According to Euler Hermes 24% of Eurozone companies (or more than 4.1 million) at risk of a cash-flow crisis next year. One in five non-financial corporates in Belgium are at risk (or 125,132 non-financial corporates).
The first wave of Covid-19 lockdowns caused a stronger-than-expected profitability shock for most European non-financial corporates in H1 2020, with French and Spanish firms hit particularly hard despite generous policy support.
Now, with the second wave of lockdowns, we expect a heavy cost for Covid-19 sensitive sectors across the Eurozone, which could see average operating losses of -15% to -20% in 2020 compared to pre-crisis levels. In the absence of prolonged fiscal policy support or an aversion to taking on more debt, this could dry up cash buffers, putting around 24% of Eurozone companies (or more than 4.1 million) at risk of a cash-flow crisis next year.