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Political tensions are becoming a challenge for growth in Europe

05 November 2018
by UEAPME -- last modified 05 November 2018

At the Macroeconomic dialogue, heads of the European Commission, Presidency of the Council of the EU, and European Central Bank, discussed the economic situation in Europe and its challenges with the European Social Partners.


By referring to the latest UEAPME SME Barometer, UEAPME Secretary General Véronique Willems stated that economic growth in Europe is mainly challenged by political tensions coming from Brexit, political instability in Italy, and raising protectionism at global level. Furthermore, the multitude of digitalisation challenges must be tackled by a holistic policy approach if Europe wants to stay competitive.

Commenting on the current economic situation, UEAPME Secretary General Véronique Willems underlined the positive momentum SMEs have been experiencing: "Results from our latest EU SME Barometer show that SMEs seem to be more confident about their businesses than larger companies. This is especially true for sectors mainly depending on internal demand such as personal services and construction".

"This means, the decrease in Europe's momentum for economic growth is mainly caused by external effects and political uncertainties," highlighted Ms Willems. "A 'no deal' Brexit would imply recession in both the EU and the UK. Hence, the negotiators should think twice before creating such damage". Moreover, European leaders should collaborate and avoid negative scenarios for businesses also concerning the Italian case. "We fully agree that the European Institutions have to play their role in dealing with the Italian situation, especially if the increased deficit is not used to invest in future growth but in consumption. Overall, it is in our best interest to prevent another financial crisis in Europe", she emphasised.

As regards digitalisation and its impact on jobs and incomes, Ms Willems claimed that the key challenges to address are: investments in infrastructures, skills shortage and mismatch, and market regulation. "From our point of view, the main policy implications are avoiding unfair competition between dominant market players and SMEs, and facilitating and financing investments in infrastructure and training. This is especially important for the rural areas in Europe. Moreover, an active labour market is fundamental to avoid skills mismatch, ensure adaptability, and compensate the ones who lose out", stated Ms Willems.

Finally, social partners have already agreed to jointly reflect on the diverse aspects of digital economy, since a common understanding about the nature of digitalisation could facilitate the definition of priorities for policy actions. "Given the importance of digitalisation, I want to invite the European Institutions to involve social partners in future reflections on the different aspects and dimensions of digitalisation", she concluded.

UEAPME is the employers' organisation representing Crafts and SMEs from the EU and accession countries at European level. UEAPME has 64 member organisations covering about 12 million enterprises with 55 million employees. UEAPME is a European Social Partner.

UEAPME - the European craft and SME employers' organisation
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