Corporate Welfare in a Time of Pandemic

Olivier Petitjean and Maxime Combes, Multinationals Observatory

France’s biggest companies get richer while the rest get only vague promises to ‘build back better’. A recent report from the Multinationals Observatory follows the money paid out to France’s 40 largest corporations, and what they did (and didn’t) do with it. Here, the findings of that report are analysed, revealing a shocking Covid-recovery policy that benefits the few at the expense of the many.

***en français ci-dessous***

The amounts made available in response to the COVID-19 pandemic are eye-watering. “The time for public spending has come,” according to the French Ministry of the Economy and Finance (informally referred to as Bercy). We are no longer counting in millions but in billions of euros: on top of the tens of billions freed up for the emergency plans in the spring, there have been rescue plans for specific sectors, central bank programmes, and now €100 billion for an economic stimulus plan.

So does this new glut of public expenditure mark the end of austerity and liberalism, as some commentators claim? Or rather, as is more likely, a desire to put the state and its resources at the service of private sector interests alone? While the pandemic holds out bleak prospects for ordinary people in terms of increased poverty and precarity, private companies are being handed cash on a silver platter with very few strings attached and minimal enforcement.

All CAC 40 companies given public money

In a report entitled ‘Allô Bercy? The CAC 40 companies profiting from public aid for coronavirus’, the Multinationals Observatory highlights the multiple sources of public funds, direct and indirect, received by large French corporations since the start of the COVID-19 pandemic. The findings are telling, with all 40 companies listed on the CAC 40, France’s benchmark stock market index, benefiting from public support of some kind.

The support itself takes many forms and covers a multitude of circumstances. In addition to the furlough scheme (chômage partiel) for businesses affected by the pandemic, state-guaranteed loans and tax deferrals, other forms of support include emergency plans for specific sectors (automotive industry, tourism, aviation, and so on), the European Central Bank’s (ECB) bond-buying programme, provisions to protect so-called ‘strategic’ firms, investment grants, and a €10 billion annual cut in ‘production taxes’.

While this support amounts to hundreds of billions of euros, there is no close public monitoring of the beneficiaries, the amounts paid out, and whether or not they are justified. Transparency and democratic accountability for the use of these public funds are sorely lacking. Business confidentiality and tax secrecy are cited as grounds for the lack of transparency, making it extremely difficult to have a meaningful democratic debate on the conditions and rules for awarding state aid to large companies.

The Multinationals Observatory report is therefore based on data from documents published by CAC 40 companies as well as information put out by the trade press and/or mainstream media, in particular with regard to the furlough scheme and job cuts. Despite these limitations, it shows how these corporations are being drip-fed public money, even when they have enough cash to continue paying out substantial dividends to their shareholders.

Rewarding shareholders rather than serving the public good

2020 was set to be a record year for dividends, with CAC 40 companies due to pay out €53.2 billion, excluding share repurchases. Aware that such astronomical figures would be frowned upon and anxious to avoid any prolonged controversy over the issue, public authorities and business groups called for ‘restraint’.

The French government even hinted that it would make any public support conditional on the non-payment of dividends. After much procrastination, it substantially watered down this condition so that only access to state-guaranteed loans and deferral of social security contributions require companies not to have paid out dividends, and even then, only for a limited period. All other forms of public support are available to businesses that have paid dividends to their shareholders.

As a result, the call for restraint was only moderately heeded. Barely a third of CAC 40 companies cancelled or suspended planned dividend payouts. Those that did were mostly major banks (BNP Paribas, Crédit Agricole, Société Générale) which were obliged to do so in order to be eligible for bank refinancing through the ECB, as well as large corporations that required massive government support in order to survive the health crisis (Airbus, PSA, Renault, Safran).


The remaining two thirds chose to pay out juicy dividends, with eight even increasing their payouts, including Vivendi (up 20%), Danone (8.2%), Total (4.7%) and Sanofi. Some dividend cuts were clearly just token gestures: L’Oréal and LVMH still managed to pay out over €2 billion to their shareholders, and Axa wasn’t far behind.

France’s top dividend payers, the likes of Total (€6.9 billion) and Sanofi (€3.9 billion), benefited from indirect financial support. In all, €30.3 billion filled the pockets of CAC 40 shareholders in 2020, plus an additional €3.7 billion in share repurchases. This means that at the height of the pandemic, when the economy had come to a standstill and hospitals were short of beds and staff, a total of €34 billion was paid out to shareholders – equivalent to the annual pay of 680,000 nurses.

