The ministers of Economy and Finance of the euro zone (Eurogroup) will meet this Monday by videoconference to have a first exchange of opinions on the risk of company insolvencies due to the crisis, while they will debate the new economic perspectives presented in the past Thursday by the European Commission.
The “resistance of the business sector” has been a source of concern for the Eurogroup since the beginning of the pandemic and, although its economic impact “is not yet reflected in the number of insolvencies or an increase in non-performing loans”, European sources have warned that the debt caused can trigger a wave of bankruptcies once the stimuli are withdrawn.
“The first priority is to avoid unnecessary destruction of productive capacity during the crisis, we do not want healthy companies to go bankrupt due to containment measures, but we must also let companies that are not viable go bankrupt,” explained a senior European official in the face of to the debate of the ministers in the Eurogroup.
This point of debate comes just days after the Community Executive warned Spain about the risk of a rebound in business insolvencies with the withdrawal of aid, especially in the hotel and tourism sector, one of the most affected by the restrictions on mobility.
Sources from the Ministry of the Economy specify, however, that Brussels speaks of a “generalized” problem throughout the European Union and not of a “special concern” in the case of Spain.
In any case, the Eurogroup will hold a first exchange on this matter on Monday, before addressing it in a more in-depth way in April. The objective, according to the sources consulted, is to find a way to replace current measures with other “more selective” ones that allow the survival of companies that have suffered especially the crisis but are viable, in addition to harmonizing national insolvency procedures to address these situations.
In addition, Brussels will present its new economic forecasts, which point to a rise in GDP in the euro zone this year of 3.8%. Spain would be the country that would grow the most, with 5.6%, followed by France (5.5%) and Croatia (5.3%), the only countries that will exceed the 5% threshold. The German economy would expand by 3.2% and the Italian by 3.4%.
According to European sources, the Brussels figures give reason to be “cautiously optimistic” because they show that GDP contracted in the fourth quarter of 2020, but “not as much as feared.” “Perhaps you can say that our economies are better adapted to the circumstances,” they say.
The agenda of the telematic meeting of the Eurogroup closes with a new debate on the international role of the euro, a recurring point in recent months that is part of the Brussels strategy to reinforce the use of the common currency in international markets and win ground to the dollar as a world currency.
