SPEECH  The coronavirus crisis and SMEs Speech by Christine Lagarde, President of the ECB, at the “Jahresimpuls Mittelstand 2021” of Bundesverband Mittelständische Wirtschaft Frankfurt am Main, 1 March 2021  It is a great pleasure to have the opportunity to speak to you today. At the ECB we care deeply about connecting with small and medium-sized enterprises (SMEs), since they are the foundation of the European economy. SMEs make up 99.8% of all non-financial companies in the EU, provide 66.6% of jobs and generate 56.4% of added value. [1] It is decisions by companies like yours to invest, hire and innovate that put the European economy on a path to growth. But in Germany, being part of the Mittelstand has a special quality that is about much more than the firm’s size. It is about the philosophy of how to do business and the spirit of management. As Ludwig Erhard said, what defines the Mittelstand is “eine Gesinnung und eine Haltung”[2], how one acts and behaves in society. This way of doing business has brought tremendous economic success. Of the 2,700 “hidden champions” worldwide – SMEs that are leaders in niche markets – almost half are part of the German Mittelstand. [3]  1/8  And it has also helped to pull Germany through times of great crisis. The Mittelstand was central to the country’s Wirtschaftswunder after the Second World War. It was critical to Germany’s swift bounceback from the global financial crisis in 2008.
In particular, the growth of M2-M1, covering passbook savings deposits, accelerated from 7.6% in December 1995 to 9.6% in October 1996. In such a context, it is important to monitor closely the investments which, within the P investment aggregates, constitute fairly close substitutes for monetary assets in the strictest sense. M3 + P1 posted significant annual growth of around 4%. On the financing side, total domestic debt showed a yearly growth trend of around 3.3%. Total domestic debt incorporates the debt financing obtained by resident non-financial agents in the corporate, personal and public sectors, be it in the form of borrowing from credit institutions or debt issues on domestic or international markets, and is thus a valuable yardstick BIS Review 2/1997  -3-  for analyzing the financing provided to the economy. Even though government debt continues to be the most dynamic component of total domestic debt, its twelve-month growth slowed sharply from 13.4% in December 1995 to ó.9% in September 1996. Outstanding lending by credit institutions to the private sector is practically stable, particularly owing to the corporate sector's sizeable cash surplus. According to the National Institute for Statistics and Economic Studies (INSEE), the self-financing rate of companies and near-companies stood at around 114% in the second quarter of 1996. I shall now make a few comments concerning interest rates, which fell across the board in 1996.