Summary
The economic impact of the coronavirus crisis varies across industries and firms depending upon a number of factors, including the possibility to adapt to disruptions in supply chains, and the existence of inventories or reliance on just-in-time production processes. The European Commission is in close contact with national authorities, industry representatives and other stakeholders in order to monitor and evaluate the impact on European industries and trade.
The tourism ecosystem has been hit hard by restrictions on movement and travel imposed in the wake of coronavirus crisis. To get it back on track, on 13 May 2020, the Commission proposed a series of measures that would allow for a gradual and coordinated reopening of tourism services and facilities, as well as specific support for tourism businesses. An improved outlook for the global economy is also set to support the recovery. The economic impact of the pandemic remains uneven across Member States and the speed of the recovery is also projected to vary significantly.
At the local level, the situation changes from Country to Country, moreover the European Nations have not achieved the same results in terms of economy and development during the lockdown phases. To explore and learn more about the crisis triggered by the pandemic, we interviewed local economic operators and experts. A very interesting picture has emerged.
ROMANIA
Prof. Ana Maria Udrescu
To explore the impact of coronavirus (COVID-19) on businesses in our region, we conducted some interviews with local entrepreneurs. We spoke with Mr. Aurelian Arnăutu, Marketing manager of Uzina Mecanică, Rm. Vâlcea, company that was founded in 1981, Mr. Doru Paraschiv, General manager of Rosan Group and OK Restaurants , Mr. Ion Oncete, Manager of Kosmik Bakery business started in 2018 with a Start-up Nation application and Ms. Diana Deaconu, Manager of Prati SRL, company that processes and sells veneers, timber and logs. Several themes emerged. First, mass layoffs and closures had occurred -just a few weeks after the beginning of the crisis. Second, the risk of closure was negatively associated with the expected length of the crisis. Moreover, businesses had widely varying beliefs about the likely duration of COVID-related disruptions. Third, many small businesses are financially fragile a year after the first lockdown. In addition to its impact on public health, coronavirus disease 2019 (COVID-19) has caused a major economic shock. In this article, we explore the impact of COVID-19 on the small business landscape in Vâlcea County, Romania, focusing on the following questions:
1) In what sector do you have your business? Mr. Aurelian Arnăutu: We are a manufacturer of metallic furniture so we manage our business on manufacturing sector. Mr. Doru Paraschiv: Our business is part of the Horeca, restaurants and hotels sector and was founded in 1998. Mr. Ion Oncete: We are working in manufacturing - pastry goods. Ms. Diana Deaconu: We produce and sell veneers, timber and logs. We use carefully selected logs which guarantee a high quality of our veneers. Our main species are European oak, beech, European maple, brown and white ash, European walnut, European cherry, spruce, white poplar, linden. We also commercialize different essence timbers, dried, striped and antisepted, with different sizes and thickness.
2) When was your business created? Mr. Aurelian Arnăutu: The company, Uzina Mecanică Rm.Vâlcea was born in 1981. Mr. Ion Oncete: The starting date of our Bakery is March 2018. Ms. Diana Deaconu: We started our first production line in 2008.
3) How did the Pandemic influence your business? Mr. Aurelian Arnăutu: The pandemic crises affected our business last year by decreasing our turnover with 17,3% compared to 2019. Mr. Doru Paraschiv: The sector in which we operate was perhaps the most affected by the pandemic, there were periods when restaurants had to be completely closed, so we had to try sollutions to stay on the market. We focused on delivery service and, during the summer of 2020, we opened the terraces of all our restaurants. Mr. Ion Oncete: The Pandemic had an influence on everything. Knowing that we had to keep a safe distance, pastry food is for parties, for celebrations and all king of events, things that had vanish. Sales have dropped around 30-60%. Ms. Diana Deaconu: It was a period in which we had to close the activity for a short time during the lockdown period, March-June 2020. The revenues decreased because the production and sales we had on the Romanian market decreased.
