Europe needs easy small business loans
- 10 years ago
Twenty-three million small and medium-sized enterprises in the European Union (SMEs) form the backbone of its economy but many of them continue to weather economic crisis. In the run-up to a week dedicated to the relaunch of small businesses, we’ll discuss their challenges with Antonio Tajani, a vice-president of the European Commission in charge of the industry portfolio.
Margherita Sforza, euronews: “Vice-President, European industry is not doing very well. In 2012 the manufacturing sector, which accounts for just over 15 percent of Europe’s GDP, contracted. We are far from your goal for European industry to contribute 20 percent of GDP by 2020. What’s to be done about that straight away?”
Antonio Tajani , European Commissioner for Industry: “We must believe in industry. It is unimaginable that we’ll get out of this crisis without an industrial structure that allows Europe to create jobs. It’s not enough to have strong action to reduce the public debt; that has to be accompanied by a real strategy for the real economy, favouring industry and developing the internal market.”
euronews: “The United States believes in industry. Thanks also to a drastic reduction in energy costs, it has managed to grow faster than Europe. The US has succeeded especially thanks to shale gas, obtained from fracturing rock. Is that an opportunity for Europe or a risk?”
Tajani: “In my opinion, it is an opportunity. But we must assess how to use this without damaging the environment. It would be wrong for Europe simply to rule it out. We need to accelerate a technical-scientific analysis that could tell us how we could use this form of energy to make our system more competitive. The European Commission, at the request of the Council, is preparing a study for the end of this year on the impact of energy costs on industry.”
euronews: “Small and medium-sized companies are trapped in a difficult position between public administrations that don’t pay these companies what they owe them and the difficulty of getting credit from banks. There is a European law that requires the public administration to pay its debts within 30 days but countries such as Greece and Italy take more than 150 days to pay. What will you do about this? You promised zero tolerance.”
Tajani: “I promised zero tolerance because just as citizens are required to pay taxes to the state it is equally important for the government to pay the companies that supply them. The term is 30 days, 60 in some cases. It is also important to pay off old debts that public authorities owe businesses. Italy is the most striking case, with approaching 100 billion euros in outstanding debt.”
euronews: “According to a European Central Bank survey this year, small businesses say the conditions of access to finance have got even worse, even though the European Central Bank issued new funds to help the banks. Why haven’t the funds gone from the banks into the real economy?”
Tajani: “The Banking Union should make it easier to use the money for businesses. We have reached an operating agreement with the European Parliament and the European Council to enable loans for SMEs of up to 1.5 million euros. The Basel III rules which require a reserve for each loan, wouldn’t be applied rigidly. [Basel III (or the Third Basel Accord of 2010–11) is a global, voluntary Banking Supervision regulatory standard on bank capital adequacy, stress testing and market liquidity risk.] In other words, fewer reserves will be necessary for loans to small and medium-sized companies, to make more loans and easier loans accessible for small businesses. We have also decided to give more space to SMEs in the next EU budget, for 2014-2020, with the Horizon 2020 package and the COSME programme dedicated to small and medium-sized enterprises. [COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises. Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe’s global competitiveness.] We place a great emphasis on venture capital which is not used enough in Europe – although it works very well in the United States.”
euronews: “This programme is very interesting but it amounts to a few crumbs of the 2014-2020 EU financial perspective, which is still very tilted towards agriculture and territorial cohesion. Couldn’t you do more for companies?”
Tajani: “Even within the funds allocated for territorial cohesion there is the possibility to apply the funds towards growth, to build infrastructure, and for small and medium-sized companies. But we must end the use of Structural Funds for village festivals and concerts. It should be noted that the European Commission and the European Investment Bank with the support of the Council representing the member states have decided to launch a major package with Commission and Investment Bank funds to finance small and medium-sized companies.”
euronews: “Let’s tal
Margherita Sforza, euronews: “Vice-President, European industry is not doing very well. In 2012 the manufacturing sector, which accounts for just over 15 percent of Europe’s GDP, contracted. We are far from your goal for European industry to contribute 20 percent of GDP by 2020. What’s to be done about that straight away?”
Antonio Tajani , European Commissioner for Industry: “We must believe in industry. It is unimaginable that we’ll get out of this crisis without an industrial structure that allows Europe to create jobs. It’s not enough to have strong action to reduce the public debt; that has to be accompanied by a real strategy for the real economy, favouring industry and developing the internal market.”
euronews: “The United States believes in industry. Thanks also to a drastic reduction in energy costs, it has managed to grow faster than Europe. The US has succeeded especially thanks to shale gas, obtained from fracturing rock. Is that an opportunity for Europe or a risk?”
Tajani: “In my opinion, it is an opportunity. But we must assess how to use this without damaging the environment. It would be wrong for Europe simply to rule it out. We need to accelerate a technical-scientific analysis that could tell us how we could use this form of energy to make our system more competitive. The European Commission, at the request of the Council, is preparing a study for the end of this year on the impact of energy costs on industry.”
euronews: “Small and medium-sized companies are trapped in a difficult position between public administrations that don’t pay these companies what they owe them and the difficulty of getting credit from banks. There is a European law that requires the public administration to pay its debts within 30 days but countries such as Greece and Italy take more than 150 days to pay. What will you do about this? You promised zero tolerance.”
Tajani: “I promised zero tolerance because just as citizens are required to pay taxes to the state it is equally important for the government to pay the companies that supply them. The term is 30 days, 60 in some cases. It is also important to pay off old debts that public authorities owe businesses. Italy is the most striking case, with approaching 100 billion euros in outstanding debt.”
euronews: “According to a European Central Bank survey this year, small businesses say the conditions of access to finance have got even worse, even though the European Central Bank issued new funds to help the banks. Why haven’t the funds gone from the banks into the real economy?”
Tajani: “The Banking Union should make it easier to use the money for businesses. We have reached an operating agreement with the European Parliament and the European Council to enable loans for SMEs of up to 1.5 million euros. The Basel III rules which require a reserve for each loan, wouldn’t be applied rigidly. [Basel III (or the Third Basel Accord of 2010–11) is a global, voluntary Banking Supervision regulatory standard on bank capital adequacy, stress testing and market liquidity risk.] In other words, fewer reserves will be necessary for loans to small and medium-sized companies, to make more loans and easier loans accessible for small businesses. We have also decided to give more space to SMEs in the next EU budget, for 2014-2020, with the Horizon 2020 package and the COSME programme dedicated to small and medium-sized enterprises. [COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises. Horizon 2020 is the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe’s global competitiveness.] We place a great emphasis on venture capital which is not used enough in Europe – although it works very well in the United States.”
euronews: “This programme is very interesting but it amounts to a few crumbs of the 2014-2020 EU financial perspective, which is still very tilted towards agriculture and territorial cohesion. Couldn’t you do more for companies?”
Tajani: “Even within the funds allocated for territorial cohesion there is the possibility to apply the funds towards growth, to build infrastructure, and for small and medium-sized companies. But we must end the use of Structural Funds for village festivals and concerts. It should be noted that the European Commission and the European Investment Bank with the support of the Council representing the member states have decided to launch a major package with Commission and Investment Bank funds to finance small and medium-sized companies.”
euronews: “Let’s tal