Corporate bankruptcies in the euro zone have been fewer than feared in April, top euro zone officials said on Friday, noting the euro zone would now shift to more targeted support for firms, but keep policy supportive overall to protect growth.
In April, euro zone ministers were preparing to improve and make more similar insolvency laws across the 19-nation bloc, to better prepare for a wave of bankruptcies expected when companies are weaned off government emergency pandemic support.
“Expectations in relation to the difficulties with corporate solvencies have changed,” the chairman of euro zone finance ministers Paschal Donohoe told a news conference after a meeting of ministers in the town of Brdo in Slovenia.
“But even though we have avoided difficulties now, we are not complacent about the future. Yes, we will have a more targeted approach, but generally we will continue to have a supportive stance,” he said.
“We do acknowledge there can be challenges and difficulties ahead. But some of the great fears we had have been avoided,” he told a news conference after the talks.
European Economic Commissioner Paolo Gentiloni, also present, said the better than expected outcome was mainly a result of the European Central Bank’s pandemic bond purchasing plan, the suspension of EU borrowing limits for governments and the suspension of EU rules prohibiting state support to firms.
Source: Reuters (Reporting by Jan Strupczewski and Michael Nienaber)