Guillaume Rose, MEB: "We risk mirroring the Great Depression”

As it goes, Monaco will be out of lockdown on May 4th. This comes as a relief for the more than 5,000 businesses based in the Principality, which are facing severe economic challenges. Whereas the Prince’s Government and the Mayor of Monaco have taken measures to avoid these difficulties, the economy will undoubtedly suffer for several months to come.

The Monaco Economic Board (MEB) is a body which acts as the spokesperson for roughly 500 businesses based in the Principality. Guillaume Rose, Executive Director General, explained the situation that companies worldwide are currently facing and how it will affect Monaco.

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“Our role is to assess the current situations faced by our members and gather their opinions,” explained Rose. “We continue to work now, asking them for their positions regarding the different aspects of the situation, their market losses, their needs. We then pass on this information to the Prince’s Government.

“We risk mirroring the Great Depression”

He asserted that this was the first time an economic crisis had occurred in a long time; even the 2008 crisis was financial. “We are now in a time where businesses do not know what tomorrow will bring. The economy is being stifled, and the more time passes, the more we risk mirroring the Great Depression. All of this is very harmful to the economy.”

This is not to say that all businesses will suffer. From a study carried out amongst 36 companies in Monaco, the MEB has been able to assess which business are worse affected. “The crisis seems to have spared the food processing industry,” said the Director-General. “It certainly faces difficulties, but it is doing well overall. On the other hand, the events and tourism sectors are very much affected. It’s not the size of the company that counts, but its field of activity.”

“There is a lot of local resilience in times of crisis”

Although estimates of loss in the tourism industry for 2020 currently standing at $264 billion, businesses in Monaco have received a generous boost from the Prince’s Government. Rose agreed that the measures were appropriate for the level of economic hardship that could be faced and also due to the lack of possible help offered by the EU. “Monaco is not part of the European Union, so we do not benefit from EU credit or the guarantee fund. But there is a lot of local resilience in times of crisis. [The government’s measures are] a stable, clear system that is advantageous for companies and ensures a minimum for employees.”

Monaco is already luckier than France

Regarding the end of confinement, no one is certain what will happen. Rose believes that Monaco is already luckier than France in that their lockdown will end one week before. “This will allow us to establish strategies, reopen the shops, bring back employees and implement a series of measures.

“I don’t think we will return to “normal life” before the end of the year,” admitted Rose. “Things will open over time.”

Tourism in the Principality

With the tourist season ending by the time governments ease such measures, Monaco’s economy is set to face problems. Yet there is hope, as Rose assures that 60% of the Principality’s tourism comes from the EU, where the internal travel ban will be less strict. “If the epidemic is contained and lockdown is lifted on May 4th, we will probably be back on our feet.”

Long-term consequences

In terms of long-term consequences, the drop in exports will affect Monaco, a large part of which goes to Africa. It is difficult to predict at this stage. “According to economists, for every month confined, it is estimated that it will take six months to recover,” laments Rose. “Although we have avoided the health crisis in Monaco, what about the economic crisis? In my opinion, we have a lot to fear about the economic consequences of this.”

Fiers des entreprises de la Principauté, de leur créativité et de leur réactivité. https://t.co/OPipHdMTab

— MonacoEconomicBoard (@MEB_Monaco) April 21, 2020