Due to the current financial crisis, SMEs are finding it increasingly difficult to finance "not only riskier investments but also their basic day-to-day operations," said Georg Toifl, president of UEAPME, the organisation representing European SMEs, ahead of today's EU summit (15 October).
Key measures to ease the pressure would include more flexible handling of the European Investment Bank's (EIB) budget for SMEs as well as the provision of sufficient liquidity by the European Central Bank (ECB), Toifl said.
In this context, he welcomed the action plans drafted by the G4 (Europe's four largest economies), the ECB and the Eurogroup, and was particularly supportive of the EIB's pledge to increase loans for small businesses to €7.5 billion per year.
"Keeping capital flowing" is key to SMEs' survival, the Commission vice president in charge of enterprise, Günter Verheugen, said at an event in the European Parliament yesterday (14 October). He defended the Commission's bail-out measures to national banks, which he described as "the central nervous system" of the economy.
A majority of businesses have already postponed or have even been forced to cancel their investment plans due to the "gloomy" financial outlook, which is likely to worsen in 2009, Verheugen warned.
Amid such an environment, SMEs not only stressed the need for ongoing access to finance, but also to secure existing capital. Toifl thus called upon EU leaders to apply guarantees for deposits of up to €50,000 not only to private households, but also to SMEs (EurActiv 08/10/08).
"European small enterprises' confidence in the financial system has been shaken to the same extent as private households. They deserve the same degree of attention from member states," Toifl argued.
Commission today even proposed to increase the minimum protection for private bank deposits to €100,000, which will be discussed by EU leaders at their summit.