Crushed by COVID, small Spanish firms struggle to survive
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by Emmanuelle Michel
Isabel has closed her Madrid bar and sent two workers home; Miguel’s shoe shop has lost older customers: In Spain, the coronavirus has pushed small businesses to the brink of collapse.
Nearly 80 percent of Spanish companies have fewer than five employees — higher than the 70 percent average in other eurozone countries — leaving the country particularly exposed to the looming crisis, the Bank of Spain has warned.
So far, 40,000 bars, restaurants and hotels have permanently closed, with the figure seen rising to 65,000 by the end of the year — or 20 percent of the total, the country’s hostelry federation says.
Six years ago, Isabel — who is 56 and does not want to give her surname for fear of compromising her future job prospects — invested 120,000 euros ($140,000) in a stylish little bar in a trendy area of central Madrid.
But it went out of business even before the state of emergency was over, with the government imposing limits on customer numbers as a condition for reopening.
“It’s a small place, and there’s no outdoors space. I saw that the numbers just wouldn’t work. With two staff and in these conditions, I wouldn’t make enough to even pay the electricity bill,” she told AFP.
She had very little cashflow and banks refused to give her a loan, despite lines of credit backed by the government to support struggling businesses.
A widow with two teenagers to support, she is now living off her savings and the monthly 600 euro allowance that the government approved to help 1.7 million self-employed workers who have no income.
“I can’t sleep,” she admits, bracing for the struggle she now faces to find a work in a year when unemployment levels are expected to reach 20 percent.
The bar and restaurant sector is expected to lose around a million jobs, both direct and indirect, as a result of the crisis, with turnover likely to be halved this year, industry figures say.
Customers are few and far between, in both the most popular tourist areas and business districts in major Spanish cities, which have remained largely deserted because of people working from home. (AFP)