EU firms in the post-COVID-19 environment: Investment-debt trade-offs and the optimal sequencing of policy responses. 22/06/2020
Revoltella, Debora ; Maurin, Laurent ; Pál, Rozália
Centre for Economic Policy Research, London
CEPR - London
2020
epidemic disease ; enterprise ; economic recovery
Business economics
https://voxeu.org/article/eu-firms-post-covid-19-environment
English
Bibliogr.;Statistics
"COVID-19 and the related lockdowns have taken their toll on the EU corporate sector. This column uses an accounting approach and ORBIS firm-level data to assess the medium-term strategic choices for firms. Assuming three months of lockdown and under different normalisation scenarios, cumulative net revenue losses of EU companies are estimated in the range of 13-24% of EU GDP. These losses create a difficult trade-off for firms between protecting investments and increasing their leverage. To properly accompany the recovery, policies to ease access to credit should be matched to enhanced instruments for long-term, equity-type financing."
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