the crisis and its aftermath: smes performance and macroeconomic policies · 2016. 12. 7. ·...
TRANSCRIPT
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The crisis and its aftermath: SMEs performance
and macroeconomic policies
SMEs, Crafts and the Professions Category meeting– 2 December 2016
Lucio R. Pench
Director, Fiscal policy and policy mix
European Commission DG Economic and Financial Affairs
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Euro area GDP: annual growth rate and cumulative change, 2008-18,
Recovery remains fragile, with slack in the economy
Employment, total hours worked, euro area
90
92
94
96
98
100
102
08 09 10 11 12 13 14 15 16
Employment Total hours worked
index, 2008-Q1 = 100
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Small and medium-sized enterprises (SMEs) in Europe
• SMEs form the backbone of the EU28 economy.
• In 2015, just under 23 million SMEs generated €3.9 trillion in value added and employed 90 million people.
• They accounted in 2015 for two thirds of EU28 employment and slightly less than three fifths of EU28 value added in the non-financial business sector.
• The vast majority of SMEs are micro enterprises with less than 10 employees – such very small firms account for almost 93% of all enterprises in the non–financial business sector.
3
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Effects of the economic crisis on SMEs and their recovery
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Firm growth can be associated with productivity growth
5
Figure: Labour productivity growth in EU industry by size class (N of persons employed) 2008-2014
Source: Single market integration and competitiveness report 2016, based on Eurostat data
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Factors affecting SMEs' size and growth
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• Factors that are critical for SMEs growth include their capital intensity, investment rate, access to finance, availability of high-quality workforce, etc.
• These factors are sensitive to economic policy. Research shows that some structural reforms can have a significant impact on SMEs' growth rate.
• The design of public policies matter: their impact is different according to the size of the firm.
• Policies recommended in the European Semester and the Juncker Investment Plan should help increase the shares of fast growing SMEs.
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Three fiscal stances
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Public spending becoming less growth-oriented
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16.25%
27.21%56.54%
Long-term spending Other spending
Welfare spending
14.97%
29.68%55.35%
Long-term spending Other spending
Welfare spending
a) 2014 b) 2000
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Diverse situations across MSs and diverse
responses Euro area Fiscal Map
Note: Based on COM forecast, S1 to measure consolidation needs, 2016 output gaps for good/bad times
9
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10
Accommodative monetary policy in the euro area
-3
-2
-1
0
1
2
3
4
5
6
08 09 10 11 12 13 14 15 16 17 18
%
Short term Long term
Short term (real) Long term (real)
Short term rate: 3M Euribor; Long term rate: 10Y interest swap;
forecast
Short- and long-term market rates
100
110
120
130
140
150
160
170
180
190
200
-1
0
1
2
3
4
Jan-10 Oct-10 Jul-11 Apr-12 Jan-13 Oct-13 Jul-14 Apr-15 Jan-16 Oct-16
ECB policy rate, Eurosystem BS size
ECB deposit facility rate
EONIA rate
Eurosystem BS size (Jan 2010=100)
%
Source: IHS, ECB, Commission services
index
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11
-3
0
3
6
9
12
15
Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15
M3 & Credit Growth(last obs. October 2016)
MFI loans to the Private Sector (YoY)
M3 YoY SA
%
Source: ECB
Credit provision to private sector supported by ample liquidity and low financing costs
0
1
2
3
4
5
6
7
2004 2006 2008 2010 2012 2014 2016
Composite credit cost indicators (CCCIs)
CCCI of HHs CCCI of NFCs
Sources: ECB, Bloomberg, IHS, DG ECFIN calculations
Last observation: September 2016
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12
Receding financial fragmentation among countries and companies
0
5
10
15
20
25
30
35
40
45
1
2
3
4
5
6
7
8
2008 2010 2012 2014 2016
Country-specific CCCIs for NFCs
DE FR
IT ES
PT NL
Source: ECB, Bloomberg, BofA ML, DG ECFIN calculations
% Coefficient of Variation* (STDEV/AVG, 3M mov avg.)
Note: * Based on available data for 9 EA countries
0
50
100
150
200
250
300
350
Jan
-10
Ma
y-1
0
Sep
-10
Jan
-11
Ma
y-1
1
Sep
-11
Jan
-12
Ma
y-1
2
Sep
-12
Jan
-13
Ma
y-1
3
Sep
-13
Jan
-14
Ma
y-1
4
Sep
-14
Jan
-15
Ma
y-1
5
Sep
-15
Jan
-16
Ma
y-1
6
Sep
-16
EA Spain
Italy Germany
Interest rate spread on small (SMEs) and large loans to NFCs
bps
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Background graphs
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Frequency of multiple investments by funds in the same company (2010-15)
42%
33%
25%
57%
31%
12%
0%
20%
40%
60%
1 round 2 rounds >2 rounds
US EU
START-UP SCALE-UP
Source: Preqin Venture Capital database as quoted in Duruflé, Hellman, Wilson (2016)
• The figure shows the frequency of multiple investments in EU compared to the US.
• In the EU start-ups do receive financing, but less of them received investments in following rounds, which is essential for their scale-up.
• Scale-ups need PATIENT venture capitalists.
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The European Union supports SMEs across different areas
• Improving SMEs access to finance: CMU, Investment Plan, Fund-of-funds, COSME.
• Supporting SMEs innovation activities: H2020, clusters, KETs, public procurement for innovation, DSM, IPR.
• Facilitating access to markets: SMS, DSM, public procurement, Enterprise Europe Network.
• Reducing regulatory burden: SMS, DSM, REFIT.
• Creating a business friendly environment: SBA, entrepreneurship action plan, insolvency and second chance, European Semester.
• Easing access to skilled workers/ talent: skills agenda.
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