"Despite the growth slowdown, high inflation rates and the worldwide financial crisis caused by the crumbling US sub-prime market, Europe's economic foundations remain solid and do not require the kind of interventionism that we are seeing on the other side of the Atlantic", said Mr Benassi. "Unintended interventions on interest rates at this stage would endanger price stability in the current juncture", he explained, before elaborating on UEAPME's main arguments.
Commenting on the financial markets crisis, Mr Benassi stressed the need to stabilise the situation and "get trust back". The provision of sufficient liquidity is crucial for SMEs, which depend largely on the availability of credit and loan financing as a springboard to invest, grow and create jobs. The European Central Bank should therefore continue to prioritise liquidity, as it has rightly done during the last months. Unintended moves on interest rates are untimely at this stage, said Mr Benassi. However, it is crucial to keep a close eye on market developments in the next months and act swiftly if need be.
As far as the wage debate is concerned, UEAPME fully supported the compelling arguments made in favour of wage moderation by other business organisations and by the ECB against trade unions' calls for wage increases. Unreformed tax and social benefit systems, which cause huge differences between total labour costs and workers' net income, are the root of the problem of low purchasing power. Increasing total labour costs above productivity rates is therefore not a solution, argued Mr Benassi. It would actually be counterproductive, he continued, since it will price employees at the lower end out of the market and boost undeclared work, which is already a serious problem for labour-intensive sectors.
"We cannot deny that insufficient net incomes remain in some sectors of Europe's labour markets. However, this problem must be tackled through social dialogue at national level by applying the 'flexicurity' concept", concluded Mr Benassi.
