Half of Europe’s small firms fear for their survival

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    LONDON- Over half the small and mediumsized companies which together provide jobs for two-thirds of European workers fear for their survival in the coming 12 months, according to a survey released by management consultancy McKinsey on Thursday.

    The survey was conducted in August, before the current acceleration in new coronavirus cases across Europe that is forcing governments to impose new restrictions on activity and prompting speculation of fresh national lockdowns.

    The finding comes as warnings multiply of an impending wave of business insolvencies and as the International Monetary Fund and others urge the region’s governments to double down on state support to help companies weather the coronavirus pandemic.

    The McKinsey survey of more than 2,200 companies in five countries – France, Germany, Italy, Spain and Britain – found that 55 percent expected to shut down by September next year if their revenues remained at current levels.

    At the current trajectory, one in 10 small and medium-sized companies were expected to file bankruptcy within six months.

    “This is a substantial burden on the financial sector,” report co-author Zdravko Mladenov said of just one of the knock-on impacts of such a development, which would also send jobless totals surging and stymie wider investment in the economy.

    Economists polled by Reuters last month forecast that the euro area economy would grow by just 5.5 percent next year after a fall of around 8 percent this year but warned that even that patchy recovery was vulnerable to a further spread of the virus.