Recovery plan and economic sectors most affected by the Covid crisis

The European Commission (EC) has published a set of documents to present the recovery plan against the pandemic. Among them, this document identifies the needs that would have to be faced to ensure sustainable growth in the EU. The analysis is carried out through three types of categories: losses in companies as a result of the crisis, investment needs gaps (public and private) and social spending needs.

Below you can find some of the main highlights:

• Losses for European companies (listed and non-listed) resulting from lower profits in 2020 alone are likely to range between €720bn and €1.2tn
• The estimates show that between 25% and 35% of companies would experience a financing shortfall by the end of the year after exhausting working capital and liquidity buffers, respectively. 
• The sectors showing the greatest share of firms facing liquidity and working capital shortfalls are wholesale and retail trade, accommodation and food services, and transport industries. These firms will face an acute risk of bankruptcy.
• Investment gaps: the crisis has opened up new investment gaps resulting from a collapse in private investment plans and the investment needs to deliver on the green transition (€1.190bn over the next two years) and digital transformation. (€250bn over the next two years)
• Social spending estimates around additional €200bn per year to cover investment needs for affordable housing, health and long-term care, education and life-long training.