If the measures to support companies suddenly disappear during the corona pandemic, some companies will go bankrupt or put employees on the street from the autumn. The Federation of Belgian Enterprises (VBO) warns against this. The employers’ organization advocates “a gradual phasing out” of the support measures. “If you work with a hatchet and suddenly stop, you will get parts of the economy into trouble,” it sounds.
–
According to the FEB, “optimism is justified” by the current economic recovery from the corona crisis. But so it warns, “there is no reason for euphoria”. The employers’ organization sees several things that can throw a spanner in the works. Chief economist Edward Roosens points out, among other things, the situation on the labor market – with 127,000 temporarily unemployed at the end of May – and the financial situation of companies. According to the FEB, about a quarter of companies that were healthy before the crisis are still experiencing major financial difficulties.
–
It is therefore important that the support measures for companies are treated with care, says the FEB. In addition to temporary unemployment, this includes payment deferrals for loans and taxes. Until June, there was also a moratorium on bankruptcies.
–
“Part of the economy has really been under a cloche in recent months,” Roosens said. When the measures suddenly disappear in the coming months, there is a threat of restructuring from the autumn at companies that currently still have a lot of staff on temporary unemployment. This leads to higher unemployment. He therefore fears “a wave of bankruptcy” among companies that overestimate the recovery in demand.
–
“Not cheeky”
Managing Director Pieter Timmermans emphasizes that the FEB is not in favor of perpetuating the support measures. “We can’t stay on the drip,” he says. “But don’t be bold when stopping the measures. Ensure a progressive phase-out between now and the end of the year.”
–
–
Another aspect that could dampen the recovery, according to the FEB, is the impact of higher raw material prices on inflation and, consequently, on the competitiveness of our companies.
–
Weak e-commerce will also affect our country: the corona pandemic has given online shopping a lasting boost, but the major e-commerce platforms are located outside our national borders. “That costs us between 0.2 and 0.4 percent economic growth every year, because the added value in our trade sector comes to a standstill, while in the Netherlands and Germany it grows by 10 to 15 percent,” says Roosens.
–
“Transformation Plan”
According to Timmermans, there should no longer be a question of “a recovery plan”. “The recovery is underway,” he emphasizes. The Belgian economy should return to the level of the end of 2019 in the first quarter of 2022, at which time economic activity is still 3 to 4 percent lower than normal, according to the FEB.
–
“We need a transformation plan,” says the CEO of the employers’ organization. According to him, investments in infrastructure, a reform of the labor market and the relaxation of “too complex and restrictive rules on working hours” to promote e-commerce should be central.
–
Read also
Almost 3,000 bankruptcies in 2021: you need to know this if your company goes bankrupt
–
Free unlimited access to Showbytes? Which can!
Log in or create an account and don’t miss out on any of the stars.
–
–
