High-Level Roundtable on Family Business

Back in March, in preparation for the new institutional cycle, high-level representatives of EFB met with the Commission and Parliament. 

Commissioner Oettinger remarked that this meeting was adjourned to discuss what support family businesses need in the coming years and what can be best delivered and achieved at the EU level. He noted that family businesses in Europe must be considered as part of the culture fabric of the EU. In addition, he acknowledged that, although the last few years had been relatively successful, the next years promise to be more challenging.

Commissioner Bienkowska remarked, with regards to business transfers, that the Member States were encouraged to adopt national action programmes following the high-level conference in Malta in 2018. In addition, through the Enterprise Europe Network, she noted that a myriad of support services is available to companies in need. Regarding the MFF, the Commissioner explained that the new EU Invest programme would simplify rules and procedures, removing bottlenecks and facilitating access to finance for SMEs. She acknowledged that the equity bias in taxation remains a problem in Europe.

MEP Angelika Niebler, rapporteur of the 2015 family business resolution, noted that during the drafting of the resolution it became apparent that one of the unique features of family businesses was their regional importance and social responsibility. Mrs Niebler concluded that actions to support family businesses must come from all levels. On the question of supporting mid-sized hidden regional champions, she conceded that this must be a priority for the new Parliament and Commission.

Martina Dlabajova, MEP, remarked that, in her view, education is a major issue for family businesses. As well as the promotion of entrepreneurship education at all levels, the EU must also prioritise the promotion of family business specific curricula. In addition, she noted that younger generations must be involved in the business as soon as possible; the survival of Europe’s businesses depends on the commitment and talent of the next generation.

In his opening statement Alfonso Libano, President of EFB, noted that family businesses form the basis of the EU’s social market economy and are the cornerstone of responsible ownership and long-term entrepreneurship. He stated, ‘what we need from our decision-makers is simple: recognition of the indisputable and valuable contribution that responsible owners from family businesses make to support and maintain stable local and regional economies.’

Jan Van Oord, member of EFB’s Executive Committee, focused on the perennial issue of intra-family business transfers. He reminded the audience that family businesses need a fair and simple administrative and fiscal transfer of business environment to ensure that companies and jobs are not needlessly lost. Furthermore, he noted that a particular focus should be put on Central and Eastern Europe and small family businesses. He explained, in certain EU countries, there still seems to be a fundamental misunderstanding of the difference between private owner assets and assets allocated in the business.

In his address, Alexander Bargum stated that the fiscal treatment of debt and equity remains a crucial issue for family businesses in Europe. The use of equity, in particular retained earnings, is often treated unfavourably by many European tax codes. Alexander Bargum declared that Europe needs a cultural shift that puts equity finance on par with debt: ‘we must promote a system that encourages the accumulation of equity’.

In relation to the importance of regional ‘hidden’ champions, Philip Haspeslagh, Chairman of FBN Belgium, argued that Europe needs strong global players that, in spite of their small or medium size, are worldwide leaders in their sector. Highly innovative and globalised, they are the champions that Europe needs to compete with China and US in the global market. He remarked that many EU regions thrive and prosper thanks to their regional business champions. In most cases they are mid-sized, family-owned, and they are an encapsulation of our European-style capitalism.

In his intervention, Peter Villax, President of Portuguese Family Businesses, made reference to the Lisbon agenda which had aimed to make the EU ‘the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion.’, before 2010. However, it was not successful because it did not involve more stakeholders, particularly businesses. Mr Villax declared that the Lisbon Strategy had the right objectives and that it could and should be re-launched as the ‘EU Charter for Business’ (Including digital technology, industry 4.0, education for prosperity and energizing investments).