(Bloomberg) --

France’s state guaranteed lending program will weigh on public finances less than expected as the strength of the economic recovery has taken the government by surprise and will help firms repay loans. 

Speaking to business leaders at a conference in Paris, Finance Minister Bruno Le Maire said he keeps revising down how much the 142 billion euros ($165 billion) of guaranteed loans will cost the state from an initial estimate of 5 billion euros. 

The loans were a central plank of France’s strategy to do “whatever it costs” to protect businesses and workers during Covid lockdowns. That included around 35 billion euros of spending on grants and around the same amount on the state’s furlough program.

“We really gambled by saying we would inject massive sums of public money to protect employees, skills and companies,” Le Maire said. “It was an extremely audacious choice that turned out to be the most responsible and judicious choice.”

The state will provide case-by-case help for the “very small number” of businesses that could struggle to start repaying the state guaranteed loans in the spring, Le Maire said. While there will be no overall extension of the program, he said the state is prepared to extend the period for companies to pay delayed taxes to three years from two currently. 

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