European workers fear for their continuity as half of small scale and medium sized establishments which provide jobs, for the coming 12 months, according to a survey released by Mckinsey which is a management consultancy.
Governments in Europe are forced to impose new restrictions on activity and reckoning of fresh national lockdowns.
As warnings multiply of an upcoming wave of business liquidation, regional governments are advised by International Monetary Fund and others to rely on state support to help the companies during coronovirus pandemic.
One in Ten, small and medium-scale companies is expected to file bankruptcy within six months.
Zdravko Mladenov the co-author of McKinsey Company’s survey stated “This is a substantial Burden on the financial sector”.
Economists polled by Reuters last month predict that the economy in Euro would grow by just 5.5 percent next year after a fall of eight percent; even this recovery is vulnerable as the pandemic continues aggressively.
Over Ninety million people in Europe are employed by small and medium sized enterprises; many among them will be at risk due to cash flow crises. In spain, for instance businesses which have slumped from February employ fewer than five workers, that is out of Eighty three percent out of Eighty five thousand businesses.
Policymakers need to do whatever it takes to contain the pandemic and its economic damage, and not withdraw support prematurely to avoid repeating the mistake of the global financial crisis,” Stated by IMF in its blog.
“For companies, policies now need to go beyond liquidity support and ensure that insolvent but viable firms can remain in business,” it added.
