Press Advisories

14. 5. 2009 15:50

Prime Minister Jan Fischer: The impact of the crisis is much greater on small- and medium-sized companies than on large ones.

Jan Fischer - ilustrační foto / Jan Fischer, illustrative photo
Jan Fischer - ilustrační foto / Jan Fischer, illustrative photo
Speech given by Prime Minister Jan Fischer at the Eurochambres Conference (Association of European Chambers of Industry and Commerce).

Ladies and Gentlemen,

I am very pleased that one of my first events as Czech Prime Minister and President of the European Council is this particular conference. Small- and medium-sized companies, its central topic, form the backbone of the European economy and are moreover the standard bearers not only for values such as entrepreneurialism and innovation, but for responsibility as well. It is not by coincidence that support for small- and medium-sized companies is a priority for both the Czech Presidency and the European Commission and is one of the natural parts of the Renewal Plan and, not least, plays an important part in the Lisbon strategy.


I welcome the initiative of the European Commission known as the Small Business Act, the aim of which is to eliminate barriers to business. And for that matter it is entirely in line with the motto of the Czech Presidency. I believe that the First European Week of Small and Medium-sized Companies which is just ending will help greater awareness of the programmes available to these companies within the EU, and will be both inspiration and motivation for the growth of business.


Small and medium-sized companies make up a substantial part of all companies, employ 80 million EU citizens, generate every other newly created job and are the source of almost 60% of the GDP of the European Union. Even this excursus into my own business of statistics is a good reason to pay adequate attention to small- and medium-sized companies, and to try to create the best possible conditions for them to thrive.


But there are many other reasons. Small- and medium-sized companies are among the fastest growing companies with major innovation potential. They are of fundamental significance for the growth of competitiveness in the European Union as a whole. Before the onset of the economic crisis they contributed 0.6% of the GDP growth in the European Union. So maintaining the existence of these companies is of absolutely fundamental importance in overcoming the effects of the crisis. And their further growth and reinforcement is the best protection against future shocks.


A further reason to deal with this sector of the economy in particular, is its vulnerability. The impact of the crisis is much greater on small- and medium-sized companies than on large ones, because they are more threatened by secondary debtor problems and by the higher cost and lower availability of commercial credit. For this reason it is good that at both the European and national level we are trying to improve the access of small- and medium-sized companies to capital and to EU funds. It is good that both the European Commission and the European Council and national governments are of the same mind. The Czech Presidency will of course continue with this policy.


And finally, the importance of small- and medium-sized companies for the European economy is underlined by the fact that these are often family firms whose owners have put their own capital, their own ideas and their own know-how into them. They therefore naturally have a great responsibility for their future, and are committed to keeping them going even under unfavourable conditions.


Support and trust given to these companies thus brings not only high economic growth, but also the certainty of long-term sustained employment, labour market stability and efficient use of committed resources. Again, this is particularly important at a time of crisis and recession, when deficits are increasing dramatically and we must all consider carefully where public support is to be directed. Small- and medium-sized companies undoubtedly deserve the exception on state support (General Block Exemption Regulation on State Aids), approved in August 2008 by the European Commission. Simplification of the rules and increasing the level of investment support for small- and medium-sized companies is beneficial for us all.


As I said in my introduction, I welcome the initiative of the European Commission known as the Small Business Act. I will certainly be closely following the report on the state of implementation of this Act, to be presented by European Commission Vice-President Günter Verheugen at the upcoming Competitiveness Council, due to take place at the end of May. The ten principles of this programme make up a kind of Ten Commandments for the support of business, economic growth, the creation of equal conditions for small- and medium-sized companies and an improvement in the legal and administrative environment in the whole of the European Union. These principles are fully in accord with the priorities of the Czech Presidency, as conceived at the very beginning.


One of the notable successes of the Czech Presidency is the agreement on a Directive on reduced VAT rates. This will permit the application of a lower rate of VAT particularly on locally provided services, the ones which are provided by small- and medium-sized companies.


Nor do I wish to forget the long-term efforts of the European Commission to reduce the administrative burden for businessmen and to avoid adopting legislation which would increase this burden without good reason. The Czech Presidency is fully in favour of this aim, the steps taken by the preceding government were aimed at this and I want to assure you that my own government will actively continue in improving the business environment. I think that in this area the Czech Republic has achieved a number of very concrete and positive steps and is thus at the head of the peloton of European countries in this area.


We still have a number of unfinished tasks in front of us. The decree on European private companies. Harmonisation of rules and simplification of VAT invoicing. A change of the Directive on delayed payments, which should ensure that small- and medium-sized companies are paid in time for all their commercial transactions. On the last point in particular I would very much like the negotiations in the European Council to be successfully concluded during the term of the Czech Presidency. We should be able to overcome legitimate differences of opinion and find a compromise which will lead to the accomplishment of a good thing.


As I stated at the beginning, small companies form the backbone of the European economy. Which means that in practice they bear a greater burden, that they have a greater share of responsibility for the economic prosperity of the continent. At a time of crisis, governments are of course under enormous pressure to help in particular large companies, whose crash would mean an immediate and visible loss of thousands of jobs. But when small- and medium-sized companies start to fail, this does not create such a storm on a case-by-case basis. But then this strains all the more the statistics on GDP growth, and believe me that when I say this, I know whereof I speak, from my own previous work.


For this reason, we must definitely not forget small- and medium-sized companies. The crisis only underlines the importance of the Small Business Act, which came before it. And in calmer times small- and medium-sized companies are key for high employment, sustainable growth and an improved quality of life, because they are the motor of innovation and new approaches. In difficult times their importance grows even further. I believe that together we will find ways and means of helping this sector as much as possible. In doing this we will help Europe, its citizens, all of us. I thank you for your attention.

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