained by Les Echos, this return to reality is made particularly difficult by the end of public aid, a drop in household demand and the increase in tax burdens.

Unsurprisingly, employment is looking grim. “250,000 jobs are threatened this year, or 43% more than in 2019,” adds Tourdjman. Behind these figures, lives and entire territories are wavering, particularly in regions such as Aquitaine, but also Île-de-France. Other regions, such as Hauts-de-France, are holding up better. If BPCE's forecasts come true, 2025 could prolong this haemorrhage with a “high tide” of bankruptcies, threatening employment even more. It remains to be seen what the new government has in store for us to get things back on track.

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