NEARLY A FIFTH of Finnish employers are worried about going belly up due to the coronavirus pandemic, finds a survey by the Confederation of Finnish Industries (EK).
“The economic emergency of employers has exacerbated rapidly. Temporary lay-offs are increasing sharply, but the threshold for lay-offs remains high even in a time of crisis,” stated Jyri Häkämies, the director general at EK.
“The unfortunate conclusion drawn from the business survey is that we may be faced with a worse wave of bankruptcies and mass unemployment than during the recession of the 1990s,” he added.
Employment impact of Covid-19 in Finland:
EK interviewed a total of 1,873 business owners and executives for what was its second business survey during the outbreak. The responses were collected roughly two weeks after the first edition of the survey, between 30 and 31 March.
The survey provides evidence of a growing concern among employers about the ramifications of the outbreak, with the share of respondents viewing that the outbreak hinders their position fairly or very much rising from 40 to 63 per cent. The share of respondents who viewed that their operations will be hindered very much more than doubled from 17 to 42 per cent.
The service sector has been particularly hit, while the construction sector has been left relatively unscathed.
Lay-offs had already been carried out by five per cent and temporary lay-offs by 37 per cent of the respondents. Nearly a quarter (24%) of respondents also estimated that they will have to resort to temporary lay-offs and 12 per cent to lay-offs in the coming weeks.
The Unemployment Fund (YTK) has already warned that the payments of unemployment benefits could be delayed if the temporary lay-offs affect tens or hundreds of thousands of employees simultaneously this spring.
“The volume will cause an unprecedented challenge to the unemployment security system. Some of the payments will all but surely be delayed,” Sanna Alamäki, the CEO of YTK, told STT.
The Ministry of Economic Affairs and Employment has revealed that almost 6,000 employees have already been laid off and over 17,000 temporarily laid off due to the pandemic. More than 320,000 employees also fall within the scope of consultative negotiations initiated by employers to cope with the exceptional situation.
Almost a fifth (18%) of respondents viewed they are at risk of bankruptcy due to the crisis.
EK on Wednesday highlighted in its summary of the results that if the risk was realised fully, the number of bankruptcies would be higher than during the recession of the 1990s.
Concerns about protective equipment, financial support
About a half of the surveyed businesses reported that they need gloves, respiratory masks and other protective equipment in their everyday operations. The availability of such equipment was a concern to 65 per cent of the companies – not only in the health care sector, but also in the food, retail and real estate management sectors.
More than a half of respondents gauged that their situation has improved due to the measures taken by the government, whereas over a fifth stated that the measures have had no impact on their situation. Microbusinesses, in particular, were critical of the measures adopted to help companies to survive the crisis.
The respondents also stressed that relaxing the terms of debt repayment will not be enough to withstand the financial blow of the crisis but that direct subsidies will also be needed.
The Ministry of Economic Affairs and Employment on Tuesday announced the self-employed will shortly be able to apply for subsidies of 2,000 euros to cover their operating costs during the crisis from the municipality in which they are located.
Business Finland and ELY Centres, meanwhile, are to dispense roughly one billion euros in direct subsidies to businesses, the former to to companies with 6–250 employees and the latter to companies with 1–5 employees.
Aleksi Teivainen – HT