The death of companies during the coming winter will be very limited in the Balearics. The statement comes from both employers and unions, which together with Professor of Applied Economics and director of the Impulsa Foundation, Antoni Riera, point out three key factors to now discard the pessimistic forecasts that were launched at the end of last year on the damage that the pandemic would generate in business activity.
The first is that the tourist season, despite its weakness and irregularity, is generating sufficient income for businesses on the islands to recover “oxygen” and improve their accounts, helped by increased consumption by residents. The other two have to do with the actions carried out by the Administration, such as the aid granted, especially the 855 million in state aid, and the moratorium on insolvency proceedings approved by the central government.
One of the car parks in the Ses Salines Natural Park on Formentera, full of motorbikes. César Navarro.
It is no secret that it will be inevitable that some temporary labor force adjustment plans (ERTE) will end up becoming definitive layoffs or the closure of some businesses, but it is predicted that these situations will be limited. The same will happen with the insolvency proceedings that may be declared as from January.
The presidents of the employers’ associations CAEB and Pimem, Carmen Planas and Jordi Mora, respectively, agree on this point with the general secretaries of UGT and CCOO on the islands, Lorenzo Navarro and José Luis García. All claim that the tourist season, despite being clearly below that of 2019 (a cut in activity of 30% to 40% on average), is allowing companies to stay afloat. And Mora also maintains that the positive trend for businesses will continue due to the progress made in reducing contagions. For this reason, García is convinced that “the companies that have made it to June will probably be able to hold out until the summer of 2022”.
Collect and pay
But there is one aspect highlighted by all: the injection of liquidity from the aid approved by the Administration, will be a key factor, in the liquidation of the debt maintained with suppliers, as the circulation of money will have a ‘domino effect’.
The president of the trade association Pimeco, Antoni Fuster, highlights the value of this last element, and stresses that there are cases in which some SMEs will be able to receive state aid amounting to 250,000 euros, thus boosting their survival.
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