'My business is just about surviving'

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Businesses in Italy have been badly hit by the credit crunch. Fillippo Monteforte/AFP
15:04 CEST+02:00
German Finance Minister Wolfgang Schäuble said Italy's small and medium-sized businesses could soon benefit from a funding scheme that's already in the pipeline for Spain. The Local gets the thoughts of some business owners.

Paolo Borelli’s florist has been in the family for over 50 years. But in terms of its robustness, business is no different today to how it was when his grandfather was at the helm in 1950.

Borelli says his takings are ‘neither good, nor bad’. He has struggled for years to get loans from the bank, and so takes the news that Italy’s small businesses could soon be eligible for German government loans with a pinch of salt.

“I don’t believe it will happen, especially with the experience I’ve been having with the banks since 2005,” he told The Local.

“I budget and I'm able to pay for my produce. But my business is just about surviving on those who buy flowers here.”

If the plans get the go-ahead, then a credit scheme already planned for small and medium-sized businesses in Spain would be extended to Italy and Portugal. Under plans for Spain, Germany’s KfW public investment bank will offer €800 million in loans to businesses through Spain’s ICO bank.

Schäuble is due to meet the Italian and French finance and labour ministers in Rome on Friday.

If the deal does get extended to Italy, Borelli isn’t convinced the money given to Italian banks will reach businesses.

“Italy is behind the times…I’m budgeting the way my grandfather did back in 1950. I just don’t have any faith in the banks anymore,” he said.

He added that German Chancellor Angela Merkel’s austerity measures for Europe’s struggling economies are doing more harm than good in Italy.

“She wants us to return to zero. It just doesn’t work – people are not spending; they’re not buying clothes, cars, nothing.”

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Rafaelle Mignemi, who runs a grocery stall, welcomes the news and hopes the money reaches the businesses in need. She knows of many small businesses which have closed down in recent years.

A report at the end of May by Piccolindustria, a unit of employers federation Confindustria that focuses on small businesses, said one in four small firms had its credit line cut by more than 27 percent in 2012

“I hope the money goes to those who really need it," said Mignemi. "The problem in Italy is that you have a lot of people who can’t afford to eat, yet you also have a lot who are very well-off.” 

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