InCredit

The stalling European economy is affecting a range of businesses, including Peugeot and Coca-Cola. Weak consumer confidence has led to businesses reliant on consumer spending struggling to drive up sales.

The ongoing slump in Europe's car market has resulted in carmaker Peugeot Citeron posting a loss of 5 billion euros (£4.3 billion) for 2012. A further decline has been forecast this year for the eurozone but the ailing company hopes growth in China, Russia and Latin America will offset the losses.

The company blamed 'the deteriorated environment in the automotive sector in Europe' for the disheartening figures. Car sales fell by 8.2 per cent across Europe last year, with the UK being the only major market to buck the trend.

Coca-cola has also seen sales fall in the European region and has warned of a volatile year to come. During the fourth quarter of 2012 sales volumes fell by five per cent in Europe.

Coca-Cola's chief executive, Muhtar Kent, said the figures were due to 'the extension of prolonged uncertainty in Europe', he added 'we expect this volatility to extend through 2013'.

As well as hampering the growth of large businesses selling directly to the public, the eurozone's uncertain future will undoubtedly affect the suppliers working with such companies. As businesses adapt to the changing trading conditions orders sizes will also be adapted, having a knock on effect for other businesses within the supply chain.

Ensuring cash flow remains healthy is vital for businesses and knowing the market conditions will help. The European slump may also lead to a rise in late payments and insolvencies as business struggle to offset the losses.

Regularly checking a customer's ability to pay invoices can prevent unexpected issues and allow suppliers to have control over their cash flow. A business' prospects can quickly change and remaining informed will minimise the impact. Using CreditWatch give businesses the up to date information they need to safeguard their business.

Taking preventive steps can mean the difference between a business failing and surviving in these challenging times.

In these times of unprecedented economic uncertainty all we can do is speculate, and with speculation its always a good idea to have a hard look at what's going on next door. These blogs will be looking worldwide and discussing the good, the bad and the not so pretty economic developments that are shaping the future of the global economy.

This week it comes as no surprise that Britain's economic forecast isn't getting any brighter. The OECD has reigned in predictions of growth to 0.5%, the public sector went on strike but, as George Osborne keeps telling us, we're not as bad as Italy. This is hardly a ray of sunshine.

Italy is in trouble and its chances to recover and become competitive are scuppered by two things, unions and Euros.

The ability to negotiate labour contracts at a national level has left far too much influence in the hands of the unions. Over-zealous job security has ground the circulation of workers to a halt and reduced labour efficiency. Businesses have restricted their size to avoid union rules, so much so that 95% of Italian companies employ fewer than 10 workers. What's worse is that an estimated 15-27% of businesses exist underground as a sure fired way of evading union rules, according to the IMF, leaving 4 million workers completely unprotected.

The effects of the Euro haven't helped either. Running a persistent deficit once meant a country could become competitive through the depreciation of its currency. With this option locked off by the Euro, Italy would have to default on its Euro-denominated debt to recover. But this will damage its credit rating, hitting Italian businesses hard as credit lines are withheld.

Caught in this hard situation, things are growing desperate. Recent crime figures and registered extortion complaints seem to suggest that the shadow of organised crime is moving north.

Italy's new PM, Mario Monti, is due to announce financial measures on December 5th, thought to include a new sales tax and fast-tracking the pension age increase. But will these measures help Italy grow out of the recession? Not significantly.

An IMF inspection team is expected in Italy within the next few days. No date has been announced and the IMF has declined to comment on whether assistance will be given. Their help will be welcome, but even if a short term fix is provided, Italy will still have to address its unions and more pressingly Brussels will have to address the shortcomings of the Euro (within 7 days apparently).

But it's not just up to the IMF to help out the situation. The worst thing the world can do though is isolate Italian businesses. Putting them in quarantine is the best way to spread the infection. Italian companies will keep working despite the mess created by their politicians, unions and currency (95% of businesses have shown Italian's know how to adapt). If you are worried about working with Italian companies, just get a quick and easy international credit report; investigate the business and then make a decision. In these times of uncertainty what we need is prudence, not fear.

The EU parliament's 2010 proposal to exempt micro businesses with under 1 million euro turnover from filing accounts at official registries is still being contested, it seems, at EU Council level. Only when the Council, under Hungarian Presidency since January this year, ratifies the directive by gaining 255 Council votes out of a possible 345, can Member state Governments start to implement law changes in their own territories. According to my European sources, there is a sizeable blocking group at the present time headed by France, Italy and Belgium, meaning that the main proponents (Germany and the UK) are well short of their 255 target. In order to achieve consensus, apparently, a watered down version of the directive ( only companies with less than 500000 euro turnover would be exempt from statutory filing), is being discussed at Council level but a positive outcome is still awaited.

I'm not surprised at all that Germany is leading the charge for less financial transparency in Europe. For many years, the German authorities penalized  GmbH companies that flouted statutory filing law such paltry sums that very few balance sheets ever existed at official registries. The Germans seem to be returning to their long held conservative position of "keep companies' financial positions well under wraps". As for the British Government's position- well, it simply baffles me! For many decades, the UK prided itself on having one the best Companies Registries in the world, containing a wealth of financial and other statutory information that helped facilitate trade between buyers and sellers on open credit terms. Now, UK ministers seem happy to push for a degraded Registry unworthy of its name and tradition. And all because they think non filing of accounts will save micro businesses time and money; thinking that in my opinion is totally flawed. I take some comfort from knowing that there are politicians in other parts of Europe who seem to be agreeing with me!