Weak consumer spending and business investment brought the French economy to a standstill in the first quarter of the year, with inventory changes and public spending the only factors keeping the euro zone’s second-largest economy from contracting, the Irish Times reported. First quarter data released today missed expectations of analysts polled by Reuters of 0.2 per cent growth. France will now need 0.5 per cent growth each quarter to meet a government forecast of 1 percent growth for 2014, Natixis Asset Management chief economist Philippe Waechter estimated.

A number of lenders to struggling French retailer Vivarte have submitted proposals to restructure the company's 2.8 billion euro ($3.85 billion) debt, banking sources said on Monday, Reuters reported. The plan would lead to an injection of fresh cash and wipe out a portion of existing debt in return for equity, the sources said. Vivarte entered into a four-month conciliation process with its lenders in March to negotiate a way forward after the borrower failed to get an agreement from a majority of its lenders to suspend loan covenant tests.

France is seeking to shorten restructuring disputes after more than 63,000 companies filed for insolvency last year, the most since 2009, according to data compiled by Altares SAS, a French information provider. Creditor advisers say the plans, which come into force on July 1, aren’t sufficient to allow lenders to take control of ailing businesses, Bloomberg News reported. “This reform doesn’t go far enough,” said Arnaud Joubert, a Paris-based restructuring adviser at Rothschild speaking before a conference today in the French capital on the new rules.

France and Germany are squabbling over who should foot the bill for Europe’s banking union, with Paris fearing its banks will pay the biggest share towards a €55bn rescue fund, the Financial Times reported. As the EU enters a potentially decisive week in talks on a central system for handling bank crises, France is fighting plans to make its sector of big universal banks the leading contributors to the common insurance plan.

France is proposing to overhaul bankruptcy rules for the second time in four years to speed up restructuring procedures and give creditors greater powers, Bloomberg Businessweek reported. The measures make it simpler for companies to negotiate with lenders using a court-appointed mediator under a process known as ‘conciliation,’ according to an e-mailed statement from the Ministry of Justice. Under the proposals, businesses will also have to consider alternative restructuring plans put forward by lenders and there will be greater protection for rescue financing offered by investors.

French retailer Vivarte has made a start to restructure its burdensome debt pile by entering a four-month conciliation process, the company announced in a statement on Monday, Reuters reported. A mandataire ad hoc was previously appointed to mediate talks between Vivarte and its lenders after Vivarte failed to get agreement from two-thirds of its lenders to suspend loan covenant tests by a deadline of January 22. In response, lenders appointed financial advisory firm Houlihan Lokey.

French steel maker Ascometal went into administration on Friday, putting at risk up to 2,000 jobs in a fresh headache for the Socialist government as it tries to bring down unemployment from record levels, Reuters reported. Ascometal, whose roots lie in the former French steel firm Usinor that was later absorbed by No. 1 global steel giant ArcelorMittal, has been hurt by an economic downturn in Europe, particularly in the automotive sector. Declining demand in Europe, where Ascometal generates most of its sales, has undermined a 2011 takeover of the company by U.S.

Air France-KLM Group, Europe’s largest airline, is getting a makeover ranging from high-end seats to bigger entertainment screens as Chief Executive Officer Alexandre de Juniac attempts a turnaround from near bankruptcy, Bloomberg News reported. De Juniac, who became CEO in July, is coupling luxury perks such as gourmet meals with a push to trim spending that will erase almost 10,000 jobs from 2011 into 2015. With fliers ready to spend more, investing in the customer experience goes hand in hand with savings, he said.

French unemployment was at a record high in January, adding to the woes of François Hollande, the president, in the run-up to municipal elections next month, the Financial Times reported. The number of jobseekers increased 0.3 per cent compared with December and swelled the ranks of the unemployed in the eurozone’s second-largest economy by 8,900 people. The latest figure, published on Wednesday by the labour ministry, brings the total number of unemployed to a record 3.32m – about 11 per cent of the workforce.

France and Germany have pledged to reach a deal on a European financial transaction tax by the end of May in a bid to give some impetus to efforts to find accord on the issue, the Financial Times reported. But the two governments have yet to bridge divisions on how the so-called “Robin Hood” levy would be applied in the 11 EU states that have signed up to implement the tax. François Hollande, the French president, said after a joint Franco-German government meeting in Paris that trying to find the perfect formula for an FTT would only help those who wanted to neutralise it.