COVID-19
The moment a crisis occurs, everyone wants to know what the impact is as soon as possible, and we come up with all kinds of scenarios. More than 1.5 years after the outbreak of the COVID-19 crisis in the Netherlands, we can say that most scenarios did not materialise. A boom in bankruptcies was expected and the negative impact on the economy would be huge. Currently, the opposite seems to be true. The economy is running at full speed, there is a dire shortage of certain commodities and personnel. Major exceptions to this are, of course, the travel and events sector.
Ending state aid
However, this does not mean we need to be completely unconcerned. The Dutch government has pumped huge amounts of money into the economy to help affected businesses. The number of bankruptcies last year and so far this year shows that it has succeeded so far. However, next October 1, this support will end and companies will have to stand on their own feet again. They will have to repay part of the aid they have received. This will eventually lead to more bankruptcies because some companies will no longer be able to repay these debts and/or financiers will no longer want to finance them. But when and to what extent this will happen cannot be predicted.
Brexit
Brexit also caused a stir. Here too, everyone tried to make predictions about the impact on Dutch and European companies. The figures now show that British companies in particular have been hit hardest and especially SMEs. They do not comply with the new rules from the trade agreement and therefore lose many EU customers. More than 400 financial institutions have already left the UK for other countries within the EU. And this number is likely to grow further. This involves €1.15 trillion in assets, as well as 7,500 jobs. This is just one example, as many multinationals also now prefer to set up offices in the EU rather than the UK.
The European Parliament has set up a €5bn fund for EU businesses affected by Brexit. After Ireland, the Netherlands will be able to make the most use of this fund (over €800m). However, this does not mean that Dutch companies will not be affected by the Brexit and negatively impacted by it. In general, many Dutch companies are resilient and the Dutch trading spirit makes us think of alternatives. Again, what the exact impact will be, we will only know in a few years' time.
Shortage of raw materials, semi-finished products and personnel
The covid pandemic has also caused logistic flows around the world to be disrupted. Raw materials such as wood, metal but also fuels are scarce. This has made products unobtainable on the one hand, but has also caused prices to rise sharply. The acute shortage of chips, which are much needed for various end products, is causing huge problems. So bad that even production lines have been shut down. What we also see is that the cost of container transport has increased tenfold. But what we did not expect at the beginning of the corona crisis is the huge shortage of personnel that has emerged. Good for employment, but without qualified workers not good for the production process.
Long-term strategy
An important lesson we can already draw is that within the Netherlands and/or the EU, we need to become less dependent on other countries such as China, the US and Russia. We have now seen that if one link fails, the whole chain is in trouble. This is not something we can solve in the short term, but it is certainly of strategic importance in the medium term. Perhaps we can learn something here from China, which has been pursuing a long-term strategy with a clear vision for years.
Conclusion
All in all, we still face quite a few challenges and uncertainties in the coming years. This presents threats, but certainly also opportunities. With these uncertainties in mind, it is important to assess risks and manage them as much as possible. This certainly also applies to debtor risks.
