Ahead of this week's European summit and the G20 in Pittsburgh, European industry is making louder its calls to tackle the credit crunch, which mainly affects small and medium-sized companies.
At the beginning of September, the president of German business association BDI, Hans-Peter Keitel, and his Italian counterpart Emma Marcegaglia, who chairs Confindustria, addressed a letter to the top EU institutions renewing their call for a temporary softening of capital requirements for banks.
"It is urgent for the EU to relax banks' capital requirements and risk assessment methodologies properly in order to facilitate companies' access to credit and a rapid economic recovery," they wrote in a letter sent to the president of the European Commission, José Manuel Barroso, and the president of the EU, Swedish Prime Minister Fredrik Reinfeldt.
A top advisor to Confindustria, Rodrigo Peduzzi, confirmed to EurActiv that other business associations across Europe are joining their call, and will collectively raise the issue through Brussels-based umbrella organisation BusinessEurope ahead of an extraordinary EU summit to be held on Thursday, which is meant to coordinate the EU's approach to the G20 in Pittsburgh on 24-25 September. "It is a problem that is felt well beyond the Italian and German borders," he said.
"We need a temporary softening of the rules on capital requirements. Banks should be allowed to keep less capital for a limited period in order to lend more in the current phase," he argued.
He cited the case of an Italian textile company which found itself short of funds to run its regular business after a few clients were not able to pay for their deliveries on time. Banks postponed the provision of a short-term loan, and the company ended up cutting its workforce.
Peduzzi warned that this situation is very common across Europe and needs urgent measures rather than long-term changes to legislation.
He said that even financially sound companies are faced with an unprecedented need for capital, as the recovery begins to reach Asia and other far-flung markets. If firms want to survive, they increasingly have to be export-oriented, Peduzzi underlined.
Even after the end of the worst phase of the crisis, companies "need capital to face the post-crisis scenario. Otherwise we'll experience a W-style recovery, with a new fall after the recovery," he warned.
Rodrigo Peduzzi was speaking to Francesco Guarascio.
