The damage caused by the corona crisis is forcing hundreds of businesses in Europe’s five largest economies to prepare to close, leading to massive layoffs in the coming months.
This is evidenced by the results of a study by McKinsey & Co, which was conducted among more than 2.2 thousand small and medium-sized enterprises in European countries.
The poll showed that more than half of companies will file for bankruptcy in the next 12 months if their revenues do not increase. One in five companies in Italy and France plans to file for bankruptcy within six months.
According to analysts, these enterprises are of key importance for the region. They account for over two-thirds of the workforce. Thus, their closure will entail a sharp jump in unemployment and non-payment of numerous loans.
The study found that 70% of companies experienced declining earnings. This level was even higher in Italy and Spain, where the spread of the coronavirus and the imposition of quarantines caused serious damage.