Concerned a possible climbing in the trade war. European companies must face a new cycle of payment delays.
A uncertainty has reign to economy global over the last few years. Come to COVID-19, came (more) wars, came the tariffs imposed by the White House.
“Uncertainty” is a word that does not appeal to companies-who are seeing a “Perfect Storm”, at least among European companies.
The description is made by, which cites intrum, Economy in Focus #14: BRACING FOR IMPACT – Europe in a New Trade
The worrying trilogy comes down to: rates, late payment and bankruptcy risk. This is because there are global commercial tensions, disturbed supply chains and the return of protectionist policies.
In Europe, the four countries most exposed to the new commercial panorama will be Germany, Italy, United Kingdom and Ireland. The sectors Automobile, Pharmacist e manufacturer They are the most vulnerable to new restrictions, especially imposed by Donald Trump.
The report presents two possible scenarios for the European economy.
The first scenario, the base scenario, is a gradual bass of tensions, limited retaliation and rates at moan levels. Follows a Moderate economic recovery.
The second, more negative scenario will have a climb to a large -scale trade war, higher rates, Strong recession, increased unemployment and growth in breach.
The first, more optimistic scenario is not very optimistic: because, even then, European companies should not have significant short -term improvements.
But, returning to uncertainty, this year is very dependent on political decisions in Washington and from reaction of the main world actors.
A hypothesis on the table is the increased delays in payments and increased bankruptcyespecially in small and medium enterprises – which are already more vulnerable from the pandemic. Companies liquidity will be under pressure, banks will be able to restrict credit.
“Strong economic recession severely reduces cash flows from families and companies, causing a significant increase in delays in payments, defaults and bankruptcies,” says the.
