Companies will do very badly: The economic crisis may worsen after the lockdown

Many factors will worsen companies' situation markedly (we look at the situation in the euro zone) , for example : The increase in their debt and the decline in their earnings; The likely weakness of consumption; The decline in productivity due to the new health rules; The persistently very difficult situation in several business sectors; The cost of the likely tightening of climate and environmental standards. This may mean that the economic crisis will worsen once the lockdown is over, due in particular to a very long-lasting rise in unemployment, and a highly ineffective monetary polic y (as companies are already over-indebted). The most appropriate economic policy response then seems to be a very significant reduction in labour costs, which would offset the rise in other costs and the fall in labour productivity while boosting job creation.