Monday, March 16th, 2020
Letter to President Von der Leyen about supporting SMEs through the EU Recovery Plan
Dear Mrs. President von der Leyen,
First of all, we would like to express our appreciation and thanks to the entire EU Commission for the far-reaching efforts that you and your colleagues have made, which in many respects have met our demands to deal with the Corona crisis. We therefore expressly welcome the new guidelines for the reopening of the internal market and internal borders, in order to at least partially enable a tourism season that is extremely important for many member states this year. This helps prevent an economic disaster in the regions worst affected.
However, we have so far seen little progress on two crucial points:
1. No conditions have yet been attached to the EIB loan guarantees and SURE funds, which will guarantee that these funds really benefit the self-employed and the smallest companies. Banks are still reluctant to give emergency loans to the smallest companies, charge scandalous interest rates and demand additional guarantees – even though they already have access to EIB guarantees that allow 100% coverage protection.
In addition, we emphasize once again that SURE will only help the self-employed, if the member states suspend the “normal criteria” for entitlement to short-time work compensations or unemployment benefits in the case of the self-employed. We would like to ask you to enforce the relevant conditionality when conceding the EIB guarantees and the SURE funds. As a result, at least 20 percent of the EU funds or guarantees must first and especially reach the smallest companies and the self-employed as soon as possible and with no red-tape attached other than sensible protection of taxpayers’ money.
2. As European SMEs, we continue to expect a large SME stimulus programme. With this the most affected, in our estimate at least five million small and medium-sized companies, could now be given a second chance and allowed to reorganise after the crisis before they have to file for bankruptcy.Europe cannot afford a bankruptcy rate of 20 percent or more, neither economically nor politically.
We combine also this with an urgent request to you: the funds from the recovery fund that you are now proposing for economic reconstruction must go, with priority, to European SMEs – with a volume of at least 50 billion euros – and not to big industry. Large companies must not be allowed to solve their structural difficulties, which existed before the Corona crisis, with state funds earmarked to deal with this crisis. This includes, for example, new car scrapping bonuses or partial nationalisation of previously ailing companies.
Investing in medium-sized companies now means ensuring that millions of companies are given the opportunity to push ahead with digitalisation, launch new products, services and processes, conquer new markets and win new customers or partners.
In an emergency situation like this and with a little help from outside, as is required and needed, small and medium-sized companies will turn creative ideas into successful business models in the shortest time possible. As we did during and after the financial crisis from 2008 to 2013, we managed, in this way, to keep employees as long as possible and be the first to create new jobs . Since 2015, 80 percent of new jobs in Europe have been created within SMEs and not by big industry, even if SMEs “only” account for 60 percent of the economy.
European SMEs rightly need and expect more intensive support from state aid than large companies. In order to boost the economy, SMEs need non-repayable subventions – small fixed amounts, without co-financing, but for a significant number of companies, and directly managed by the European Commission to avoid delays. The De Minimis rules will not be affected at all. And yet the effect will be striking.
Please always remember: SMEs are the heart of the European economy.
European Entrepreneurs CEA-PME , the largest voluntarily organised association for small and medium-sized enterprises in Europe, together with the European Small Business Alliance (ESBA) and the Czech Association of Small and Medium-Sized Enterprises (AMSP), a total of 35 small and medium-sized enterprise associations across Europe, ask you and your colleagues: This time break new ground according to the principles of the EU and “Think Small First”. Please launch a “Reload SME program” now!
The European small and medium-sized businesses will reliably stand by your side in this challenge!