In France, the year 2023 saw a record number of business closures since 2017, with 55.5 thousand firms shutting their doors. This figure comes from data released by the Bank of France and reported by RIA News. The forces driving this spike were clear and immediate: a steep rise in energy costs, higher borrowing costs driven by increased interest rates, and tighter financing conditions across the economy.
Bankrupted enterprises were not confined to a single sector. Trade and construction accounted for a large share of failures, with small businesses bearing the brunt. Yet sizeable corporations also faced insolvency pressures, and the scale of large firm bankruptcies rose sharply in 2023, up 72 percent compared with the decade’s average. These patterns reflect a broad tightening of the economic environment that affected firms of all sizes and across multiple industries.
The Bank of France notes that government supports during the Covid-19 crisis helped to dampen bankruptcy levels for a period. However, as fiscal and monetary conditions evolved post-pandemic, the ability of many firms to withstand shocks diminished, and insolvencies resumed an upward trajectory. Historically, the country experienced steadier patterns; from 2000 to 2009, bankruptcies averaged about 49 thousand per year, rising to around 59 thousand per year from 2010 through 2019. These historical benchmarks provide context for the recent shifts and highlight how the current cycle compares with earlier periods of stress.
Beyond the purely economic picture, policy signals and strategic debates have influenced the trajectory of the business environment. For instance, discussions in early January touched on preventive measures to stabilize the economy and questions about the potential easing of sanctions linked to energy and trade dynamics. In the same political cycle, proposals were put forward for a so-called demographic reform program intended to shape long-term social and economic development within France. These conversations reflect a broader effort to align fiscal policy, labor markets, and investment incentives with evolving demographic and global conditions.
Meanwhile, consideration of monetary and digital policy options continued. A parliamentary discussion examined the role of digital currency developments within France and the broader European Union framework. While opinions vary on the potential impact of a digital euro, the overarching goal remains to bolster financial resilience, promote efficiency, and maintain stability in a rapidly changing economic landscape. The recent data from the Bank of France serves as a reminder that the resilience of small and large businesses alike depends on a stable macroeconomic backdrop, timely policy responses, and the ability of firms to adapt to shifting energy and financing costs.