French Economy and Finance Minister Bruno Le Maire announced a €45 billion aid package for small businesses and other hard-hit sectors of the economy | Eric Piermont/AFP via Getty Images France injects billions into stimulus plan amid coronavirus chaos The €45B package will mainly take the form of reduced social security contributions for businesses.

PARIS – France is trying to avoid an economic catastrophe by injecting billions into its coronavirus-hit economy.

French Finance Minister Bruno Le Maire on Tuesday announced a €45 billion aid package for small businesses and other hard-hit sectors of the economy. More than 3.5 million businesses could be impacted by confinement measures announced Monday, which suspend many economic activities in the country.

The government also pledged to support lenders during the downturn.

“We’re going to put €45 billion on the table to help businesses … We will guarantee bank loans up to €300 billion,” Le Maire said on French radio station RTL. “At the European level, we decided yesterday on one trillion in guarantees from member states for bank loans to ensure that there is liquidity and cash flow,” he added.

The €45 billion stimulus will mainly take the form of reduced social security contributions for an amount of €35 billion, which the state could partly claw back later. Unemployment benefits linked to forced part-time employment will cost the government €8.5 billion, while a solidarity fund for the self-employed and shopkeepers will require at least €2 billion.

The cost for state coffers, however, is likely to be much higher when factoring in lower tax revenues that will result from the crisis, according to Le Monde.

Le Maire said the French government is expecting a 1 percent drop in gross domestic product and a recession in 2020. As for public debt, it will exceed 100 percent of GDP this year, the minister confirmed.

He added that special measures could be taken to support the aeronautic industry, which has taken a blow due to the coronavirus outbreak. For Air France alone, the drop in activity will reportedly reach 90 percent, French newspaper Les Échos reported.

"[Air France's CEO] Ben Smith told me [last week] he was going to cut activity by 80 percent. This is an unprecedented shock in Air France's history," Le Maire told the press. "We have tools to support Air France or to support any strategic company that is attacked in the markets," which may involve "recapitalization, equity investments or even nationalization" he later added.

The EU's transport ministers are scheduled to meet via teleconference on Wednesday to discuss measures to help the sector.

Last week during an address to the nation, Emmanuel Macron hammered home the French response to coronavirus, saying that the state would act to safeguard the production capacities of companies "whatever it costs," he repeated three times.

Macron announced Monday evening that the government would postpone reforms of the unemployment insurance and pension systems, a move which will also cut the French state off from new revenues.