4) Do you think all businesses were affected in the same way? What type of businesses suffered the most during pandemic? Mr. Aurelian Arnăutu: Regarding our business, the most affected area was the goods for industy. Mr. Doru Paraschiv: Most businesses have probably been affected by this pandemic, but those as restaurants, hotels, travel agencies are among the most affected. Mr. Ion Oncete: Business is vast word and involves many variables. It depends if it was a business for a strict period of time, if lots of people had to do it, if it's made in an open/close space and many other things. Ms. Diana Deaconu: Not all businesses have been affected in the same way. There have been crisis situations in the past (not so prolonged) that we have faced and, having such experiences, we have managed to find solutions to stay on the market.
5) What kind of support did you get from the government/local authorities? Was it enough or not? Mr. Aurelian Arnăutu: We didn't get any support from authorities till now. Mr. Doru Paraschiv: So far, we have only received support from the Government for employees, not for the company. Mr. Ion Oncete: We had no support. Romania, as many other country was not very prepared before this crisis. Maybe with the new projects we will have some help. Ms. Diana Deaconu: Our society has not asked for support for the Government.
6) Do you trust the vaccine as a problem solver? How do you imagine the situation with your business after the lockdown? Mr. Aurelian Arnăutu: The vaccine will solve only a part of this crises and it is not enough. I hope that don't be another lockdown. However, we will survive by adaptive projects to the necessities of our customers. Mr. Doru Paraschiv: Yes, we are confident that the vaccine is the solution to return to a normal life. Mr. Ion Oncete: For many people the vaccine is a solution and for other immunization with the virus is a solution. The vaccine should be trusted! Ms. Diana Deaconu: Yes, I trust the vaccine and we want to be able to return to the pre-pandemic workload.
7) What are your plans for the further development? / What is your future business strategy? Mr. Aurelian Arnăutu: Now our business run well and we are looking for a new machines- tools. We intend to invest during this year approximatively 500.000 euro in new technologies. Mr. Doru Paraschiv: We want the economy to be to reopen and gradually succeed in recovering the losses generated by this pandemic. We will continue to invest in the development of our business. Mr. Ion Oncete: Our business strategy is to produce the same healthy products and make our existing and future clients understand that a healthy food and life, can protect you from an upcoming new Pandemic. Ms. Diana Deaconu: We intend to start selling on the European market not only in Romania.
So, during the interviews we had the confirmation of the fact that the COVID-19 crisis forced a sudden, new way of life upon the world, which scrambled for practical ways to adapt. As for the local companies the lockdown revealed new priorities, capabilities, and outlooks. We have the say that on 1 February 2021, the first cooperation agreement between the European Investment Bank Group and Deutsche Leasing Romania unlocked €370 million in private sector financing, to support small and medium enterprises across Romania affected by the pandemic to benefit from cheaper leasing finance. The initiative, backed by a guarantee from the European Fund for Strategic Investments, aims to increase financing for agricultural and equipment investment, support borrowers in rural areas and less developed regions, and provide an alternative instrument for capital management. The initiative, part of the European Investment Bank Group’s private sector response, intends to enhance the resilience of Romanian businesses to the economic, social and health impacts of the coronavirus pandemic.
Interviewing:
Life in a Bag
prof. Teresa Lessa Santos
Life in a Bag is a Company which products that combine design and sustainability and allows you to create an indoor garden of herbs, edible flowers, and microgreens. The company can be visited online by facebook and its website
1) Which sector does your company operate in? Manufacturing and selling of ecological products.
2) When was your company created? April 2014.
3) How did the coronavirus pandemic affect your business? It did not. On the contrary, we have grown during this pandemic.
4) Do you think all businesses were affected in the same way? What type of businesses do you think suffered the most during the pandemic? Not all companies were affected in the same way. Businesses related to tourism and catering are probably the ones that suffered the most.
