Dutch have few ‘zombie companies’ but wave of bankruptcies is around the corner – DutchNews.nl

Dutch government measures to bail out companies hit by the coronavirus crisis have not created large number of zombie companies compared to other European countries but this year will see a big increase in bankruptcies, the Financieele Dagblad said on Tuesday.

Figures from credit insurer Atradius published in economic journal ESB show that the Dutch approach to the crisis has been efficient, the FD said.

The number of companies going bust in the second quarter did not exceed 2% when 5% had been expected. That means around three in a hundred companies are not viable and were being kept alive by government funding, the researchers concluded.

The problems in other European countries are much more serious, according to Atradius calculations. In Belgium almost 80% of bailed out companies should have have gone under. The same goes for 40% of companies in France and the United States, some 30% of Spanish companies, 25% of British companies and around 20% of German firms.

The difference may be down to stricter regulations and conditions for support as well as bankruptcy regulations, the FD said.

The number of European zombie companies is still growing and Atradius expects a wave of bankruptcies to hit by the end of the year as support is slowly withdrawn.

The Dutch government wants to avoid the creation of more ailing companies which solely survive on government funds and has slimmed down its third support package accordingly.

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Dutch have few 'zombie companies' but wave of bankruptcies is around the corner - DutchNews.nl

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