yves mersch : means of payments and smes – where are we heading? speech by mr yves mersch, member of the executive board of the european central bank, at the dinner debate, organised by the think tank etienne marcel, paris, 29 september 2015. * 1. * * introduction mr cohen - hadad, ( mr president ) ladies and gentlemen, no economy can prosper without healthy, competitive and flourishing small and mediumsized enterprises ( smes ). they are the foundation on which the european economy is built and constitute more than 99 % of all firms in the euro area. they employ more than two - thirds of the workforce and generate around 60 % of value added. according to recent research, smes accounted for around 85 % of total employment growth between 2002 and 2010 and have much higher employment growth rates than large enterprises. the financial crisis hit the financing of smes particularly hard. this explains why, in recent years, the ecb and the european commission have strongly emphasised measures that support both bank and non - bank financing of the european sme sector. these measures and policy initiatives include strengthening bank financing by facilitating longer - term financing and promoting healthier balance sheets. they also aim to diversify into non - bank financing via more efficient securitisation, better transparency and more efficient wholesale infrastructure. 1 this is why the ecb strongly supports the european commission ’ s initiative to establish a european capital markets union, which will allow businesses to enjoy a greater range of funding choices and help reduce the link between a firm ’ s location and its funding costs. however, there are other policies that have received less public attention in relation to the competitiveness of the european sme sector, one of the most important being integration and innovation in the retail payments market, particularly for payments in euro. this is what i will focus on tonight. 2. past achievements over the past years the public and private sectors have worked together to create the single euro payments area ( sepa ). regulatory measures and market developments have combined to remove the distinction between domestic and cross - border payments in euro. retail payments have become much faster, cheaper and more secure. instead of taking three to five days, euro credit transfers and direct debits are now executed within one business day, not only at the domestic level but also across borders. fees for cross - border euro transactions decreased to the same level as those for domestic transactions. last, but certainly not least, payments in general have become more

the state ( repayable advances ) and two schemes implemented by the hellenic development bank – a guarantee scheme and a co - financed interest subsidy scheme for new corporate loans. these are expected to reach an overall loan volume of about €13 billion, or 7. 7 % of gdp. they come on top of the broader fiscal package in response to the pandemic, including interest subsidies for existing performing loans, bonds and bank overdrafts, reductions and deferrals of tax and social contributions, and labour market support measures. so far, the ecb ’ s policy measures and the relevant greek policies have supported bank lending to corporates, which has increased substantially, while credit standards have remained broadly stable. a large net flow of loans – above €1 billion – was registered in july, supported in particular by the guarantee scheme of the hellenic development bank. at the same time, greek small and medium - sized enterprises continue to have serious concerns about their lack of access to financing. their financing gap remains high, despite the increased availability of bank loans and the decline in interest rates. in order to underpin the recovery, policy support remains necessary to safeguard the continued supply of credit. looking ahead, it is essential to complete the financial sector reforms needed to support the process of npl reduction and guarantee an adequate supply of credit during the recovery. these reforms include improving the e - auctions framework, revising the insolvency framework, reducing the backlog of pending personal insolvency cases before the courts, and clearing called state guarantees on bank loans. the funding provided by next generation eu is an opportunity for greece 2 / 3 bis central bankers'speeches the funding from next generation eu creates an extraordinary opportunity. for the first time in history, the european union will issue common debt to counter a common shock. this will bring fiscal policy more in tune with monetary policy at the european level, and may represent an important step for european integration : we borrow together to recover from the crisis and to invest in our future. all eu countries will benefit from this common response. but to be effective, european measures require careful planning and decisive action at the national level. in time, the need to buffer the immediate impact of the pandemic will be replaced by the need for investment and reform to support a sustainable recovery. as the national support measures are phased out, a well - planned and coordinated approach will be necessary if we want to avoid cliff effects. policies will have to find the right