Home » Business » AFM: Economy is in silence before the storm, the blow of the corona crisis is yet to come | NOW

AFM: Economy is in silence before the storm, the blow of the corona crisis is yet to come | NOW

The Netherlands Authority for the Financial Markets (AFM) believes that the Dutch economy will be hit by the corona crisis with permanent economic damage and long-lasting effects on the labor market. The AFM reports this in a trend report on Tuesday. The economy is still doing reasonably well, but because the support measures are coming to an end, the authority thinks this is a “calm before the storm”.

According to the AFM, the many support measures will come to an end and companies that are no longer viable will have a hard time. Yet it is difficult to predict how the crisis will develop further in the near future. The outlook for economic recovery will depend to a large extent on the further course of the pandemic.

Lower educated people in particular are likely to be at greater risk of losing their job because they are more likely to have a flexible contract. In the report, the AFM also notes that the corona crisis is exacerbating existing risks for the financial sector for some time. For example, the corona shock seems to have delayed the return to higher interest rates for a few years and has accelerated digitization.

The AFM also sees other risks that lurk. The financial watchdog warns of the possible consequences of the impending hard Brexit. Due to the difficult course of the negotiations between the European Union and the United Kingdom, it is less and less likely that the deadline for an orderly Brexit of 31 December will be met. There is still a lack of proper agreements on, for example, securities trading and financial services.

The AFM once again calls on companies at home and abroad to prepare well for a hard Brexit. According to the regulator, many large companies have already done this, but not everyone seems to have everything in order yet. With good preparation, however, unnecessary problems can be avoided. For example, many large London bond platforms have already arranged permits for a branch in the Netherlands in recent years to ensure their access to the European market.

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