For the period from April to September 2019 the net percentage of euro area small and medium-sized enterprises’ (SMEs) turnover remained broadly stable at robust levels (20%, down from 21% for the previous period). For the first time since mid-2016, euro area SMEs reported a deterioration in profits in net terms (-1%, down from 0%), as SMEs continued to report growing labour costs (50%, down from 52%), increases in other costs (i.e. material and energy) (53%, down from 57%), and rising interest expenses (1%, down from 5%).
Lack of availability of skilled labour continued to be the dominant concern for euro area SMEs (28%, up from 25%), followed by the difficulty of finding customers (22%, down from 23%).
Access to finance remained the least important concern (7%, down from 8%). In net terms, SMEs continued to indicate improved availability of bank loans (10%, up from 9%), with the highest percentages in Greece and Portugal (13%). They attributed this to the willingness of banks to provide credit (14%, down from 16%). However, in this survey round more euro area SMEs perceived the general economic outlook as an impediment to the availability of external finance (-13% down from -9%). This assessment was broad-based across countries, but it was most marked in Spain (-26%, down from -8%), Finland (-24%, down from -7%) and Italy (-16%, up from -17%).
Regarding price terms and conditions of bank financing, euro area SMEs reported net declines in interest rates on bank loans (-9% net, down from 4% in the previous round). At the same time, 29% (down from 30%) of euro area SMEs continued to signal increases in other costs of financing, such as charges, fees and commissions.
The Survey on the Access to Finance of Enterprises was developed to provide evidence on changes in the financial situation of enterprises and to document trends in the need for and availability of external financing. The results refer to the period from April to September 2019. This survey round was conducted between 16 September and 25 October 2019. The total euro area sample size was 11,204 firms, of which 10,241 (91%) had fewer than 250 employees.
Compliments of the European Central Bank

At the COP 25 United Nations Climate Change Conference in Madrid, the European Investment Bank (EIB), the EU bank, will be discussing how its new climate action roadmap and recent decision to phase out support for unabated fossil fuel energy projects can support European Union leadership on international climate action.
The EIB delegation will engage with national governments, the private sector and civil society as well as fellow financial and European institutions to debate how more climate finance can be mobilized to tackle the climate emergency. In addition, the EIB will be signing a number of new financing agreements to promote solar energy projects in Spain and climate action investments in Latin America.
“The climate emergency is the top issue on the political agenda of our time. We must change course to a carbon neutral future and limit damage from the impact of climate change. That means every country, every industry and every institution needs to do its share,” said EIB President Werner Hoyer. “The EU bank has decided to greatly strengthen its ambition. We will stop financing unabated fossil fuels, launch the most ambitious climate investment roadmap of any International Financial Institution and propose an energy transition package to leave no one behind. We will serve as the financial engine of the European Green Deal under the new European Commission,” he added: “In the context of COP25, these decisions send an important signal to the world: The European Union and its bank are serious about climate action.
See more information about the EIB participation in COP 25 and a selection of videos, blogs, podcasts
EIB press conference: The new climate and energy roadmap – setting a global standard? 
On Monday 9th December at 10.30, the EU bank will host a press conference with its President, Werner Hoyer. The press conference will take place at the official COP 25 venue IFEMA and will be open to accredited journalists. The press conference room is CHILOE, located in Hall 10.
EIB Climate Survey: Panic or the dawning of reality?
On 2nd December, the EIB will present the results of the EIB Climate Survey conducted in the EU, the US and China. The first wave of the survey highlights how people perceive climate change and its impact on their lives.  EIB-Benelux Pavilion, 13.30-14.15.
EIB Vice-President Emma Navarro commented the survey findings: “European citizens are highly concerned about climate change and its impact on their everyday life and future. Interestingly, many of them are optimistic about the possibility to reverse it. Unfortunately, science says otherwise. We have one shot at limiting global warming and mitigating its effects. The EIB’s survey is a key tool to understand citizens’ perception on climate change, and also the role they expect from their leaders in the public and the private sectors. As one of the largest multilateral providers of climate finance worldwide, the EIB is already the EU Climate Bank and we are committed to doing much more. This is why listening to citizens’ attitudes is key for us to make sure we address their concerns, while leaving no one behind.”
Financing the Paris Agreement: How to mobilize private investors?
At a joint event on Tuesday 10th December, EIB President Hoyer will join Nadia Calviño, Spain’s Minister of Economy and Business, and Valdis Dombrovskis, European Commission Vice-President, to share EIB’s experience in mobilising private finance and discuss how to connect the financial system and sustainability to make a successful transformation to a greener, more sustainable planet. Spanish Pavilion, 10.00-12.15.
Compliments of the European Commission