5) What kind of support did you get from the local authorities/national government? Do you consider it was enough? We got layoff support for one month in April 2020 and that was enough.
6) In your opinion, how can local and/or EU authorities help local businesses in the most efficient way? They should offer financial support to those companies that show high profit losses in their revenue.
7) Do you trust the vaccine as a problem solver? How do you imagine the situation with your business will develop after the lockdown? Yes, we do. We hope to continue growing after the lockdown.
8) Have you got a plan for the further of your business? Do you consider changing your area of business? We won’t be making any changes and we will continue with our expansion strategy in Europe.
Interviewing Telmo Garcia Marketing Manager of:
PAO DE LO BURGUES
It is a Small pastry company which produces a well-loved Portuguese traditional product with a twist. The company can be visited by its facebook page and its website
1) Which sector does your company operate in? (manufacturing, tourism, food and catering, transport, etc..) Our company operates in the food and catering business.
2) When was your company created? Burguês - Doçaria Portuguesa, Lda started its activity in January 2020, although the brand was created approximately four years ago.
3) How did the coronavirus pandemic affect your business? As a company we have no invoice data, so we don’t have numbers to refer to but the fact that the catering and the events sectors had to close caused a great loss in our profits, as they are an important part of the brand’s revenue.
4) Do you think all businesses were affected in the same way? What type of businesses do you think suffered the most during the pandemic? No, some areas were not greatly affected by the pandemic. The areas that depend on tourism were surely the most affected ones as well as small businesses: restaurants, hairdressers, small commerce, which is where we fit in.
5) What kind of support did you get from the local authorities/national government? Do you consider it was enough? We had all possible support from local authorities in what comes to promoting the brand, but we did not get any financial support either from local authorities or national ones.
6) In your opinion, how can local and/or EU authorities help local businesses in the most efficient way? Small businesses should be supported through subsistence expenses (rent and electricity costs) that could be established with prior invoices to guarantee appropriate use.
7) Do you trust the vaccine as a problem solver? How do you imagine the situation with your business will develop after the lockdown? The vaccine will hopefully be the solution to the opening of markets and the return of commercial activity. I believe that 2022 will be a great year for the growth of our business.
8) Have you got a plan for the further of your business? Do you consider changing your area of business? Yes, we will invest in the promotion and recognition of the brand. No, we are considering expansion but in the same area of business.
Interviewing Andreia Ferreira Founder and General Manager of:
MEIA DUZIA
The Company which produces jams in aluminium tubes made with Portuguese fruits and other ingredients like Port Wine, Douro Moscatel and Madeira Wine. The original packaging keeps the freshness of the jam while making it possible to take it to work, school, on a trip. The company can be visited following its facebook and web page.
1) Which sector does your company operate in? Our company operates in the food business. 2) When was your company created? In February 2012. 3) How did the coronavirus pandemic affect your business? It deeply affected our business with revenue losses over 90% and forcing us to close three shops located in the city of Porto
4) Do you think all businesses were affected in the same way? What type of businesses do you think suffered the most during the pandemic? No, they weren´t. Sectors that work in areas such as furniture, hardware and household items, meat and supermarkets have seen their revenue increase, clearly. Companies directly linked to tourism were clearly more affected.
5) What kind of support did you get from the local authorities/national government? Do you consider it was enough? We got some support related with the layoff measures, but they were not enough.
6) In your opinion, how can local and/or EU authorities help local businesses in the most efficient way? With support measures to companies, with incentives for local businesses and Portuguese products, with the reduction of fixed monthly expenses, among others.
7) Do you trust the vaccine as a problem solver? How do you imagine the situation with your business will develop after the lockdown? The vaccine will not solve it, but it will help people to be less afraid when travelling, to have more confidence in travelling for tourism, and it will also help our staff to feel safer in their daily activities. The company will gradually return to a normal situation, with the need of many adjustments in the way of communicating, selling, etc.
