The Impact of the COVID-19 Crisis on European Businesses


Survey Results on Turnover Losses and Firm Survival for Germany, Spain and Austria

The impact of the COVID-19 crisis is affecting businesses across Europe. On the basis of survey results on turnover losses and insolvency risks, WIFO economist Werner Hölzl, part of an international research team, examined firms' expectations in Germany, Spain and Austria.

"If the measures to contain the COVID-19 pandemic are not eased or effectively combated by support measures, a massive wave of insolvencies is threatening in all three countries, according to the authors of the study", the study authors wrote in an EconPol Policy Brief.

In April 2020, two questions on the impact of the COVID-19 crisis were included in the European Commission's joint harmonised EU programme of economic surveys. This policy brief presents the results for Germany, Austria and Spain. The results illustrate the sweeping effect of the crisis on the firms' turnover and provide alarming figures on a potential bankruptcy wave caused by the current crisis and confinement measures.

The overwhelming majority of firms expect negative effects of the COVID-19 crisis on annual turnover (to the tune of 20 percent in Germany and Austria and 25 to 44 percent in Spain). The sub-sectors hardest hit are manufacturing of consumer durables and investment goods, services in the field of tourism and gastronomy and retailers selling neither food nor beverages.

"If confinement measures aren't lifted or countered by appropriate policy support, the prevailing confinement measures will cause insolvencies or bankruptcies of 30 to 50 percent of all businesses by the end of July, rising to 50 to 80 percent by October", says the team of authors consisting of Raquel García (SIMPLE LÓGICA, Madrid), Christian Gayer (European Commission, DG ECFIN), Werner Hölzl (WIFO – Austrian Institute of Economic Research, Vienna), Sergio Payo (Ministerio de Industria, Comercio y Turismo), Andreas Reuter (European Commission, DG ECFIN) and Klaus Wohlrabe (EconPol Europe, ifo Institute, CESifo).

Please find the complete policy brief here.

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Werner Hölzl

Research groups: Industrial Economics, Innovation and International Competition
© Bethany Legg/Unsplash
© Bethany Legg/Unsplash