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The Chamber of Skilled Trades and Crafts has stressed that it is important to distinguish between companies engaging in abuse and companies that are actually struggling.
Due to the coronavirus pandemic, crafts businesses are facing a higher risk of bankruptcy. 72 companies declared bankruptcy during the first semester of 2021 – 27% more compared to the first semester of 2019, and 47% more than in 2020.
In a statement published on Tuesday morning, the Chamber of Skilled Trades and Crafts stresses that while these figures may be worrying, they should be put into context. In particular, the Chamber points out that while skilled trades and crafts represent 21% of all enterprises in Luxembourg, they only account for 11% of all bankruptcies.
Even though the sector is relatively robust, the high risks faced by companies due to the pandemic should not be forgotten, the Chamber continues. Not only has the state stopped paying out financial aid related to the pandemic, but 30% of the around €338 million that have been paid out must be reimbursed. According to the Chamber, this puts "a certain pressure" on companies when it comes to cashflow.
In addition, companies have to deal with bottlenecks of raw materials. This leads the Chamber to fear that businesses that are already weakened might only experience the effects of all of this in a few months. For this reason, the Chamber demands that Luxembourg's legislation regarding bankruptcy and insolvency must be modernised.
In particular, the Chamber of Skilled Trades and Crafts demands that there must be a distinction between companies engaging in abuses and companies that are struggling because of an unfavourable economic situation.