Interviewing: ALTA
1) In what sector do you have your business? The main goal of my enterprise is connected with the retail trade in the chain of self-service shops.. Additional business activities include butchery (parting fresh meat and production of cold meats), selling ready – to – cook meals such as dumplings or roasted pancakes, catering and hotel management.
2) Did the pandemic influence your business? The income from the trade increased about 4% in 2020 in comparison with the previous year. Selling meat and ready-to-cook products reached the some level as usual. Unfortunately there was a significant 40% decrease in the hotel and restaurant business. 3) What kind of support did you get from the government? In spite of being regarded as a big family company and proving the loss of income as far as hotel ad restaurant management is concerned, we haven’t got any kind of support.
4) What are you plans for the further development? Nowadays the plans for the development are highly limited. We are monitoring the changes of the epidemic. Currently the projects which we have launched are still in progress. 5) What is your future business strategy? Our business strategy is based on completing the development projects such as building a bigger central warehouse for our shopping chain and further computerization of each branch of our company. 6) Do you trust the vaccine as a problem solver? I think that vaccination gires us a chance of returning to the normality in our life within 2 years.
7) Are you going to change your business? I haven't got any such plans. 8) How do you imagine the situation with your business after the lockdown? After the lockdown there will be changes in many spheres of business. Unexpectedly, after the time of decline local hotels and restaurants may take advantage of the epidemic because the Polish will choose local services instead of choosing foreign destinations. 9) What type of businesses suffered the most during pandemic? Mainly tourism, restaurant management, catering, events industry and all services connected with these branches.
Interviewing Mr Viktor Grey, owner of:
AMALA VEGAN FABRIKA
1) In what sector do you have your business? I am in the business of producing vegan products. 2) When was your company created? My company ,,Amala ” was established in 2018. We recently turned 3 years old. 3) Did the Pandemic influence your business? May you tell us how? Since our products are mainly bought in bulk by offline stores, sales decreased, since during the lockdown the stores were closed, but the online store will receive more profit, people found an alternative in the form of online shopping.
4) Do you think all businesses were affected in the same way? What type of businesses suffered the most during pandemic? Each business area has suffered in its own way. I think what suffered the most: the food industry, since the biggest profit is precisely from visiting restaurants and eating it in the restaurant premises, delivery and take-away food will not bring such a profit. The beauty services industry, clothing stores, jewelry stores, etc. were also affected. 5) What kind of support did you get from your government? Was it enough or not? We have government support for 3 months. We were paid 800 euros a month, but unfortunately this is not enough to pay salaries and rent for the premises, not to mention the raw materials, because sales have dropped enough. But it's nice that the state is somehow taking care of small business
6) Do you trust the vaccine as a problem solver? How do you imagine the situation with your business after the lockdown? I believe that the vaccine will help the state and people return to normal life, and reduce the death rate of people, because for many people this virus can become fatal. 7) In your opinion, what is the most efficient way to help local businesses from the Local and/or EU authorities? I think that people should get freedom, everyone will get sick all the same, and if you do not give the vaccine and freedom, then all this will drag on for a long time. 8) Have you a plan for the further of your business? Do you think to change business or establish eCommerce? Continue to work and conquer new heights
Interviewing
ELENA PESINA
Tourism agent
1) Elena, How has the coronavirus impacted local business? COVID – 19 strongly affected travel business. Coronavirus destroyed travel business and many of their companies. Many hotels got closed. Many of flights were declined. 2) Which areas were most affected? In my opinion the most affected were countries European,United States of America and Thailand. 3) How prepared were businesses, from a continuity perspective, to manage disasters such as COVID-19? Travel business was not prepared to manage this pandemic situation. Many companies and hotels got bankrupted. 4) What kind of support was set by local authorities/the government? Government gave interest-free loan of millions euros to settle accounts with clients. 5) What impact will the crisis have on business continuity plans? Crisis still continiuos. It is very difficult to make any prognoses about future of the business. 6) When do you predict things will get back to the “new normal”? I predict that we will get back to the normal state in year 2023. 7) What advice do you have for local business owners? Just keep calm and try to optimize expenses.
