Every economy has had to battle the problems of unemployment, poverty, and illiteracy at one point of time or the other. In Mediterranean countries, statistics reveal that there are increasing numbers of school dropouts. The unemployment ratio is rising and that’s not surprising. Countries including France, Greece, Italy, Portugal, and Spain are also dealing with the problem. Italy is trying to contain the immigrant influx as a measure to revive a falling economy.
The problem perhaps lies with the dearth of innovation these days. The lack of vocational training systems and lesser investments in SMEs mean that the economy cannot thrive as before.
The Competition
The Small Business Act of the European Union states that, “The first step towards strengthening the Mediterranean regions is to define a common policy document that sets the scope, objectives and means to subsidies the small and medium enterprises”.
In order to strengthen SMEs competitiveness “Think Small First” needs to be enacted and has to be focused in three areas.
- Ensuring easy access to finance
Do businesses have easy access to finance? Capital is an issue for most start ups and evangelists and cooperating banks can help.
- Taking advantage of the single market
A single market can mean that entrepreneurs understand local needs better, and enable improved decision-making. The EU single market also enables better flow of trade and a fully functional EU single market is an advantage to each Member State.
- Smart Regulation
Are the country’s regulations unfriendly towards businesses? Stringent regulations that can hamper the functioning of business activities can have a detrimental effect.
Enabling Continuous and Affordable Access to Finances to SME’s
The importance of SMB’s in the European economy isn’t debatable. SMEs in Mediterranean regions employ over two thirds of the working population whereas account for 99% of businesses in the European Union. The EIB group financed the SMEs to the tune of EUR 25.5 billion and benefitted EUR 2.6 billion.
A Euro-Mediterranean Free Trade Area aims at improving the barriers to trade and investments between the EU and Mediterranean countries.
In order to improve the condition and develop SMEs, liberalized trade policies is a need. In order to maximize the support to SMEs, the European Commission and National Promotional Banks have been made easy improving financing rules by providing the right financing for all the stages of business development. This includes early stage risk finance, microfinance loans, loans to support growth-related investment in tangible and intangible assets and working capital. MED is working as a catalyst in this essential economic sector to achieve smart, sustainable and inclusive growth.
