Recovery ‘unthinkable’ without strong SMEs


A combination of loans for SMEs, bank rescue schemes and the implementation of the updated Late Payments Directive could help reboot Europe’s ailing economy, Philippe De Buck, director-general of BusinessEurope, told EURACTIV in an interview.

De Buck said BusinessEurope had itself published a new report on how to improve companies’ access to finance to help protect viable companies from the credit crisis. 

However, he acknowledged that innovative SMEs were facing a particularly precarious financial situation at present, and said this would damage Europe’s prospects of recovery if efforts to get credit flowing were not effective. 

“SMEs’ access to affordable financing has been restricted. Due to banks’ higher risk averseness, credit standards have tightened substantially, making it hard for SMEs to find credit.” 

“Young and innovative SMEs, which are thought to pose a bigger risk, face even bigger problems. Their situation is complicated by further aspects of the crisis, such as the collapse of credit insurance and trade financing,” said De Buck. 

He expressed optimism that the range of measures undertaken by the business community, European and national policymakers can help restore confidence to the banking system and support small companies which in turn can lead to job creation. 

De Buck pointed to national bank rescue schemes, loans and financing provided by the European Investment Bank and European Investment Fund, and the European Commission’s efforts to tackle late payments by public authorities as evidence of a concerted effort to overcome cash-flow problems for businesses. 

The Commission last month published its recast Late Payments Directive, which urges public authorities to settle their bills within 30 days or face financial penalties (EURACTIV 09/04/09). “If implemented rapidly and effectively in all member states, the directive could help SMEs to overcome their cash-flow problems,” De Buck said. 

He described the range of measures announced across Europe as “impressive”, but said it will take time before their effectiveness can be assessed. 

“Furthermore, it must be stressed that spending billions of euros alone will not cut the mustard. The measures must be coordinated and we must create positive spill-overs. This is the real challenge,” he said. 

De Buck also cautioned against “overregulation” of the financial industry, as this may jeopardise “financial innovation” and further restrict funding for businesses. 

To read a full transcript of this interview, please click here

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