Europeans are Closing Shops, squeezed by the Economic Crisis
For two years, businesses received significant government support because of the pandemic, but now rising energy and debt service costs, along with general inflationary pressures, are putting the recovery of small and medium-sized businesses at risk, EURACTIV writes.
Business bankruptcies, especially SMEs, increased steadily in 2022 and are expected to continue in 2023 across the EU, "due to a weaker economic outlook with high inflation and energy prices, as well as monetary tightening policy and a reduction in government support," according to debt collector Atradius Collections.
Business bankruptcies have risen by 69% in France over the past year, the first time in more than 25 years, consulting firm Altares Dun & Bradstreet found earlier this month.
The risk of bankruptcy has also risen in Italy from 11.4% to 16.1%, with almost 100,000 companies at high risk, according to data from marketing research agency Cerved.
Eight hundred and thirty-one thousand people work in Italian companies at risk of bankruptcy, an increase of almost 129 thousand compared to 2021 (7.2%). About 2.1 million people work in companies considered more vulnerable, and a total of over 3 million people work in "precarious" companies.
A similar trend can be seen in Poland, where data from the Ministry of Development and Technology on business closures show that 104,300 applications to close shops have been submitted to the authorities so far this year, up 25.8% from last year. Applications for temporary suspension of activities have also increased by 39.4% in the last twelve months.
The situation is even worse in the UK, where "more than one in 10 UK businesses reported a moderate to severe risk of insolvency in August 2022",...
- Log in to post comments