“You pay my employees so I can pay my shareholders”

In late March 2020, Economy and Finance Minister Bruno Le Maire asked companies to “behave decently: if you’re using the furlough scheme, don’t pay out dividends”. However, this request went unheeded. The government then suddenly decided that the furlough scheme was not state assistance designed to help companies but rather a ‘job-protection shield’ that benefited employees and prevented redundancies. It thus ruled out making it in any way conditional.

As a result, the French state has covered the furlough costs of nearly 12.9 million employees from the corporate sector, while many of these companies continued to pay out generous dividends. One of the most influential bosses on the Paris stock market, Laurent Burelle – chairman of Plastic Omnium and head of AFEP, the main lobby group for French big business – put 90% of his employees on furlough while pocketing some of the €73 million in dividends paid out by his company.

The highly flexible furlough scheme has meant that companies can have a proportion of wages, capped at 4.5 times the minimum wage per employee (around €4,800 net), paid by the state and Unédic, the body tasked with managing unemployment insurance. Emmanuel Macron even spoke of “nationalising wages as we have never done before”, thereby enabling companies to retain trained and skilled employees at a reduced cost.

Almost 70% of large companies (those with 500 or more employees), supposedly robust and often holding substantial cash reserves, didn’t think twice about running to the French state for help. The sums in question are substantial. Capgemini, for example, received at least €91 million from the state to furlough several thousand of its 25,000 staff.

At least 24 companies on the CAC 40 benefited from the furlough scheme, and 14 of these paid out generous dividends. Veolia group, which paid out €284 million in dividends and is now ready to part with €10 billion to buy out its rival SUEZ, used government funds to help pay 20,000 of its employees. Several CAC 40 companies also stand accused of taking illegal advantage of the scheme, including Bouygues’ construction subsidiary.

Public money AND job cuts

Despite this deluge of public funds, there is nothing to stop corporations from bolstering their market value and profitability by announcing job cuts, as Danone has just done (2,000 employees). With government payouts not conditional on job protection, they have been accompanied by announcements of tens of thousands of job cuts, both in France and abroad.

According to figures compiled for the Multinationals Observatory report, CAC 40 companies have announced nearly 60,000 job cuts in total, a quarter of them affecting employees working in France. And many of these job cuts are within companies such as Total, Sanofi and Schneider, which have chosen to maintain generous dividend payouts to their shareholders.

Looking beyond these figures and the scandal of jobs being cut – with or without lay-offs – at a time when the companies concerned are receiving government support, the employees of these companies’ suppliers and subcontractors are undoubtedly in an even worse situation: hit by the cost-cutting measures being implemented by their customers, these employees will bear the full brunt of the economic consequences of the pandemic, with nothing being done by the public authorities to reorganise these value chains.

Many of the corporations concerned had plans to cut jobs and reduce costs anyway, either in the short or longer term. For these listed companies, the aim is to boost the firm’s market value or its operational or financial profitability ratios by making such announcements at regular intervals. The COVID-19 pandemic, and the resulting generous public support, have therefore come as something of a windfall.

The fact that the latest €10 billion of annual tax relief provided for by the stimulus plan is not subject to any job protection conditions undoubtedly shows how sympathetic the government is to the general approach taken by these large corporations.

State failing to set an example as a shareholder

At the start of the lockdown, Minister of Labour Muriel Pénicaud said that the French state would ask “companies in which it is a shareholder not to pay out dividends, as a gesture of solidarity”. This commitment was far from honoured. Three firms in which the state holds shares through the Caisse des Dépôts et Consignations maintained their dividends (Danone, Pernod-Ricard and Vivendi), while two reduced them slightly (Kering and Veolia).

Another CAC 40 company, Orange (in which the state holds a 13.39% stake directly and a further 9.56% through public investment bank Bpifrance), merely lowered its dividend, still paying out €1.3 billion. It intends to pay a normal dividend in 2021, with a down payment of €1 billion in early December 2020.

STMicroelectronics paid out a dividend of €138 million and repurchased shares worth €112 million, despite the fact that it is 27.5%-owned by the French and Italian states and that its supervisory board was chaired by Nicolas Dufourcq, currently general manager of Bpifrance. When the government’s word is largely ignored, what is it worth?

