Effective measures through structural cooperation

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Ronny Lannoo
The Belgian union of self-employed entrepreneurs, SMEs and professionals

Many of Belgium's SMEs also falling victim to coronavirus

Belgium's self-employed, professionals and SMEs have been in lockdown since 13 March. Apart from a few businesses that are essential for the public, such as food shops and supermarkets, all businesses had to completely shut down.

Since 4 May, all manufacturing companies have been allowed to operate once more provided that they comply with strict prevention measures. On 11 May, all shops were allowed to reopen. A decision will not be made about the hospitality and events industries until 8 June at the earliest. All events have been cancelled until the end of August.

88% drop in revenue

In the first week of the lockdown alone, our Belgian SME organisation received well over 30 000 phone calls and emails from affected business owners, many in complete panic, some in tears. And no wonder – their income would be reduced to nothing for mfore than two months.

Our organisation's SME business-outlook barometer, based on a survey of a representative sample of 900 SMEs, fell sharply in March by no less than 37.2 index points to reach its lowest level since 1987. The revenue figures also speak volumes – hospitality: down 89%; retail: down 80%; events industry: down 85%; furniture industry: down 66%. These are just a few examples. Moreover, it is apparent that businesses are having to contend with liquidity problems in particular, and a huge number of planned investments have been postponed.

Public measures

The federal and regional governments took a number of measures to at least stem the feared economic and social bloodbath to some extent. Belgium's social security system gives businesses the option of making their employees technically or temporarily unemployed if they are in difficulty. In this situation, employees receive 70% of their salary. Because of the coronavirus crisis, the government added a further allowance on top of that. More than one million workers have been able to benefit from this. At the same time, teleworking has been promoted where possible. SMEs that have been forced to close are entitled to an "inconvenience" allowance of EUR 4 000. Moreover, there is a compensation scheme for businesses whose revenue has dropped at least 60%, businesses can take advantage of government financial guarantees for loans, and "win-win" loans, which are given to SMEs by friends and family, receive additional tax benefits.

Civil society essential

This crisis once again clearly demonstrates the importance of civil society organisations and the social partners in Belgium. Structural cooperation between the relevant organisations and the authorities enabled effective measures to be taken following proper consultations. This meant that, among other things, risk analyses were drawn up and linked to a practical back-to-business roadmap so that businesses could restart their operations in a safe way for both employees and customers.

Furthermore, the importance of having a strong, affordable and effective social-security and health-insurance system for everyone is more apparent than ever.

Some members of the public, as well as a lot of politicians, have criticised the European Union for not doing enough in what is an international crisis. The reason for this passivity is simple. Until now, the Member States have considered public health to be their sole responsibility, with a limited impact at EU level. However, coronavirus knows no borders, let alone Member States. Once again, more action is needed at EU level, not less.