Can the Conte government help SMEs? Le Monde investigation

Can the Conte government help SMEs? Le Monde investigation

What the Conte government really does for small and medium-sized enterprises according to the French newspaper Le Monde

Aid to deal with the emergency has been slow to arrive – writes Le Monde – while hundreds of thousands of businesses are in a state of extreme urgency.

In all the measures announced in Italy since the start of the Covid-19 pandemic crisis (25 billion euros in March, 55 new billion currently under discussion), Italian SMEs have always been a top priority.

The first measure, already in March, was to suspend the payment of the various tax contributions (in particular VAT) which affect companies. But if on one hand this measure was essential, given the impact of the cessation of the activity on the cash flow, on the other it does not solve anything, since it is equivalent to postpone the problem. Thus, the Ministry of Development quickly concentrated its efforts on a bank loan guarantee scheme, targeting SMEs in particular. The mechanism contained in the "liquidity decree", published in April, provides that companies with fewer than 500 employees can access cash loans of up to 25% of their turnover in 2019. In detail, the 100% guarantee is automatic for loans up to EUR 25,000 and then 90% up to EUR 5 million.


According to the data of the Italian government, as of June 9, 522,000 applications for financing had already been submitted, lower than € 25,000, for a total of € 10.6 billion. In total, 576,000 applications were registered, equal to € 28 billion of guarantees. The government's stated objective is to prevent the risk of collapse of a network of small family structures at all costs, which is the backbone of the Italian economic fabric.

The problem, however, is that these emergency aids take a long time to implement, while hundreds of thousands of businesses are in a state of extreme emergency.

“Even if the state provides its unconditional guarantee, banks are not exempt from their civil and criminal liability. Thus, if an organization makes a loan to a "mafia-smelling" company, for example, even in this context, it could be sued … As a result, the certifications are necessary, and the organizations that issue them are literally overwhelmed . As a result, applications pile up and money cannot be paid, "explains a small Milanese businessman, who had to wait several weeks for this certification before he could get an emergency loan of 25,000 euros.

One of the recurring themes in the political debate in Italy are the bureaucratic delays and the general inefficiency of the Italian administration returned to the limelight during the health emergency. Thus, for hundreds of thousands of Italians, the March payments of the monthly bonus of 600 euros granted to self-employed workers who request it are still pending: the branches and the INPS website were unable to cope with the influx of requests, causing many social dramas. As an urgency, on 20 May the Italian MEPs approved an amendment that suspends the reports of arrears to the Bank of Italy until the end of September.


In this context, several indicators suggest that many companies are coming under the control of mafia organizations, which have liquidity and traditionally use usurious loans. According to a survey conducted by Confcommercio and made public in early June, 10% of Italian entrepreneurs are currently "exposed to usury" and could fall directly or indirectly into the hands of organized crime.

Therefore, the "relaunch decree" currently under consideration opens the possibility of non-repayable aid to all small businesses (less than € 5 million in turnover) who have seen their business decrease by over a third due to the health crisis. For larger companies, the Cassa Depositi e Prestiti should be called upon to contribute. During the presentation of the "relaunch decree", the Minister of Economy and Finance Roberto Gualtieri described an "unprecedented effort" to "lay the foundations for the recovery". Above all, the Italian government will have to reassure entrepreneurs in the coming weeks by demonstrating that they have the means to keep their promises to avoid a cascade of bankruptcies.

(Taken from the Eprcomunicazione foreign press review)

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Sat, 13 Jun 2020 05:14:40 +0000.