Dear Elena your company works in medicine, it offers ozone treatment services since 2007, did the Pandemic influence your business? May you tell us how? The Pandemic 2020 had a big influence on the whole worldwide business, and my company is not an exception. Due to quarantine restrictions, we were not allowed to work from March 16th, 2020 till the end of May. Due to all this period of time, we couldn't help the patients, which was really unlogical to me. Do you think all businesses were affected in the same way? What type of businesses suffered the most during pandemic? As I told before the most worldwide business were affected, but mostly travel and leisure business - which includes air companies, trains, buses, hotels, cruise lines, restaurants and bars and others which involved to the travel sector. What kind of support did you get from your government? Was it enough or not? In Lithuania we got some financial compensation for lockdown, it actually the minimum and, of course, not enough, but comparing to other countries it was not so bad. In many other countries, for example, in Dubai, companies didn't get any help from the government and the business owners supposed to pay all expenses by themselves ( rent, taxes, etc). Do you trust the vaccine as a problem solver? How do you imagine the situation with your business after the lockdown? I think vaccination would help to return to normal life, but it will be different. The world has changed and it will never be like in the past. I see only one help from the Local authorities - to vaccinate people as quick as possible. For example, in Israel, they bought all the possible vaccines from all countries, who made the vaccine ( Russia, China, England etc...) and allowed people to choose which one they want to be vaccinated. And it is worked. In your opinion, what is the most efficient way to help local businesses from the Local and/or EU authorities? Mostly all population got vaccines and now they can return to normal life.Another example, Dubai. They do strong health control to all port, airport and etc.So they minimized the risk to bring the virus to the country, but they open the country and allowed to work to whole business companies. As the result, Now Dubai the most popular destination for all people to go for business, travel or just leisure. Have you a plan for the further of your business? Do you think to change business or establish eCommerce? Because the second lockdown didn't affect my company, I can continue, because the medical sector is very necessary for people, so I hope I will soon return to my before pandemic level.
Interviewing Mr Giovanni Autovino, owner of
COLORI E SAPORI DI SICILIA
Mr. Autovino, Colori e Sapori di Sicilia is a company born in 2005 to sell handicraft products to tourists, did the Pandemic influence your business? May you tell us how? Yes, the pandemic influenced my business and it continues to influence my activity because we haven’t tourists. My job is linked with the tourist flow, and until now we haven’t tourists here. Do you think all businesses were affected in the same way? What type of businesses suffered the most during the pandemic? I think we have several types of business and each of them reacted differently to the pandemic situation. My business suffers because it is linked with the tourists that visit the cathedral of Monreale, thus I have and I will have a lot of problems until they give people the chance to travel. What kind of support did you get from your government? Was it enough or not? In Italy, the financial support is not enough and for this reason, a lot of business activities are closing still now. My national and regional governments work to reduce the damage caused by Coronavirus delivering measures to sustain enterprises and families but they are not enough. We pay taxes anyway. Do you trust the vaccine as a problem solver? How do you imagine the situation with your business after the lockdown? Yes the vaccine can resolve this problem, and I hope that the tourist flows will return, but how many time I have to wait, I haven’t any idea. I hope to resist relaunching my activity after the lockdown. In your opinion, what is the most efficient way to help local businesses from the Local and/or EU authorities? Open to travels as soon as possible otherwise trade collapses and we could no longer pay taxes. This is the only way to save what can be saved. Have you a plan for the further of your business? Do you think to change the business or establish eCommerce? No, I haven’t a plan for the future until now. I’m working to launch my first eCommerce platform to give the possibility to my clients to stay in contact with me and my business. I hope that eCommerce can help me to resolve my problems.
