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Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro
Remarks by Vice-President Olli Rehn at the ECOFIN press conference
13 September, 2013
I will focus on just one issue which we discussed this afternoon, and that is the very important issue of SME financing.
I also reported on other issues including the St Petersburg Summit of the G20 last week, when Europe was, for the first time for several years, not the epicentre of the discussion, or the crisis. Last week, we saw in St Petersburg that the world economy is longer moving in a three-speed trend, but we rather have a multi-speed recovery, where growth is picking up in the advanced economies, while slowing down in the emerging economies. I also informed the Ministers that the next meeting of the IMF in October is likely to focus on the issue of spillovers from the eventual reversal of unconventional monetary policy. We are preparing for that discussion, supporting the IMF, in order to have a genuinely global strategy to address this important challenge.
On the issue of SME financing, there are as yet few signs that the stabilisation of financial markets and the gradual upturn in the European economy are translating into improved lending conditions for small and medium-sized enterprises. Businesses, especially in southern Europe, continue to face significantly higher rates than their competitors in northern Europe. This is holding back the recovery of growth job creation. Without affordable credit, we will not see the investment needed to support a sustainable recovery and job creation.
Thus, there is a clear case for action by the European Union to address this market failure. The Commission has been working hard together with the European Investment Bank and the European Investment Fund to flesh out the SME Initiative, which was originally supported by the European Council in June.
The proposed SME Initiative would bring critical added value in a number of ways.
First, it would help to overcome the fragmentation of financial markets in Europe and thus contribute to repairing the impaired credit channel.
Second, despite being a new initiative it could be implemented under the existing and tested framework of the Community instruments like COSME and Horizon 2020.
Third, it would help develop European capital markets by revitalising the European market in asset-backed securities and thereby reducing the reliance of European SMEs on bank financing.
And fourth, the involvement of the EIB and EIF in the structuring of each transaction would provide a standard approach and facilitate the investors’ analysis of each transaction. The EIB Group would make sure that risk is properly assessed and managed in all these transactions.
Finally, the SME Initiative would complement the national actions taken in support of SMEs using the structural funds.
To proceed further with the necessary technical work for the implementation of this initiative, we need a very clear commitment of support from the Member States at the European Council in October. I have made the case strongly today for this support in our meeting today and I would like to make it again now. Quite simply, for the sake of the recovery and the SMEs that are the backbone of our economy and society, we have to make this happen.
We have done all the necessary policy preparation and technical work. Now it’s the moment of truth for the Member States and for the European institutions where the Member States call the shots to take the necessary decisions and move forward and make this happen.