EU Advocacy » Y 2000 Declaration » Financing SMEs
Millennium Declaration:
Our vision on FINANCING SMALL BUSINESSES
The true purpose of an economic system should be to produce and fairly distribute the goods and services where and when required by society. In this respect money should be primarily used to serve trade in goods and services.
Whenever possible, small businesses should be self-financed. Tax regimes have to ensure that entrepreneurs can release the productive capacity of their businesses by re-investing profits without cumbersome tax obligations.
Financial institutions, which can also help to provide finance to release the productive capacity of small businesses, should do so in a spirit of partnership. To make this effective Small business organisations must be equal partners in all financial and economic forums so as to ensure that money will be used as risk capital, and not trade in more and more complex forms or simply as a commodity.
Investment, whether financial or otherwise, in small businesses is the basis for sound, stable and sustainable growth in the economy.
Learning from the past
Major economic debates are now held at global level, and only with a minority of experts and interest groups. Most economic and social groups, including the small business sector, are neither adequately listened to nor precisely consulted.
The virtual trade of money as a commodity only involves a few financial experts engaged in competition, which challenges the rules of exchange in a fair free market economy.
Public governance has failed to maintain stability between investing institutions and creative businesses. Most governments are therefore dragged into a situation where they are forced to use budget mechanisms and taxation to repair the damage caused by this instability.
Key policy-recommendations for the future
- Increase or create incentive measures to ensure that investment is geared towards productive projects, particularly in small growth businesses
- decrease the level of trade in finance by establishing clear and simple rules regarding the creation and use of financial credit and derivatives. Such rules need to take into account the current information society changes
- Establish an international economic council composed of representatives of international organisations as well as representatives from all economic and social groups to review the relationship between goods, services and money
Page last updated: 11/01/2007 4:47:25 PM