1) In what sector do you have your business? Pizzeria and Restaurant 2) When was your company created? My company was established in 2018. 3) Did the Pandemic influence your business? May you tell us how? Yes!! The pandemic influenced my business because I was forced to activate the takeaway and my eCommerce portal. I cannot host people within my restaurant. We are still now in Red Area!! 4) Do you think all businesses were affected in the same way? What type of businesses suffered the most during the pandemic? No..!! They were affected in a different way. My business was the most affected and for this reason, I need to change service implementing the takeaway. 5) What kind of support did you get from your government? Was it enough or not? Any help, and I pay taxes. The fundings coming from my leaders are ridiculous and don’t help anyone. 6) - Do you trust the vaccine as a problem solver? How do you imagine the situation with your business after the lockdown? The vaccine is the solution to the problem. I hope to restart my business activity and I will leave the takeaway service because it was a success for my activity. 7) In your opinion, what is the most efficient way to help local businesses from the Local and/or EU authorities? Re-open everything!! This is the only solution to restart the economy of my city and the economy of a lot of families without a job. 8) Have you a plan for the further of your business? Do you think to change the business or establish eCommerce? No, I haven’t a plan!! I will implement my takeaway service giving more quality and optional.
The popular Balearic island is experiencing rising poverty that's even spreading to its wealthier quarters. The next holiday season is unlikely to heal the wound from the pandemic. Following the first wave of the coronavirus pandemic in spring 2020, Mallorca was the first Spanish tourism resort that had been allowed to reopen. But it was only a brief period that lasted for no longer than two months. Amid rising infections in Spain over the summer, the four Balearic holiday islands were shuttered again and have remained in a permanent lockdown ever since. Mallorca is said to be suffering the most of all Spanish resorts from the collapse in tourist arrivals.
An estimated 75% of all income generated on the island is directly or indirectly linked to the travel industry, which has led to both rising living standards and higher costs of living for its residents.To make matters worse, both the national and the regional governments have announced that they want to spend the €140 billion ($169 billion) earmarked for Spain under the EU's pandemic rescue package for purposes other than tourism. The money is to flow into "future-oriented industries" Madrid says, and the regional government is prioritizing funding for universities, culture and agriculture. Many retailers in his neighborhood have already given up. "For rent" signs are posted every few meters on a shuttered storefront. Only a few pensioners stroll across the town hall square just around the corner on this winter morning. There's never much going on here in the middle of January. But the one or other group of vacationers would certainly snap a few selfies in front of the gnarled olive tree or sit on one of the sunny bar terraces with a latte — if it weren't for the coronavirus pandemic.
Mallorca’s property market has been hit hard. Last year, there were 8,982 sales on the island, a 27 per cent drop on the year before, according to the ministry of development, with travel restrictions for much of 2020 preventing buyers from flying in from both mainland Spain and abroad. For now, Mallorca has largely escaped the worst of the virus, with under 2,300 confirmed cases as of July 17. And despite the terrible toll of the pandemic on both lives and livelihoods globally, some residents are wondering if it might also present a chance to remake tourism on a smaller scale that favors meaningful encounters over the masses.
“I ask locals ‘how many of you have had the chance to spend quality time with tourists?’” explains Batle, the researcher. He says that few people he meets have had those authentic, one-on-one interactions. It’s a problem of scale, and one that Batle believes the pandemic could help upend. “The window is open for changes.”
TRADERS AND LOCAL COMMUNITY
Interviewing people in time of lockdown, Issue nr.4
Credits:
Creato con immagini di Alexas_Fotos - "call to stay at home coronavirus" • ncsmnd - "street city bucharest" • dnovac - "brasov city romania" • franky1st - "tram train travel" • pedro_wroclaw - "old town the market wrocław" • EvgeniT - "vilnius night city" • Pixaline - "cefalù sicily italy" • cocoparisienne - "palma de mallorca cathedral palma"