Eurozone crisis badly affecting UK SMEs

The crisis in the Eurozone is certainly having a significant effect on businesses in the UK and it is thought that SMEs are being particularly badly affected. The crisis has meant that many firms are generally worried about considering new markets in Europe because they are worried about their financial stability.

In a survey that was conducted by BFS they found that nearly 20% of small businesses in the UK are afraid of doing business in Europe. This is negative for the businesses as it potentially limits their horizons and prevents them from undergoing expansion that could significantly boost their profits.

The survey also highlighted another problem in that businesses are also feeling the Eurozone crisis affect them at home. Nearly one third of companies stated that they feel the crisis has affected the day to day business of their company.

It is not just the Eurozone crisis that is preventing businesses from pursuing international trade however. Nearly 40% of respondents stated that they do not do businesses internationally because they feel the cultural difference is too extreme. A similar number of businesses stated that they are not trading internationally for financial reasons.

The head of the company responsible for conducting the survey, BFS, is David Postings and he has said, “The EU is being significantly affected by the debt crisis and it is definitely affecting trade within the Europe. This is not the only reason why companies are not choosing to trade abroad, but it is a factor and it is important that it be minimised.”

The survey highlighted some regional differences for the problems being faced by Europe affecting the UK. It seems as if London is the area that has been worst hit with around 40% of businesses stating that they are struggling to some degree because of the crisis.