Prudential Insurance

In November 2011 Prudential Insurance began exiting markets in countries within Europe that had begun experiencing harsh economic times. Prudential saw it wise to go at a loss of ₤49m in debts instead of having to give out extra credit advances. One of the indicators that informed Prudential of its decision included sovereign debt amounts, promises to pay as well as carrying out an analysis on their individual financial balance.

Imperial Tobacco

The cigarette manufacturer reported a slump in the Spanish market which it recorded as 15%. However, the company’s woes in this market were further dealt a major blow when authorities put into effect a smoking ban in public areas and also increased taxes.

Barclays Bank

Being a financial institution that many looked up to for emancipation from the hard economic times, Barclays Bank instead did not commit its funds for credit purposes. The bank reduced 31% of its appearance in Portugal, Greece, Italy, Ireland and Spain by June 2011which translated to a reduction of worth ₤2.6bn. Some buyers got the opportunity of buying bonds which Barclay’s allowed to mature.The risk averseness of the bank meant that no aid in form of trade finance was being awarded to business entities thus choking further exportation by these firms (“Eurozone crisis hits UK companies” para 4).

Conclusion

Most multinationals with subsidiaries across Europe have suffered losses that have been attributed to the harsh economic condition being experienced in the continent. Although not all European countries have registered poor economic situation, the business environment in its entirety has been adversely affected. Poor sales have been recorded by virtually all corporations, transforming to reduced profits, or in other situations, registering losses. These corporations have taken the initiative of reducing their staff as a way of cutting costs and closing down plants in worst affected countries like Greece, Ireland and Portugal. In one scenario, British distillers Diageo have been forced to lay off their team of managers based in Western Europe as a strategy of reducing operational costs. Financial corporations on the other hand have played a role in aggravating an already sorry situation. Majority of the international banks, including Barclays, have refused to advance credit to be used in resuscitating the economy citing an oblique future. Similarly, insurance firms have sensed a dangerous and risky market situation to operate in. They have since withheld funds that could have been used to chip in and offer funds badly needed by enterprises and governments to sustain their weak finances.