How can Europe get back on track? What needs to be done to increase productivity and to encourage investment and innovation in Europe? These questions were discussed by European family entrepreneurs at their first summit.

The first European Family Business Summit was hosted by the European umbrella organization European Family Businesses, in cooperation with the German business association Die Familienunternehmer.

Germany is shaped by family businesses

"Family businesses have a special importance in Germany", Federal Chancellor Angela Merkel declared at the conference. About 95 percent of German companies are family run, and family businesses provide about 60 percent of jobs requiring compulsory social-insurance contributions.

"Family businesses do not only have a quantitative relevance, but also a qualitative relevance", Merkel summed up. She welcomed the fact that 300 large family businesses have established themselves in the new Länder over the past 25 years, following the fall of the Berlin Wall.

Strengthening Europe's competitiveness

The euro crisis revealed Europe's weaknesses, the Chancellor declared. Now Europe must abide by its self-imposed rules. These include the strengthened Stability and Growth Pact.

"The only way to create a climate of confidence in Europe is to keep our own promises, and that is precisely the currency that also attracts investors and convinces them to invest in the financial markets", said Merkel.

The Stability and Growth Pact is about stability, sound budgetary management and growth in equal measures. Merkel stressed that growth can only arise from sound budgetary management when pro-competitive structural reforms are carried out at the same time. "Reforms to enhance competitiveness are necessary, and they have been implemented in many European countries."

Peace as a basis

In her speech, the Chancellor also addressed the challenges of the current geopolitical situation preoccupying Europe. The Ukraine crisis is one of these challenges. "We are working tirelessly towards a diplomatic solution to this crisis, however the territorial integrity of Ukraine remains violated", declared Merkel. Economic sanctions will be needed as long as Russia makes no (or insufficient) contributions towards remedying the crisis. "They are inevitable."

Of course, the sanctions also have an impact on the European and German economy. "But nothing is more crucial for businesses than legal security, stability and peace, which are basic requirements for operating successfully", said Merkel. 

Free trade agreement provides opportunities for growth

Chancellor Merkel called for a prompt conclusion of the Free Trade Agreements with Canada and the United States. "If Europe does not want to be outpaced by the growth markets, it must hurry in this matter", the Chancellor said, adding that "the opportunities far outweigh the risks."

Merkel hopes for agreements that are as comprehensive as possible and that do more than just reduce tariff barriers, but also avoid the unnecessary duplication of regulations. "A relief programme that doesn't place a burden on public budgets."

Responsible budgetary policy

In her speech, Merkel underlined the need for sound budgetary policies. It is a well-known truth that "it is better to make do with the money that one has." This is why she is proud that, for the first time in 46 years, no new debt is incurred in the 2015 budget, Merkel explained.

Tax policy reliability is also of paramount importance. "This is why we have said that, despite favourable economic conditions - or precisely because of them - we will not raise taxes, but rather we will make do with what the fiscal framework provides."

Investing in Germany

However, we must also invest, Merkel stressed. "So far, the budget already sets aside seven billion euros for new investments and, in order to use all the elbowroom available, 10 billion euros will be added to this by 2018."

It is furthermore important to bring in private investment to Germany. We want to create the right framework conditions, the Chancellor explained. "We are currently working on this, within the framework of the Digital Agenda, for example. Indeed, we must not forget that the question of digitisation willl be of the utmost importance, including for medium-sized companies and family businesses."

Creating jobs

Merkel also spoke about the fight against unemployment. "We can talk all we want about public investment, but if it is not followed by private investments, if there are no projects, no climate in which one knows where one wants to invest, then all the government measures are useless", Merkel said.

"This is why it is you who create long-term jobs, for young people and older people alike."  Government programmes can only provide incentives; however, only permanent, private jobs can combat unemployment effectively.

Family entrepreneurs are the strong voice of the business community. They represent the economic interests of 180,000 family businesses in Germany, which employ eight million workers subject to social insurance contributions. Their counterparts are representatives from the fields of politics, the media and the general public.