Downside risks to global and euro area economic growth have increased and continue to create financial stability challenges, according to the November 2019 Financial Stability Review (FSR) of the European Central Bank (ECB). Low interest rates should support economic activity in the euro area, but may also encourage excessive risk-taking by some non-bank financial institutions and highly leveraged non-financial corporations, and in some real estate markets.
“While the low interest rate environment supports the overall economy, we also note an increase in risk-taking which warrants continuous and close monitoring”, said Luis de Guindos, Vice-President of the ECB. “Authorities should use available tools to address the build-up of vulnerabilities where possible.”
Non-banks, such as investment funds, insurance companies and pension funds, which play an increasingly important role in the financing of the real economy, have continued to take on more risk and have increased their exposure to riskier segments of the corporate and sovereign sectors. In the event of a sudden repricing of financial assets, growing credit and liquidity risk in some parts of the euro area non-bank financial sector – coupled with higher leverage in investment funds – may lead non-banks to respond in ways that cause stress to spread to the wider financial system.
Pockets of vulnerability also remain in the non-financial corporate sector and some property markets. Low funding costs appear to be encouraging more borrowing by riskier firms. At the same time, property markets in a number of euro area countries have continued to see rising prices. Authorities are using, and should continue to use, targeted macroprudential measures, where available, to address the associated risks to financial stability.
Euro area banks’ profitability prospects have deteriorated further, despite expectations of a modest but continued increase in net interest, fee and commission income. Return on equity of euro area banks is expected to face further pressure from both a weaker economic outlook and persistent cost inefficiencies and overcapacity. Even so, the banking sectors’ solvency position remains robust with a Common Equity Tier 1 ratio of over 14%. And even under an adverse stress scenario, the aggregate solvency ratio is expected to remain above 11%.
This issue of the FSR contains two special features, including one that examines how and where consolidation could help banks to improve their profitability. It also includes eight boxes, including one which looks at the impact of cross-border transactions on real estate markets and one which considers the implications of misconduct costs for banks.
Compliments of the European Central Bank

Ian Steff, Deputy Assistant Secretary for Manufacturing, Performing the non-exclusive functions and duties of the Assistant Secretary of Global Markets and Director General of the United States and Foreign Commercial Service, recently led the U.S. delegation to Berlin, Germany for the U.S.-Germany Informal Commercial Exchange (ICE). The talks were held with senior German officials to discuss ways to further strengthen the substantial U.S.-German economic ties and expand cooperation on the investment environment. The delegation was hosted by Dr. Eckhard Franz, Director General in the German Ministry of Economic Affairs and Energy.
“The United States and Germany enjoy a strong bilateral economic relationship and cooperate well in areas that affect the investment climate, regulatory environment, and workforce development,” said Steff. “American companies look forward to doing more business there and are optimistic that further communication on key issues will strengthen our ties.”
The ICE Talks covered several areas of collaboration and sharing of best practices in emerging technologies and workforce development. The discussion supported U.S. and German companies and highlighted the need for both countries to train and employ highly-skilled labor to support our economies.
In 2018, Germany was our fifth largest trading partner ($183.6 billion); sixth largest merchandise export market ($57.7 billion); and, fifth largest source of merchandise imports ($125.9 billion). The United States also exported approximately $32.7 billion in services to Germany in 2017. Steff underscored the importance of reducing the trade deficit with Germany through increased U.S. exports in a wide range of sectors, as well as a reduction of non-tariff barriers facing U.S. companies there and in the larger European Union market.
The ICE Talks and other Berlin meetings, which included U.S. companies, the American Chamber of Commerce Germany, the Association of German Chambers of Industry and Commerce, and the Federation of German Industries, set the stage for a large U.S. presence at the 2020 Hannover Messe, the world’s largest industrial technology trade fair, and strengthened bilateral relations going forward.
Compliments of the Department of Commerce

The European Commission published today its proposal for an EU-US agreement on conformity assessment for industrial products, in line with its commitment to enhanced transparency in trade negotiations.
A product exported between the two sides often has to undergo an assessment to demonstrate that it complies with the technical and safety requirements of the importing party, a so-called ‘conformity assessment’. This often means additional costs for exporters, which is especially burdensome for smaller companies, who often decide not to export at all because of those costs and complexities.
The EU proposal seeks an agreement under which the EU and the US would accept the conformity assessment results of each other’s assessment bodies, certifying products against the legal requirement of the other side. This would enable exporters to seek certification of their products in their originating country.
The proposal covers all relevant industrial sectors where third-party conformity assessment is required by either side. In addition, the EU proposal addresses the difficulties faced by EU exporters of machinery and electric and electronic equipment in the certification of products sold in the US market.
This would make trade quicker, easier and cheaper, while maintaining a high level of consumer safety. The economic benefits are significant: EU-US trade in goods amounted to €674 billion in 2018, with many products being subject to third-party conformity assessment.
This is an area where we can achieve meaningful results quickly. The EU is ready to conclude an agreement as early as next year.
Background
Conformity assessment is the process of verifying that a product meets all the legislative requirements in order to be sold in a given country. It ensures that the product is safe and complies with relevant regulations.
The joint EU-US work on conformity assessment was one of the actions agreed under the EU-US Joint Statement of 25 July 2018. On 15 April 2019, the EU Council adopted a decision authorizing the launch of negotiations for an agreement with the United States on conformity assessment.
Compliments of the European Commission