Contagious economic failure? Discourses around “zombie firms” in Covid-19 ridden Germany and Italy

As the spread of Covid-19 hit societies around the world, governments stepped up to contain the pandemic’s economic shock. Governments saved businesses and stabilized employment through extensive fiscal relief packages. In this paper, we analyze public debates around zombie firms – businesses that are unprofitable and/or unable to pay interests on their debt but still receive public aid. In popular culture, zombies are contagious creatures that threaten the “healthy” order of society; in economic discourse, we suggest, the zombie trope is no less rich in cultural meaning and metaphor. Specifically, we are interested in how narrative meaning around zombie firms can be employed to describe the role of the state and the role of the market in addressing economic crises and economic transformations. We comparatively explore how zombie firms are discussed in two societies, Germany and Italy, during the first two years of the Covid-19 pandemic. Combining computational and qualitative text analysis, we investigate how newspapers on the left and on the right imbue this term with meaning. Our results show that German and Italian debates are more similar than expected. Right-leaning newspapers in both countries depict zombie firms as a problem of debt, which is seen as caused and aggravated by undesired state intervention in market dynamics. Left-leaning newspapers articulate more nuanced positions: while German left-leaning newspapers tend to reject the trope of zombie firms and defend pandemic state interventions such as short-time work programs, their Italian counterparts also argue for the need for such policies but associate zombie firms with doubts about the efficiency of state support in the long term.