Report
Patrick Artus

How to offset the increase in corporate debt in the euro zone?

The coronavirus crisis is going to lead to a sharp increase in the corporate debt ratio in the euro zone. There is therefore a risk of a protracted period of weak investment and employment after the crisis. How can this increase in debt be offset and its depressive effects averted? After the subprime crisis, the increase in corporate debt was offset by a fall in interest rates. This will not be able to be the case after the coronavirus crisis; This leaves only two ways to avert the negative consequences of the increase in corporate debt: A large-scale transformation of new debt into equity or quasi-equity; A corporate tax cut to offset the increase in debt servicing costs.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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