By Andros Karagiannis
Undoubtedly the coronavirus pandemic has changed people's lifestyles to such an extent that it has caused several economic problems in our society. As a result, many people have lost their jobs as a result of the reduction in the turnover of various companies, especially in the tourism and trade sectors. However, there are ways and solutions to deal with this problem.
Small and medium-sized enterprises (SMEs) are the ones that have been hit hardest, as many of them may not reopen. According to figures submitted to the European Committee of the Regions, there are 25 million SMEs in Europe, employing around 100 million people. In essence, SMEs are the backbone of the European Union, as in addition to providing to the economy and society, they provide two out of three jobs to citizens.
In addition, SMEs are active almost everywhere, in urban, rural and remote areas, supporting citizen welfare and training opportunities, even for inexperienced and low-skilled workers. Small, family-owned businesses make up 70% of all businesses in Europe. A survey conducted in support of the European COSME program for the competitiveness of businesses and SMEs showed that the share of family businesses in the non-financial, business sector in Denmark is 60%, in Finland 70%, in the Netherlands 71 %, while in Poland it reaches 92%.
In Cyprus, SMEs, which rely mainly on the tourism industry, have been hit hard. Many of them will be forced to lock up or restrict their workforce in order to survive if they succeed, as rents and operating costs run high. Many SMEs will find it difficult to cover late payments and debts to property owners and suppliers, resulting in either over-indebtedness or suspension of operations.
Those SMEs facing liquidity problems will be forced to either borrow money or accept unprofitable offers from strategic investors for acquisition, creating the risk of the disappearance of traditional investments and SMEs from the market and the economy.
A priority of the local authorities is the fact that they must contribute to ensuring the viability of SMEs, providing facilities both in the payment of municipal taxes and in their intervention in the Central State for their rescue, through the preparation of a recovery plan for SMEs, until to overcome the economic crisis caused by the pandemic.
Local authorities should play a mediating role between SMEs and the Central Government, as they are best placed to be aware of the financial problems faced by SMEs and the local market in general. In cooperation with other European local authorities, we should work together to promote the local economy, identifying weaknesses and problems.
The loss of SMEs and the permanent closure of small family businesses is a major blow to the local economy, which has a serious impact at the central level, due to rising unemployment. It is the SMEs that determine the traditional character of each local authority, since through the distribution of their products, they contribute to the promotion of local production, creating new jobs.
The prosperity of the local community is seen through the operation of SMEs, which utilize a wide range of skills in women and men in both young and old people. SMEs must not only be saved, but must grow, expand and become competitive, resilient and sustainable in the face of the difficult economic and social challenges facing humanity.
Andros Karagiannis, Mayor of Deryneia