Government steps as insurers fail to cover small firms

The French government is today expected to detail plans to offer credit insurance to small and medium-sized French business, to hep them survive the global credit crisis, Reuters reports.

European credit insurers are increasingly pulling their cover from companies, which could heighten the risk of default. The UK business body the CBI has called the UK government to become the credit insurer of last resort in a similar move.

The French plan will be unveiled by Economy Minister Christine Lagarde at a meeting with credit insurers, French employer organisation MEDEF, Chambers of Commerce and others.

Credit insurers, such as Euler Hermes, part of Allianz, Coface, a unit of French bank Natixis, and Britain's Atradius, cover about €320bn (£269bn) or about a quarter of credits distributed among companies in France, the ministry said.