SMEs call for help in times of crises

Date: 26/04/01

By Laurence Frost

SMALL and medium-sized enterprises (SMEs) are calling for EU action to help them survive crises such as the foot-and-mouth epidemic.

European small business association UEAPME is backing a call by the UK's Forum of Private Business (FPB) for smaller firms to be helped to reschedule debt repayments in order to survive short-term insolvency problems.

Legislation could come too late to stave off the economic damage caused by the foot-and-mouth epidemic in the UK, where figures published this week suggested the tourist trade could be losing €3.2 billion a year.

But UEAPME spokesman Garry Parker says EU-wide measures would offer welcome protection against future crises caused by epidemics, natural disasters and safety scares.

"We would certainly support measures which help businesses overcome cash-flow problems as a result of crises," said Parker, "whether it's foot and mouth or anything else."

He said successful debt suspension rules could draw on the example of schemes already in place in Sweden and the US. "If you're a creditor you have the option of selling the debt to a bank, which can recall it once the business has come out of the crisis," he said.

Around 72% of UK firms want to see the introduction of debt suspension, according to an online survey conducted this month by the FPB.

The survey comes after another British group, the Confederation of British Industry (CBI), announced it was going on the offensive on behalf of SMEs. In its report, Facing the Future, the CBI this week urged the EU to "think small first" when designing future legislation that could affect Europe's smaller businesses.

CBI director-general Digby Jones said SMEs had a vital role to play in getting the unemployed back to work. "You're going to get more of those people into those 19 million companies than into your Marks & Spencers and Danones," he added.

The CBI wants to see more flexible labour laws, easier access to finance for smaller firms and increased use of non-binding regulation.

Small and medium-sized enterprises are calling for EU action to help them survive crises such as the foot-and-mouth epidemic.