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ETUC – UE APME: <strong>Cooperation</strong> betw een <strong>SMEs</strong> <strong>and</strong> Trade Unio ns <strong>in</strong> <strong>Europe</strong> 12 “When it comes to change, <strong>SMEs</strong> have always proven their constant capacity to face <strong>and</strong> adapt to change thanks to their high degree of flexibility. When it comes to company restructur<strong>in</strong>g, they face greater difficulties because of their size <strong>and</strong> the direct f<strong>in</strong>ancial commitment of the bus<strong>in</strong>ess owner. Moreover, <strong>in</strong> the case of restructur<strong>in</strong>g of large bus<strong>in</strong>esses, <strong>SMEs</strong> work<strong>in</strong>g as subcontractors or suppliers lack external support.” 10 The reasons for this limitation of alternative options <strong>in</strong> deal<strong>in</strong>g with change <strong>and</strong> manag<strong>in</strong>g restructur<strong>in</strong>g seem to be quite clear as key actors quite unanimously stress: greater difficulties <strong>in</strong> receiv<strong>in</strong>g loans <strong>and</strong> f<strong>in</strong>ancial support from f<strong>in</strong>ancial <strong>in</strong>stitutions (<strong>in</strong> particular micro companies, enterprises <strong>in</strong> low-pay sectors <strong>and</strong> young companies) <strong>and</strong> shortcom<strong>in</strong>gs <strong>in</strong> public frameworks for deal<strong>in</strong>g with temporary or structural crisis situations, support<strong>in</strong>g the development of <strong>in</strong>novation <strong>and</strong> change projects, activities on foreign markets etc. “Silent restructur<strong>in</strong>g once aga<strong>in</strong>”: The position of <strong>SMEs</strong> <strong>in</strong> the current economic crisis The steep economic downturn by which the <strong>Europe</strong>an economies are hit with <strong>in</strong>creas<strong>in</strong>g speed s<strong>in</strong>ce summer 2008 has resulted <strong>in</strong> severe cuts <strong>in</strong> production <strong>and</strong> output, with the jobs of tens of thous<strong>and</strong>s of <strong>Europe</strong>an workers suddenly at stake. Initially caused by the failure of the f<strong>in</strong>ancial sector to perform their basic function of f<strong>in</strong>anc<strong>in</strong>g the economy, <strong>in</strong>vestments are blocked <strong>and</strong> consumption has collapsed <strong>in</strong> fields <strong>in</strong> which credit f<strong>in</strong>anc<strong>in</strong>g is play<strong>in</strong>g an important role. Economic outlook accord<strong>in</strong>g to the EU Commission’s Economic Forecast as of Spr<strong>in</strong>g 2009 Gross domestic product, volume (percentage change on preced<strong>in</strong>g year, 1992-2010* *For 2008, 2009 <strong>and</strong> 2010 the current forecast (IV-2009) is compared with the autumn 2008 (X-2008) <strong>and</strong> the January 2009 <strong>in</strong>terim forecast (I-2009). Source: EU Commission, Spr<strong>in</strong>g 2009, Brussels 22.4.2009. 10 “UEAPME Position on the Communication from the Commission Restructur<strong>in</strong>g <strong>and</strong> employment”, Brussels, 6 July 2005, p. 2.
ETUC – UE APME: <strong>Cooperation</strong> betw een <strong>SMEs</strong> <strong>and</strong> Trade Unio ns <strong>in</strong> <strong>Europe</strong> 13 All this has resulted <strong>in</strong> a sudden dem<strong>and</strong>-shock, affect<strong>in</strong>g exports, <strong>in</strong>vestment goods <strong>and</strong> private consumption alike <strong>in</strong> <strong>Europe</strong>. However as the figure <strong>in</strong> the tables above are show<strong>in</strong>g, <strong>Europe</strong>an economies are not hit by the economic crisis evenly. The downsw<strong>in</strong>g is expected to be broad-based across countries, although sizeable differences persist: some countries already have experienced a stronger downturn than other, depend<strong>in</strong>g on their exposure to the f<strong>in</strong>ancial crisis, the global manufactur<strong>in</strong>g cycle, a substantial hous<strong>in</strong>g-market correction or other country-specific factors. Economic outlook accord<strong>in</strong>g to the EU Commission’s Economic Forecast as of Spr<strong>in</strong>g 2009: Number of unemployed (as a percentage of total labour force, 1992-2010 Source: EU Commission, Spr<strong>in</strong>g 2009, Brussels 22.4.2009. Countries particularly hit by the crisis are the UK, Irel<strong>and</strong> <strong>and</strong> Spa<strong>in</strong> which dur<strong>in</strong>g the last decade have been very much relied on private consumption not be<strong>in</strong>g based on real wage development but fuelled by the credit market <strong>and</strong> asset bubbles. Also the new member states were especially vulnerable to the economic crisis despite their impressive growth rates dur<strong>in</strong>g the last decade. However, <strong>in</strong> most of the region growth was driven by foreign direct <strong>in</strong>vestments <strong>and</strong> to large degree credit f<strong>in</strong>anced consumption. There also is a strong bias towards the f<strong>in</strong>ancial sector <strong>and</strong> large <strong>and</strong> mult<strong>in</strong>ational companies <strong>in</strong> the public debates around <strong>Europe</strong> with regard to the effects of the crisis <strong>and</strong> the discussion of economic recovery measures. This is quite underst<strong>and</strong>able s<strong>in</strong>ce the f<strong>in</strong>ancial sector <strong>and</strong> <strong>in</strong> particular the automotive <strong>in</strong>dustry has been most severely affected by the crisis. Aga<strong>in</strong>st this, the effects on other economic sectors <strong>and</strong> company groups, <strong>in</strong> particular developments <strong>in</strong> various types of <strong>SMEs</strong> – often <strong>in</strong>tegrated <strong>in</strong> the production value cha<strong>in</strong>s as suppliers <strong>and</strong> contractors – are much less visible <strong>and</strong> tend to be systematically eluded <strong>in</strong> public debates of governments <strong>and</strong> social partners. Analys<strong>in</strong>g responses <strong>and</strong> plant-level developments as a reaction to the economic crisis throughout <strong>Europe</strong>, a recent survey of the ETUI <strong>in</strong> Brussels states that:
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