Maybe this won’t come as too much of a surprise, but when European small and medium-sized enterprise leaders were asked to rate senior politicians, Angela Merkel came out on top.
In a survey conducted by lending platform, Capitalbox, 2000 SME chiefs were asked to name the politician who had provided the most effective support during the pandemic. Sixty three percent named Chancellor Merkel, followed by Emmanuel Macron of France taking second place with a 55 percent score.
Now to a certain extent the survey represents something of a parlor game. An entrepreneur in Spain may not be totally up to speed with business support packages in Germany or France and, therefore, the rating of foreign political leadership probably has as much to do with the international profile of the presidents, prime ministers, and chancellors in question. Thus, powerful and relatively popular figures such as Merkel and Macron score well.
But more importantly, the survey also throws a spotlight on the fears and concerns of small business leaders as the pandemic enters a new phase. A vaccine is on the horizon – and is already being deployed here in the U.K. – but even in a best-case scenario, most countries face further restrictions on social and business activity until the spring. A lot of companies could go to the wall before then – and that situation will get worse if national governments don’t get their support packages right.
As Scott Donnelly, CEO of Capitalbox points out: “Many small businesses don’t have deep balance sheets.” Further restrictions represent a continuing drain on resources.
The Second Phase
In that respect, the survey does reflect an unease about the way the crisis has been handled through the second phase. For instance, more than half of respondents – 55 percent, to be precise – felt businesses were not given enough notice when new lockdown restrictions were imposed in the Autumn and early winter. This perception was particularly acute in France and Spain where 60 and 63 percent of respondents felt they were not sufficiently forewarned.
It’s a finding that speaks to the frustration of businesses across the continent, many of which endured lockdowns in the spring and summer in the hope that normality would return. As things stand, new measures might be imposed at any time in the coming months, making planning difficult to impossible.
The Big Question
And there is a lively debate over whether restrictions should be imposed at all. A majority of respondents (51 percent) say they have introduced sufficient procedures and protections to keep staff and customers safe. Meanwhile, 57 percent say there is no need for restrictions at all.
The problem is, of course, that with infection figures as high they are, European governments are unlikely to relax too far, and in the U.K. where I’m based, support among the general public for distancing measures remains strong.
So what is to be done? The message of the survey is that more support is needed. Across the continent 37 percent want help from government to improve Covid security measures and similar percentages would welcome extended tax breaks and more business loan options.
That raises another question, namely is this a good time for businesses to borrow. A loan may get a company through a difficult patch but if economic disruption continues, then the lump sum that provided salvation could become a burden in the months and years to follow.
Scott Donnelly says businesses have been prudent. “What we’ve seen is that companies have been responsible,” he says, Not only has demand for loans fallen but in some cases, businesses have made it a priority to clear debt. “A lot of our pre-Covid loans were quickly paid off in full,” he says.
Perhaps that just emphasizes the point that businesses are doing their best to hedge against uncertainty – sometimes by paying off loans early, in other cases by laying off workers or taking advantage of state furlough schemes. By and large, SMEs have welcomed government support measures. In Britain, Chancellor Rishi Sunak’s support plans attracted a 66 percent popularity rating. But in the final few months of the crisis, the popularity of leaders could fade fast if the results of their decisions are seen as costing millions of lost jobs. And that’s before you factor in Brexit.