‘Zombie’ Firms Kept Alive by Covid-19 Bailouts, EU Official Says

Massive Covid-19 bailouts probably kept some “zombie” companies alive when they would normally have gone bust, the European Union’s top antitrust official said on Wednesday.

Regulators usually screen state subsidies to avoid “undesirable effects” such as life support for unprofitable businesses, Olivier Guersent, the head of the European Commission’s competition unit, said at an online conference for the Organization for Economic Co-operation and Development. Those rules were relaxed last year to allow states to support businesses as the pandemic halted normal business activity.