Foreign media quoted a survey published by McKinsey Consulting on the 22nd and pointed out that more than half of European small and medium-sized enterprises (SMEs currently provide jobs for two-thirds of Europeans) are worried about their survival in the next 12 months.
According to a report from Reuters in London on October 22, the accelerated development of the epidemic in Europe is forcing governments to impose new restrictions on various activities, which has triggered public speculation about the government’s new blockade measures. In addition, warnings about the imminent wave of corporate bankruptcy are also increasing. The International Monetary Fund and other institutions are urging European governments to increase support to help companies resist the covid-19 epidemic.
In a survey of more than 2,200 companies in 5 countries-France, Germany, Italy, Spain and the United Kingdom-McKinsey & Company found that if their revenues remain at current levels, then 55% of companies are expected to do so by September next year. collapse. According to current trends, one in ten small and medium-sized enterprises is expected to file for bankruptcy within six months.
As one of the authors of the survey report, Zdravko Mladnov said: “This is a huge burden for the financial industry.” Other impacts will include a surge in unemployment and hinder macroeconomic investment.
Economists interviewed by Reuters predicted last month that the euro zone economy will shrink by about 8% this year, and will grow by only 5.5% next year. They also warned that the economic recovery next year will be easily affected by the further spread of the new coronavirus.
According to the definition, a small and medium enterprise refers to an enterprise with 250 employees or less. In Europe, these companies employ more than 90 million people, and their small size makes them vulnerable to cash flow crises. For example, in Spain, 83% of the 85,000 companies that have closed down since February have fewer than 5 employees.
The report pointed out that so far, some rescue measures taken by European countries have saved thousands of troubled companies from closing down. But as these measures are gradually discontinued in some cases, the central banks of Germany and England have warned that the number of corporate bankruptcies may increase.
The International Monetary Fund said: “Policy makers must do everything they can to contain the epidemic and its economic damage, and not to withdraw supportive measures too early to avoid repeating the mistakes of the global financial crisis.”
“For companies, current policy measures need to go beyond liquidity support to ensure that insolvent but viable companies can continue to operate.” The organization mentioned measures such as creating convenience for debt restructuring.