On 6 April, the European Commission announced that it has unlocked EUR 1 billion from the European Fund for Strategic Investments (EFSI) that will serve as a guarantee to the European Investment Fund (EIF). This will allow the EIF to issue special guarantees to incentivise banks and other lenders to provide liquidity to at least 100,000 European SMEs hit by the economic impact of the coronavirus pandemic, for an estimated available financing of €8 billion.
According to the Commission, this will fulfil its earlier commitment to bring immediate relief to hard-hit SMEs, with money able to flow already in April. The measure is part of a broader package of measures announced by the European Investment Bank (EIB) Group on 16 March designed to rapidly mobilise support for Europe’s SMEs and mid-caps. Read more
New rules on mutual recognition of goods, which started applying across the EU from 19 April, is hoped to make it faster, simpler and easier for companies, especially SMEs, to sell their products across Europe.
Under the new rules, companies can for example fill in a voluntary ‘mutual recognition declaration’ to show competent national authorities that their products are lawfully marketed in another Member State. When companies are denied or restricted market access for their products, they can contest such decisions using a business friendly procedure.
On 9 April, the European Digital SME Alliance – representing Europe’s ICT SMEs – launched a campaign to collect solutions for digital working, e-learning, digital health, 3D printing and many more categories.
The campaign aims to provide information and best practice solutions to adapt to the lockdown and remote working circumstances, brought about by the ongoing corona crisis. It has so far gathered input from around 200 SMEs. Read more
According to SME United – representing Europe’s SMEs – up to 90% of small and medium sized businesses in Europe have been economically affected by the ongoing corona crisis.
The most impacted sectors are services (60%-70%), construction and production. The food sector follows with an impact of 10%-15%.
SME United also reports that the full impact of the liquidity support measures remains to be seen. However, SMEs in all European countries have started to use the short term unemployment scheme protection measures available. On average, 10%-50% of SMEs are applying this instrument, accounting for about 3.5 million workers and 200,000 companies. Read more
According to research by the Belfius bank, one in three SMEs in Belgium were already working in dire financial circumstances before the corona outbreak, with 20.3% of these companies already struggling with a lack of sufficient liquidity.
In the medium term, 30.8% of these companies could disappear due to lack of capital, whilst up to 14.6% of Belgian SMEs have both liquidity and solvency problems. Read more
Only one in six firms will able to deal with the financial consequences of a prolonged lockdown, according to a major new business survey reported by the Guardian.
The Guardian writes that these findings underline the enormous financial strain the enforced shutdown is having on the private sector in the UK and will add to the pressure on ministers to begin easing the restrictions in the coming weeks. Read more
Some of Britain’s biggest insurance companies are facing legal action from small business owners who say their legitimate business interruption claims have been unfairly turned down.
Following the forced closure of thousands of businesses across the UK, insurers across the board were quick to change their policy terms in an attempt to rule out claims arising from the Covid-19 pandemic, the Guardian reports. Read moreThis curated content was brought to you by Johan Barros, Accountancy Europe policy manager since 2015. You can send him tips by email, follow him on Twitter and connect with him on LinkedIn.