The crisis started over five years ago and the end is still uncertain. The fifth anniversary of the collapse of Lehman Brothers is just behind us, but the word “crisis” is still making headlines all over the world. The crisis is bringing down governments and stifling economies. In some parts of Europe, the crisis is blamed for ruining the lives of young people who cannot find jobs because of alarming unemployment rates. It is a nightmare for many European entrepreneurs, who are struggling to return to pre-crisis income levels and contributions to growth.
Most of the eurozone countries could envy Malta its performance. With an unemployment rate that does not exceed half the eurozone average and stable growth projected for 2014, Malta has received positive ratings both from the European Commission and the International Monetary Fund. That is one reason why we have chosen Malta as a place to discuss what lessons can be learnt from the crisis.
The economic downturn constantly challenges firms with falling turnovers and orders. The only way to survive in a harsh economic environment is to react flexibly to market demands and to maximise competitiveness. If you see the crisis as an opportunity, transformation can be achieved through innovation and investment in research and development. The new Multiannual Financial Framework (MFF) is supposed to be strongly oriented towards R&D projects. It is an opportunity and support for all entrepreneurs because it is a financing tool that can improve the performance of every kind of business – from small family businesses to big international companies.
This focus on R&D is linked to another idea that is viewed as a way out of the crisis: reindustrialisation in Europe. After decades spent getting rid of industry in Europe, politicians have now started to realise that a modern industry, based on high technology, can compete successfully with Asia. The European Economic and Social Committee’s position is that industrial policy, one of the seven flagships of the Europe 2020 strategy, should be a building block of the EU Growth Initiative. Unfortunately, so far, there has been a lot of talk but not enough effective action from the European institutions. Once again, the key to success will be the availability of funds, a wise use of the European budget and closer cooperation between business and universities in order to transform research into feasible and saleable technologies. A predictable climate policy as well as flexible labour regulations are also needed
I would underline two of the key challenges facing entrepreneurs: difficult access to financing; and a fragmented single market. Lack of trust in financial markets has created a situation where, in many cases, obtaining funds – especially for small and medium-sized businesses – has become “mission impossible”. This is an area that the EU and the financial institutions themselves must both work on. The fragmented single market is also an issue. Examples from the energy and digital markets show how much needs to be done to fully implement one of the pillars of European integration. The cost of non-Europe in various sectors of the economy is estimated in billions of euros.
As the representative of employers from all 28 member states, the Employers’ Group emphasises the need for action on energy policy, access to finance, and a business-friendly climate change strategy that facilitates reindustrialisation in Europe. Better regulation, not overregulation, is needed both at the European and national level. Access to markets must be eased. Reforms of the labour market to make it more flexible are necessary. The European Institutions and the member states should focus on reforming education and vocational training systems by tailoring them better to entrepreneurs’ needs. As the European Commission has pointed out, despite high unemployment rates more than 1.8 million vacancies cannot be filled because there aren’t enough job seekers with the right qualifications and work experience. The image of entrepreneurship must be improved. The idea of becoming an entrepreneur has to be promoted among young people.
Even if the economic downturn is coming to an end and the European economy is returning to growth, we will continue to feel the aftershock of the crisis for the next few years. Decisions on the EU and EMU governance were taken; now they need to be fully and consequently implemented. It is up to governments and the EU institutions to protect Europeans from a similar crisis in future decades and to improve the environment for starting up and running businesses. It is up to individual entrepreneurs to take a look at their own decisions during the recession and to draw lessons for the future. It’s the companies who create jobs. It’s up to the EU to make their lives easier.
Mr Krawczyk is the keynote speaker at a conference being organised in Malta by the European Economic and Social Committee Employers’ Group tomorrow at the Malta Chamber of Commerce, Enterprise and Industry, entitled ‘Going local: Lessons from the economic crisis? An employer’s perspective’.
Jacek Krawczyk is the president of the Employers’ Group of the European Economic and Social Committee.
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