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Breaking point in Europe’s small-business

Breaking point in Europe’s small-business

woman placing sticky notes on wall
The economic damage wrought by the coronavirus is clear in countless stories across Europe, from business owners furiously fighting to keep their firms afloat to those who see no hope. In France, where more than half of small firms fear bankruptcy, the crisis led to a public showdown on live television between entrepreneurs and the country’s finance minister.
Even with massive government financial support, countries face the prospect of countless businesses going under, destroying livelihoods and jobs, as well as weakening a key part of the economy. Europe’s 25-million small and medium-sized enterprises (SMEs) — officially defined as having fewer than 250 staff — employ more than 90-million people.
Often with low margins and few reserves, small businesses are more vulnerable than bigger groups. SMEunited, an employers’ association representing SMEs at a European level, showed in a recent survey that about 90% report being hit by the pandemic, with an EU-wide average 50% loss in turnover.
Country-level data is similarly grim: France’s small business federation CPME says 55% of small firms are concerned about bankruptcy, and a group representing Irish SMEs says close to 30% won’t survive if the situation doesn’t improve within the next two months.

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