The government measure includes carrying out its own project to modify the bankruptcy law, with the aim of promoting “a bailout” to SMEs
The economic crisis caused by the stoppage of the activity of all industries, due to the coronavirus, put the government on alert.
The big question is what will happen when the quarantine is lifted and companies resume their activity, especially small and medium-sized companies, that is, SMEs.
That is why, faced with the danger of a significant number of competition requests that could be submitted as soon as the quarantine is lifted, the Government is analyzing the possibility of carrying out its own project to modify the bankruptcy law, with the aim of promoting “a bailout” to many SMEs.
The economic cabinet is analyzing this issue, with the idea of preparing measures that should be framed in a bill that allows companies and sectors severely hit by the crisis “a little air” and being able to keep the firm and the jobs.
The government’s initiative is not the only one managed to save SMEs, according to Perfil.
This week opposition lawmakers also introduced a bill on some changes to the bankruptcy law.
In the Government they assure that the problem of that project is that it raises certain modifications for 2020, and the Executive’s objective would be a longer extension of time.
The Government fears for the bankruptcy petition of many SMEs.
So far, the government has granted the postponement of debts and the suspension of deadlines, but the central point is that the quarantine does not allow the normal functioning of Justice, with which, in the Government they admit that there could be in the coming months a “bankruptcy filing waterfall”.
The objective of this initiative, as they comment in the Executive, is to give a more transcendent character to the previous agreements between companies and creditors. “There are tools that are being analyzed in this regard, in order to promote a solution before the preventive route,” they highlighted.
More rescue plans for SMEs
While debating in Economy what kind of measures to take, a group of national deputies for Together for Change, led by the radical Ximena García, propose, through a temporary modification of the Bankruptcy and Bankruptcy Law, to create exceptional and transitory tools that promote a way out of the crisis for SMEs.
The project is part of the economic crisis that the country is experiencing due to the Covid-19 pandemic, which has caused a paralysis of the industry and a drop in business sales that has left many companies on the brink of bankruptcy.
A rescue plan for SMEs also analyzes Let’s change.
The proposed measures seek to facilitate extrajudicial preventive agreements (APE) between debtors and creditors, at the same time that they propose tools for those companies that are already going through bankruptcy processes, and whose situation has been aggravated by isolation. In this way, companies could access the benefits of the Bankruptcy and Bankruptcy Law and continue with their activities.
The measures also include the suspension of executions of consumer notes for 120 days, to help families who are going through a difficult economic situation. The proposed measures would remain in effect until December 31 next, to make bankruptcy processes more flexible in support of companies that are bankrupt or are about to be.
“Today more than ever, we must protect companies and the jobs they represent, “said the Santa Fe deputy, adding:” These are and will be the engine of our economy. ”
To maintain the jobs, the initiative under consideration would contemplate “greater flexibility” in the employer contribution system, but for a period that, in principle, would be for a year.
SMEs near the closes
Meanwhile, in the last hours, a report from the SME Observatory warns that due to the drastic effects of the quarantine, the danger of companies that can close increased from 6 to 8 percent.
According to a survey carried out by CAME, Cámara de la Medina Empresa, 51% of the firms registered in the entity did not request the line of credit at a rate of 24%, but the rest requested it, of which only 18 percent obtained it. .
“Faced with an extremely complex economic scenario for the SME sector, with an 80% drop for those companies that were unable to work or produce normally, we will insist on the need for a financial rescue of the main job generators in the country to care for the workers” , adds the entity’s report.
The issue is that, although the gradual easing of quarantine has already allowed some 77,000 SMEs to resume activity in the last month, there are still more than 600,000 workers of this segment, including micro-enterprises, which they are inactive.
Hence the need for this sector to be allowed to join the activity. It happens that, beyond the various programs promoted by the Government to help the private sector in the context of a deepening recession and which, at this point, foresees a drop in GDP above 6% by the end of the year, the SME closing risk increased from 6% last month to 8% now.
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