BRUSSELS (Pakistan Point News / Sputnik - 24th March, 2020) The daily life of Europeans has changed dramatically with strictly limited travel, banned gatherings, and widespread teleworking, but these tough measures, annoying for citizens, could rapidly turn into a catastrophe for European enterprises and the economy in general.
The majority of European countries are further strengthening efforts to fight the coronavirus pandemic. Containment measures are valid until April 5 at least.
According to a Canadian philosopher living in and teaching in Paris, Mathieu Bock-Cote, European states might have been a bit slow to provide a timely reaction to the outbreak, as they sought to "defend the utopia of globalization" until the very last.
"Multiculturalism has delayed the closing of borders in most European countries and Canada. There was something mind-boggling about the Canadian prime minister, Justin Trudeau, insisting on keeping the borders open in the context of this health crisis. On Monday, March 16, Canada finally closed its borders. At least partially. Very partially. People were foolishly told in Canada and Europe that the 'virus knows no borders.' Surprise! Carriers of the virus have passports. Border control is not about xenophobia, but about security and public health," Mathieu Bock-Cote says.
According to the philosopher, European leaders' commitment to globalism only worsened the situation with the COVID-19 pandemic, although some of them realized that the return to strict border control was essential to protect people.
"The European Union has also locked itself in its globalist certainties for much too long, worsening the epidemic. Its leaders seemed to live in a parallel world. They now partially leave their mental prisons with regret. European leaders such as [French President Emmanuel] Macron or [European Commission President] Ursula von der Leyen scoffed at and blamed [US President] Donald Trump when he closed the American skies to European travelers. Europe now does exactly the same. Several national governments in Europe have decided to regain control of their sovereignty. They do not seek to defend the utopia of globalization. For them, borders do not suffocate people, but protect them," the expert said.
The European governments that took the toughest measures, such as Italy, France, Spain and Belgium, did not ban employees from working in their companies. They simply recommended to stay home and asked people to do teleworking where possible.
However, absenteeism is very high � 16 percent on average � that is much higher than in normal times when it stands at 7-8 percent. People are preferring to claim that they are sick at home rather than work. It is true for bus and train drivers, teachers and industrial workers among others.
Trade exchanges are slowing down, and even markets are closed. Only food shops are open, although access to them is often restricted to a certain number of people at the same time.
"The offices of the Confederation are under siege: our member companies - large and small - have myriads of questions about the application of the confinement imposed in Belgium one day after France, three days after Spain and a week after Italy ... We estimate that the cost will be very high for the economy: some 2.5 billion euro [$2.7 billion] for our small country, which is very much exposed to the international economic relations," Pieter Timmermans, the secretary-general of the Confederation of Belgian Enterprises, told Sputnik.
According to Timmermans, business, which imports components from China, is still in trouble amid the pandemic, even despite China recovering from the outbreak.
"Many companies bring in components or raw materials from China and find themselves at a standstill because deliveries have not yet resumed, even if China is slowly recovering. It is good that the government received full powers for a short time. Tax correction measures, social security contributions, deferred payment of VAT, etc. are needed. We have no precedent that tells us how to react," he states.
Timmermans notes that the crisis caused by the spread of COVID-19 severely hits production by disrupting supply chains.
"The partial lockdown ordered by the government is difficult for production sites. And if you only look at food supply, we must be very careful not to interrupt the production of industrial bread, the milk chain, for example, or transport to supply food supermarkets," the expert continues.
Olivier Willocx, the director-general of the Brussels Chamber of Commerce, states that large companies are also suffering significant losses amid the situation with coronavirus.
"I do not think that big companies are immune because of their reserves or borrowing capacity. Large hotel groups, for example, have organized themselves into a franchise network. They separated their assets to improve their balance sheet but now find themselves caught by the throat much faster. I am not sure that Carlsson Wagons-Lits or British Airways will be able to get by. The Italian government has already announced the nationalization of Alitalia. Will banks hold on?" he explains.
Willocx points out that a state cannot single-handedly resolve all issues related to coronavirus pandemic's impact.
"The state is virtuality, not a reality. When I hear President Macron - who wanted less state and now finds himself hyper-statist - saying that the French state will block 300 billion euro ... It is a transfer of income from one person to the other. We are daydreaming if we believe that the state can fix everything. All of this will be financed by debt. Do not dream," he says.
At the same time, the expert added that small and medium companies would not be able to escape difficulties, saying that many of them could even go bankrupt.
"At the micro-economic level, here in Brussels, SMEs, especially in the catering sector, obviously, suffer a lot. There will be thousands of bankruptcies, which will clean up the market. Fortunately for restaurants and hotels, their staff can be temporarily laid off, switching to 'partial unemployment,'" he underlines.
Sputnik also contacted a company producing secure plastic separations for counters and cash-desks with interphones, Loisir Equipment. Its managing director, Pierre Hussin, said that his business was almost in a standstill over the disruption of deliveries from China's Hubei province, as it was not so easy to find a supplier in Europe.
"I have a large number of orders, many companies and shops want to protect their employees from contacts with customers, but my stocks of materials are enough for three weeks. A producer of plastic panels is in Hubei province, China, and has not made deliveries since the beginning of the crisis in Wuhan. I am desperately trying to find a producer in Europe, but it will take some time since we need to produce moulds first. In the present circumstances, I can hold it for a month, no more," he says.
German carmaker Audi, which produces its E-Tron electric model in Forest, Belgium, announced shutdown and laying off of 145 part-time workers on February 21.
"Due to lack of supply from China, not linked directly to the coronavirus crisis, Audi Forest production will be down by some 5,000-6,000 units over the first quarter of 2020. We have some 300 suppliers, but, of course, an assembly line needs all parts to be available to assemble cars. We do not expect our sales to be affected. There is a large stock of cars already produced and stocked on the old Caterpillar site in Gosselies. As problems are solved in China, the assembly line has started again and our competitors would not be advantaged long enough to create problems for us," the company's communications director, Peter D'Hoore, told Sputnik.
