ADVERTISEMENTTwenty-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 talk about the fashion industry, in which five million jobs are at risk in some way because of counterfeit production. You recently met with fashion sector representatives; what did you promise them?”
Tajani: “We have a very strong strategy against counterfeiting. Buying a counterfeit product means helping organised crime behind this activity – with a turnover as big as the illegal drugs trade. Buying fakes damages businesses and workers.”
euronews: “You’re preparing an action plan for fashion?”
Tajani: “We are preparing an action plan for fashion. This is the sector that can promote Europe’s image outside the boundaries of Europe. This sector can attract tourists to two events we staunchly support: the Milan Expo in 2015 and the European football championships in France in 2016.”
euronews: “Europe has regained competitiveness in biotechnologies and nanotechnologies in terms of knowledge, but when it comes to translating an idea into a marketable product we don’t do as well. What can you say to companies in these sectors to boost their competitiveness?”
Tajani: “For many years, the results of European research in these areas have been used by the Japanese and Chinese for their businesses, that were competing with our businesses. That ‘season’ is now over: the big Horizon 2020 package aims to put money towards using research and innovation linked with industrial policy. We have tried to address a problem that has actually damaged our businesses.”
euronews: “A final question: we are approaching an EU summit in February – dedicated to competitiveness and industry. What can you promise Europeans who are afraid of further relocations and more loss of jobs?”
ADVERTISEMENTTajani: “Besides the fiscal compact, we will do our best to coordinate European budgetary policy, at the European level to coordinate industrial growth. We could achieve a breakthrough, after so many years of policy being based only on economic financing and service – a policy based on the real economy, where finance and services will be called on to support the real economy. This is the only way we can create new jobs and compete globally, focusing on quality and not quantity.”