Biznes Fakty
Every fourth company in Europe may disappear from the market within two years – report
As stated in Intrum’s „European Payment Report 2025”, a quarter of businesses across Europe may vanish from the market within the next two years. The outlook for small and medium-sized enterprises (SMEs) is especially concerning, with up to 29 percent of participants indicating the risk of insolvency.
Reports indicate that following years of high inflation and strict monetary policies from central banks, European firms were looking toward 2025 with optimism, finally anticipating economic recovery. Nonetheless, given the current geopolitical climate, maintaining a positive outlook is challenging.
Risk of stagflation
There exists a substantial risk that rising trade conflicts, characterized by tariffs and reciprocal economic sanctions, may culminate in stagflation – a scenario where inflation is fueled by import costs without corresponding economic growth and increased expenditure.
„One in four companies in Europe states that if market conditions do not improve, it faces the threat of bankruptcy within the next two years. Intrum’s projections suggest this could result in the closure of nearly 10 million firms and the loss of over 40 million jobs across the continent,” it was noted.
The predictions for small and medium-sized enterprises (SMEs) are particularly dire, with a striking 29% of respondents recognizing the risk of bankruptcy, in contrast to just 11% of larger competitors.
It has been reported that the direct cause of this danger stems from delayed payments, predominantly impacting SMEs. These businesses, which operate with limited financial buffers and tighter margins, struggle to manage the prolonged effects of late payments, significantly heightening their bankruptcy risk.
Competitiveness is in question
Concerns have been raised regarding the competitiveness of the European economy. The latest predictions from the International Monetary Fund indicate that GDP growth within the European Union in 2025 is expected to be merely 1 percent, a notable reduction from last year’s forecast of 1.5 percent. This revision is attributed to slower-than-anticipated growth in the region at the close of the previous year. These projections do not yet factor in the possible effects of unexpected trade disputes that have emerged recently, which have unsettled the international economic and political framework established post-World War II and are exerting growing pressure on governments, enterprises, and consumers.
„In light of new geopolitical realities, Europe has made a swift pivot in its policy – shifting from austerity to increased expenditure, particularly in the defense sector. This shift may further diminish current GDP forecasts. While these measures are viewed as a potential catalyst for economic recovery and a path for the EU to escape industrial stagnation, the process is likely to be prolonged, and in the short term, it raises the risk of a scenario where the economy stagnates while prices rise,” it was written.
Late payments are a serious problem
Reports indicate that an increasing number of companies are facing challenges with receiving timely payments from clients. It is estimated that delays in payment affect as much as 11% of all issued invoices. One in three managers reports that these delays have returned to levels seen during the pandemic, a time marked by significant economic disruptions caused by the crisis.
In reaction to this issue, nearly 80% of respondents are adopting solutions aimed at ensuring timely payment of obligations. These initiatives include, among others, the modernization of payment interfaces (78%) and tailoring offerings to align with customer-preferred payment methods (76%). The difficulties related to maintaining financial liquidity imply that data-driven technologies, including artificial intelligence, may become crucial for survival.