Flouting the public good

Since the start of the epidemic in Europe, we have heard countless public statements by politicians and businesses alike, pledging to ‘build back better’, to take better account of health, climate, social and democratic considerations and, more generally, to pay more heed to the public good.

These promises have not been kept. State assistance has not come with clear and binding ‘quid pro quos’ in terms of wealth-sharing, jobs, environmental protection or fair taxation. For example, much of the assistance has been provided to highly polluting companies and sectors, starting with the automotive and aviation industries.

All attempts to make this public support dependent on clear, ambitious environmental targets have been set aside or very significantly watered down. The government preferred to rely on voluntary commitments from companies rather than introducing binding and verifiable conditions. The objective was clear: to safeguard the existing industrial model as much as possible.

Hence, while talking up electric cars and hydrogen planes as green promises for the future, the government has failed to rethink these two sectors in the light of the COVID-19 pandemic and the climate crisis. Whereas it should have been coming up with plans to reduce our reliance on the automotive and aviation industry for our mobility needs, the government preferred to envision Air France, Renault and PSA gaining market share in the future.

Still as many subsidiaries in tax havens, despite state aid

No one could have objected if the government had made access to state assistance conditional on companies paying their fair share of taxes and not having subsidiaries based in tax havens. However, it ended up backtracking on this too, limiting the condition to tax havens on an official government list that comprises a handful of tropical islands barely used by French corporations.

Consequently, all French companies based in tax havens such as Luxembourg, Belgium, the Netherlands or even Malta remained eligible for public assistance. According to figures compiled in 2019, one in eight (12.6%) of Renault’s subsidiaries is based in a territory considered by experts to be a tax and legal haven. The proportion is even higher for many of the companies that benefited from the furlough scheme, including ENGIE (14.2%), Capgemini (18%), Atos (20.5%) and Michelin (17%).

Shipping group CMA CGM, the world’s fourth largest container transportation company, perfectly illustrates the French government’s muddled approach. It received a state-guaranteed loan of €1.05 billion, as well as payments under the furlough scheme. The French state, through Bpifrance, is a 7% shareholder in the group. These two factors should have prompted CMA CGM not to pay dividends to its owners, yet over USD 85.5 million was shelled out in 2020. What’s more, many of its vessels are registered under flags of convenience. These include Malta, Cyprus, the Bahamas, Liberia and even Panama, despite the latter being on the government’s list of ‘non-cooperative territories’ justifying the refusal of public aid.


Even before the health crisis, government financial support to businesses stood at €150 billion a year, up 230% since 2006. That equates to an average increase of 6.6% per year, far outstripping growth in GDP or welfare. The pandemic has only increased this support, and brought it into the limelight. It could therefore have been leveraged to radically transform our economic system.

As public assistance to the private sector now exceeds the amount paid out in social welfare (family allowance, income support and housing benefit, totalling approximately €138 billion), and bearing in mind the increasing number of restrictions and obligations imposed on welfare recipients, the public authorities should no longer be able to sidestep the debate about subjecting such public interventionism to binding conditions in terms of climate, social and tax obligations.

It is reasonable to wonder whether the government’s current refusal to do this masks, above all, a desire to see the market and systems of production carry on working as before, based on the same principles of financial profitability and shareholder remuneration. Under cover of the billions of euros of public money being paid out to big business, aren’t Emmanuel Macron and his government perpetuating a structural weakening of the state’s role in upholding social, environmental and tax justice, for the benefit of large private interests?

About the authors

Olivier Petitjean is a journalist who co-founded and serves as coordinator of the Multinationals Observatory, an online resource providing in-depth investigations on the social, ecological and political impact of French transnational corporations. He also writes for the independent news source Basta ! ( He is the co-author of the report Allô Bercy ? Aides publiques : les corona-profiteurs du CAC40. This is part of the 2020 edition of CAC40 : le véritable bilan annuel, a report published annually by the Multinationals Observatory (

Maxime Combes is an economist specialising in globalisation, multinational corporations and the climate crisis. He is the author of numerous books on these subjects, and he writes as well for the independent news source Basta! ( He is also the co-author of the report Allô Bercy ? Aides publiques : les corona-profiteurs du CAC40. This is part of the 2020 edition of CAC40 : le véritable bilan annuel, a report published annually by the Multinationals Observatory (

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