The world will remember the coronavirus pandemic for a long time and feel its negative consequences even longer. The economy of such developed regions as Europe will not be able to recover from the coronavirus crisis quickly. It will take the euro area years to get back to normal.
Experts have already named this complex process as "years of pandemic pain". European countries will have to go through this tough period in their history whether they like it or not. This time will be even more difficult for Europe due to a noticeable increase in corporate debt. Currently, the euro area is facing a corporate debt binge. The local authorities have started large-scale programs to support small businesses, while central banks have cut interest rates and have increased the money supply.
European businesses are driven to bank loans and bond issues. They do not think that crisis support will gradually come to an end, but the debt will remain. Such financial risks will inevitably lead to a wave of bankruptcies and defaults in the future. This will strike a severe blow to the banking sector and the economy of the region.
Debt burdens could cripple investment and job creation for years to come. The European Commission warns that "servicing debt could be challenging particularly in sectors impacted by the pandemic in a more lasting way." Experts say that the repayment of debts piled up over the pandemic is the second biggest concern for businesses.
