Faced with the coronavirus pandemic, European countries began to take measures appropriate to the usual financial crisis. However, multi-billion dollar support programs only delayed the collapse and devastated the treasury.
This was reported by the Bloomberg agency.
For several months, entrepreneurs in European countries survived due to state support. This allowed them to exist in the absence of economic activity, without resorting to the dismissal of employees. Governments are now lifting quarantine restrictions. Despite this, the level of demand is much lower than the pre-crisis level, the economy is restarting too slowly, but the state support programs are coming to an end.
Thousands of entrepreneurs and hundreds of thousands of employees are on the brink of an “economic chasm”, Bloomberg writes. Dozens of government programs across Europe have helped small businesses survive in tight quarantine, but now the company could collapse.
The authorities of the EU countries are aware of the problem. Many are cutting financial aid programs instead of closing them. Others, on the contrary, are trying to expand support. For example, France is planning a new job protection program for up to 2 years. The situation is complicated by the fact that the pandemic devastated state budgets, and it is still difficult to calculate the further development of events.
It is only obvious that economic activity will not recover in the near future to the pre-crisis level, countries are waiting for double-digit indicators of production decline. Moreover, there is a threat of the second wave of coronavirus. In such conditions, small enterprises with very modest finances will not last long without state support. Their closure will entail a new round of unemployment and a drop in demand – not the best news for an already destroyed economy.American general offers Putin a scenario of invasion of Ukraine