Vilnius, 16/09/2013 (Agence Europe) - On Friday 13 September, the European Commission called on EU28 finance ministers to back its initiative on finance for small business, launched with the cooperation of the European Investment Bank.
The green shoots of recovery in the eurozone are fragile amidst large risks, warned Vitor Constancio, the vice-president of the European Central Bank.
Small businesses are the backbone of the European economy, said Economic and Monetary Affairs Commissioner Olli Rehn. He was not the only commissioner to attend the finance ministers' meeting in Vilnius. Regional Policy Commissioner Johannes Hahn said it was important to invest in small business, saying that his calculations on the back of cigarette packet were that there were 23 million small businesses in Europe and 27 million unemployed so although his calculations might be “naïve”, it could be possible to almost wipe out unemployment. Under the present programming period, the EU budget earmarked €70 billion for financing small business and Hahn would like that to be doubled for 2014-2020.
Rehn listed the advantages of the joint EIB-Commission plans. They would reduce the fragmentation of financial markets in Europe and help rebuilt the credit channel. He said that, despite the improvement in financing conditions for SMEs, companies in the South have difficulty borrowing on the same terms as companies in the North. Without affordable credit, investment that brings growth will not see the light of day, he warned. The initiative also seeks to reduce SME dependence on the banking sector. The Commission wants the member states to fully back the plans, to be submitted to the European summit in October.
Constancio said the ECB was taking a cautious approach because the economic shoots of recovery were still fragile and subject to a number of risks. He was also concerned about the fragmentation of the banking system and also of the real economy, with divergent levels of growth across Europe. (EL/transl.fl)