The European Systemic Risk Board (ESRB) has delivered a damning assessment of the economic crisis in Europe as much of the continent continues to battle a third wave of coronavirus infections. The finance body, chaired by European Central Bank president Christine Lagarde, warned firms may struggle to stay afloat as they continue to rely on emergency life-support funding from the state.
Thousands of businesses across the eurozone, including in France and Germany, remain closed due to strict lockdown rules.
The dire outlook from the ESRB comes despite firms across the bloc claiming grants, tax breaks and loans to the tune of £1.3trillion.
The latest report by the ESRB said: “In a worst-case scenario, the postponed insolvencies would suddenly materialise and trigger a recessionary dynamic, potentially causing further insolvencies.
“The current low rate of insolvencies would then be similar to the sea retreating before a tsunami.”