CORONAVIRUS STARTED BANKRUPTING SWEDISH COMPANIES

The COVID-19 pandemic has led to a dramatic change in consumer behavioral standards in previously prosperous Sweden. Suddenly, shops and restaurants, which were previously making jealous the travelers from less affluent countries, found themselves on the verge of survival.

Now, the national trading organization “Svensk Handel”, which monitors both traditional and electronic commerce, reports on the dangers of bankruptcy of a significant number of companies.

Hotel and restaurant fields were the first, but not the only ones, in the line of potential bankrupts of the country. In a situation where the state closed educational institutions, transferring all students to distance learning, Swedish consumers seem to have reduced their desires to the minimum. Closed stores, empty restaurants and a 70% decrease in sales in department stores — all this forces us to make disappointing forecasts about the state of the consumer market.

One of the first bankrupts in Sweden was the “Joy” clothing chain.

The company announced its bankruptcy as expected; it had experienced the liquidity problems before. The pandemic made clear the problems that merchants had preferred to hide previously.

According to the head of “Svensk Handel”, many Swedish entrepreneurs will survive no more than a couple of days before the alleged bankruptcy. At the same time, Karin Johansson noted that the situation is getting worse every day.

Some time ago, the Central Bank of Sweden decided to allocate more than $ 50 billion to support companies that are on the verge of bankruptcy due to a pandemic. At that time, 687 cases of infection and one death were confirmed in the country. What will the country's financial regulator do in the current situation, when the number of deaths from coronavirus has increased by 8 times, and the total number of the confirmed infections has reached 1167 cases?

Chairman of the Central Bank, Stefan Ingves, said earlier that the allocated money will go to lend those companies that are experiencing liquidity difficulties in the current situation. In other words, the possibility of obtaining loans through commercial banks for small and medium-sized businesses is becoming a kind of insurance. However, to what extent can such measures ensure the possibility of a subsequent repayment of borrowed funds? The experts do not exclude that the financial regulator will be forced to take additional measures to save Scandinavian companies from further bankruptcy.