Speaking from confinement at home, Joan Canadell prioritises people over the economy but also points out that many companies will be hit hard by the devastating effects of the Covid-19 crisis. A supporter of a total lockdown, as the Chinese did with the city of Wuhan, the chamber president believes that drastically halting business activity will be compensated by benefits to public health.
We’ve never had a crisis like this.
Not our generation. We’ve yet to see whether the effects will be greater than those from the 2008 financial crisis. It’s a different type of crisis: that one did not come about as suddenly as this one, and it took a long time to come out of it. The Covid-19 crisis appeared out of nowhere and we hope it will also be over relatively quickly.
Were we prepared for it?
Not at all. Neither from the point of view of health nor society in general, which tends to live day-to-day. But nor was the business sector, which works on the basis of credit. We never imagined such a thing could happen so suddenly and so we weren’t ready for it.
Have the authorities responded well?
That depends on where you are talking about, but there has been a general failing on the global scale. China went through this two months ago and no other country seemed to take note. Here everyone has failed to some extent. Having said that, if we compare the measures taken by the state authorities, which have full powers here, and those implemented by other countries, it’s obvious that from our point of view they aren’t doing very well. Or others are doing better. The Catalan government has the powers it has and what it can do is limited, but in terms of the strategy we need to follow, we are all in agreement with president Torra’s call for a total lockdown of the country and a halt to business activity.
Other associations don’t agree.
We debated the issue in the chamber and there were some who were in favour of only a partial lockdown, but in the end the overall consensus was that it would be better to close things down completely. We think that if we don’t stop everything we can, then the disease will do it for us in a disorganised way over which we will have no control. Without planning, with the disease deciding who must stop and who can keep going, it makes everything more complicated. At the same time, we’re basing our argument on the experience of Chinese companies in Wuhan, who have told us that until they stopped completely the pandemic did not stop. In Wuhan, just about everything came to a halt for two weeks, and after that activity began again gradually. Over two or three months everything was carried out in a very coordinated manner. We have to accept that stopping for a month is not the end of the world. Just about all companies stop for a month of holidays every year.
There are sectors that never stop.
It’s true, but the consequences of not stopping for a month could mean that the problem, which also affects the supply chain, could be extended for three months.
But there will be exceptions.
Yes, the health sector and the entire food sector chain. Even the companies that make the ink for the packaging of food products. But perhaps just one shift instead of three will be enough. There will be some exceptions, but not many.
Does the crisis hit small companies, the self-employed and workers hardest?
It’s a global problem. The auto sector has stopped almost entirely. And fashion and textiles. The crisis is affecting everyone, small, medium and large. Obviously, the self-employed person living on €2,000 a month can suddenly be left with nothing. Large firms are better funded or have more access to credit. But I don’t think this crisis discriminates,
Is the help offered to SMEs and freelancers sufficient?
No, not at all. From the first day we said that the important thing is to have liquidity and, for the moment, from the information we have, the banks are not giving credit without limitations, they want guarantees and so it seems that the liquidity that companies and SMEs need will not be enough. And it’s not only an issue of liquidity, as the sectors that have sustained losses need help. It’s not the same for sectors like tourism or restaurants, which have completely closed down, as for industrial sectors, which have continued producing to some extent.
Will measures ’during’ and ’after’ be required?
Some measures will overlap, during and after, but the most important thing is a total lockdown for two or three weeks, and then a recovery period of two to three months. After that we’ll see which companies can keep going and which can’t, and that’s what concerns us. What we want to avoid is any company having to go into receivership because of the Covid-19 crisis. We have to try and avoid any company getting to this point, or as few of them as possible. We provide expert advice on our website, and on the first day alone we got enquiries from 130 companies, a score of which fear that the situation could force them into receivership.
Do you have any idea how many companies are in this situation?
We still don’t know. But although the state of emergency does not allow some companies to submit a temporary redundancy plan because they are not considered to be in a sector that is affected, they still have difficulties operating, or they have no more orders, or they can’t pay all of the bills. Or they might even be companies that, even laying people off temporarily, still can’t go on for three or four months due to expenses like rent or mortgage. There are thousands of such companies in Catalonia. We’ll have to see how many of these firms can be saved, and our aim is for no company to close down due to the coronavirus.