‘Few zombie companies due to Dutch corona support’ | NOW

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The cabinet’s corona support has kept few companies afloat that would otherwise have collapsed. This is the conclusion of two economists from credit insurer Atradius in the economists magazine ESB, writes The Financial Times. According to them, many of these so-called zombie companies have been created abroad.

Due to the outbreak of COVID-19, the cabinet has introduced an extensive package of support measures to keep companies afloat. However, there is a fear that this support will also reach companies that actually no longer have a right to exist and can only survive through government support. These are also called zombie companies.

Atradius economists John Lorié, who is also a researcher at the University of Amsterdam, and Iulian Lobica, also a PhD candidate at the VU University Amsterdam, have investigated the extent to which the support package keeps companies without a right to exist.

The researchers stated that the economic development in the Netherlands without corona support in the second quarter had resulted in a 5 percent increase in the number of bankruptcies compared to the same period last year. But in reality the increase was only 2 percent. That is 3 percentage points less, leading the researchers to conclude that three in a hundred companies have been kept afloat by the corona support.

This is very little compared to other countries. For example, the researchers say that in France, Belgium and Spain, among others, the number of bankruptcies is tens of percent lower than in other years.





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