In this episode of Company Planet, we examine what steps are set up to encourage small and midsize businesses.
They signify two-thirds of work in the bloc and therefore are especially affected by the new Coronavirus catastrophe.
We requested Alban Maggiar, President of SME UNITED, the European Federation of Crafts and SMEs exactly what European steps are set in place to encourage SMEs struck by the COVID 19 catastrophe?
That the EU budget will set up its present tools to help these firms with liquidity, complementing measures taken at the national level.
• In the forthcoming weeks, $1 billion will be diverted from the EU funding for a promise to the European Investment Fund (EIF) to incentivize banks to give liquidity to SMEs and midcaps. This will assist at least 100,000 European SMEs and little mid-caps accessibility approximately $8 billion of funding. We’ll also supply credit vacations to the present debtors which are negatively impacted.
• The $8 billion of operating capital loans backed by the EU budget assurance to the EIF will be supplied via fiscal intermediaries — such as domestic promotional and business banks or leasing companies — which will be incentivized to offer the required assets.
• The EIF will expand the promises — with greater risk cover compared to ordinary investment loans to the fiscal intermediaries. This way, banks, and other intermediaries will have an important portion of the dangers associated with such financing insured by the EU budget.
•Additionally, the EIB Group will plan to catalyze $10 billion in additional investments in SMEs and midcaps in their account and also to accelerate the installation of the next $10 billion endorsed by the EU funding.
• The Commission is proposing to mobilize fast cash reserves in the European Structural and Investment Funds (ESIF) — that the EU’s cohesion cash. This will help frontload the usage of this as yet unallocated EUR 37 billion of cohesion policy financing over the 2014-2020 cohesion policy programs, thus supplying a much-needed increase to economic investments.
• The Commission is also producing all Coronavirus crisis-related expenditures qualified under cohesion policy principles. It is going to also be implementing the principles for cohesion spending maximum efficacy, so enabling the Member States to utilize the funds to fund crisis-related action. This also entails providing greater flexibility for states to reallocate financial resources, making certain the cash is invested in the regions of highest demand: the health industry, support for SMEs, as well as the labor market.
• The new steps will encourage SMEs to relieve considerable liquidity shortages as a consequence of the pandemic, in addition, to strengthen investment in services and products required to strengthen the emergency response of wellness services. Member countries will have greater flexibility to move funds between programs to assist people most negatively impacted.