section_path: Economic impact by continent, region and country/Europe
section_name: Europe
paragraph_text: Europe
  
  In Spain, a large number of exhibitors (including Chinese firms Huawei and Vivo) announced plans to pull out of or reduce their presence at Mobile World Congress in Barcelona. On 12 February 2020, GSMA CEO John Hoffman announced that the event had been cancelled, as the concerns had made it "impossible" to host.
  
  Owing to an increase in the demand for masks, on 1 February most masks were sold out in Portuguese pharmacies. On 4 February, President Marcelo Rebelo de Sousa admitted that the epidemic of the new coronavirus in China "affects the economic activity of a very powerful economy and thus affects the world's economic activity or could affect". He also admitted the possibility of economic upheavals due to the break in production." On 28 February, the Swiss government has banned all public and private gatherings of more than 1,000 people until 15 March, including forcing a cancellation of the Geneva International Motor Show.
  
  Before the COVID-19 pandemic, about 86% of EU enterprises were making investments. In 2021 this remained mostly steady compared to 2020 (81%). EU businesses were optimistic for investment throughout 2022, with 20% more anticipating investment to rise than fall.
  
  According to the a survey on investment conducted by the European Investment Bank, European firms lost one-quarter of their gross income on average in the second quarter of 2020. The loss was substantially greater than the drop experienced by enterprises during the 2008 financial crisis and the Euro area crisis.
  
  The European Investment Bank estimates that corporate investment in the EU could fall by between 31% and 52%, even in more favourable scenarios due to the pandemic. They also estimate that even after strong policy intervention, 51–58% of EU firms face liquidity shortfalls after 3 months of lockdown. 34% of enterprises also projected their capacity to fund internal investments to decline in the coming 12 months. The European Investment Bank Group created a €25 billion Pan-European Guarantee fund to help small businesses recover from the COVID-19 crisis. As a result of this guarantee fund, the EIB Group, in partnership with local lenders and national promotional institutions, is able to increase its support to small and medium-sized companies.
  
  Small businesses have been hit hard by the COVID-19 pandemic and its lockdowns. Many of them also lacked the technological tools to survive in an unprecedented environment. To make things worse, in the European regions most affected by the coronavirus pandemic small businesses are usually less digitalised.
  
  Less than 20% of European small and medium-sized enterprises (SMEs) are highly digitalised, whereas almost 50% of large corporations are digitalised, having an economic impact. Small businesses are the engine of the European economy and they play a vital role in our economic recovery and growth. These businesses need financial support for their digitalisation. In response to COVID-19, almost 60% of EU businesses have received financial help – subsidies or other non-repayable aid. Enterprises that incurred sales losses were more likely to get policy help (about 73% received financial assistance, compared to 47% of firms that did not see any sales declines).
  
  Due to the COVID-19 pandemic, 49% of enterprises in the European Union saw a drop in sales in 2021, compared to 21% who saw a boost. Digital businesses withstood the pandemic better than enterprises that were less productive before the crisis. Sales were down more for Small businesses, by at least 25%, than for medium or large businesses. In response to fewer sales, 23% reduced their investment intentions, while just 3% intended to increase their investment. The share of companies that invested dropped from 86% in 2019 to 79% in 2021.
  
  Furlough and short-term employment programmes in the European Union kept people employed, while bankruptcy filing rules for businesses were reduced, allowing workers to keep their jobs. A significant portion of businesses benefited from the policy support for the COVID-19 shock across all EU regions. The most prevalent forms of assistance across all areas were subsidies or other non-repayable support measures, including support for furlough programs. Inequality existed across EU regions. Compared to enterprises in less developed regions (40%) or non-cohesion regions (37%) firms in transition regions were less likely to get subsidies (28%).
  
  Since the beginning of 2020, EU enterprises that embraced advanced digital technology and invested in becoming more digital during the pandemic have increased the number of employees they employ. After the COVID-19 outbreak, the number of non-digital enterprises that downsized was also greater than the share of non-digital firms that had positive job growth. Non-digital companies had a negative net employment balance.
  
  Eastern Europe (together with Central Asia) saw a dramatic drop in economic activity as a result of COVID-19. GDP in the region fell by 4% on average in 2020, with businesses in contact-intensive service industries being particularly adversely impacted. However, the level of governmental support was vast, with fiscal measures totaling about 6% of GDP. The majority of businesses suffered losses in 2020 and/or 2021, with 13% still predicting that they won't be able to recover from the pandemic-era loss of business until 2022.
  
  When compared to the final quarter of 2019, investment levels in several nations decreased or were flat in the second quarter of 2022. Denmark, Italy, Ireland, and Sweden are exceptions, with investment levels increasing by more than 10%. Other nations had drops in investment of up to 13%, such as Slovakia and Bulgaria. By mid-2022, Bulgaria and Slovakia had recovered the least from the pandemic, while Slovenia, Lithuania, and Estonia had recovered the most.
  
  The proportion of EU enterprises that have invested in 2023 has returned to pre-pandemic levels (85%), and investment per employee is even higher. Government assistance has also decreased, with 16% of European firms making use of government grants to finance investment. Only 21% of firms (that took part in a survey conducted in the EU) received grants the previous year.
  
  During the COVID-19 pandemic, there was less extensive help provided to mid-caps than to SMEs and large enterprises. In response to COVID-19, 51% of major mid-caps in the European Union obtained financial assistance, compared to 60% for SMEs, small mid-caps, and 56% for the largest enterprises.
  
  Among firms that received at least one type of support during the COVID-19 pandemic, only about 13% of large and small mid-caps reported receiving government support in response to COVID-19, compared to nearly 20% in SMEs and 15% in large firms. In 2022, mid-caps were less likely to get government funding for COVID-19 compared to SMEs and XL businesses. On average, 67% of small mid-caps and 63% of big mid-caps cited trade barriers connected to the Russian invasion of Ukraine, with 54% of small and 54% of large mid-caps suffering obstacles caused by both COVID-19 and the Russian invasion.
  
  Mid-caps are nearly twice as likely as SMEs to boost investment post-pandemic, but at a lower rate than large enterprises. Firms anticipating a rise in investment minus those expecting a decline post-pandemic have a net balance of 20% for small mid-caps and 26% for big mid-caps, while SMEs report just 10%.
  
  As of 2023, real investment is up 5% from before the COVID-19 crisis. It was down 11% at the same time after the 2008 financial crisis.