Its time to walk the talk on SMEs

Small and Medium Enterprises (SMEs) have been immeasurably hit by the pandemic and yet it seems, that here in Brussels, owners of these small businesses remain an after-thought for most policy-makers.

Take for example rules for businesses being contemplated, here in Brussels, commonly known as sustainable reporting standards (non-financial reporting) or the due diligence obligations. They aim to be great for the planet and for humanity, more broadly, but we cannot impose the same level of obligations on an enterprise of four employees as those for a global corporation. And yet it seems, this is the direction of travel for these EU proposals.

Recently, the EU Commission announced that it plans to nominate Dr. Vazil Hudak as its new Small and Medium Enterprises Envoy. A good choice but a year and a half late and worse still, devoid of details. Why hasn’t the EU Commission divulged the terms of reference of his mandate?

SMEs should be a top priority, not an after-thought and platitudes around them are becoming tiring. When we talk of SMEs, we are talking about people, families and communities. According to the website of the EU Commission itself, SMEs represent 99% of all businesses in the EU. Is this figure enough to help us understand what we’re talking about?

This figure means that almost all enterprises in the EU are SMEs. And yet, very often here in Brussels, discussions about SMEs are done on the margins of other debates. For many EU policy-makers, SMEs is a fringe subject, almost an academic topic that tickles their interest from now and then.

The only point of departure for any EU policy proposal, regarding enterprises, ought to be the SMEs themselves. This, for the simple reason that almost all enterprises are SMEs. If it does not, it invariably starts on the wrong foot and our citizens continue seeing the EU as out of touch.

It is for these reasons that the EU Commission should equip the designated SME Envoy with the appropriate horizontal competencies into all relevant Directorate Generals. He should be attached to the cabinet of the President of the EU Commission.

Furthermore, we expect the EU Commission to provide further information as soon as possible. Access to finance is not the only problem for SMEs. The expected bureaucratic burden coming from among other sustainable reporting standards and due diligence obligations need to be addressed from a high-level position within the legislative procedure and during the impact assessment of upcoming legislation. We need a serious approach at the highest level to improve the entrepreneurial environment for SMEs in the EU.

In December 2020, the EU Parliament endorsed the call for binding targets to reduce administrative burden in the EU and called on the EU Commission to come up with an impact assessment, on this, by June 2021. It is important for us that the new SME envoy takes this matter serious and joins us in our efforts to reduce administrative burden for our SMEs.

The European Parliament also called on the EU Commission to build on the existing SME performance review process and create an annual debate on the ‘State of the SMEs in the EU’ to be held at a European Parliament plenary sitting. We need the new SME envoy to be at the forefront of this initiative in order to make it a meaningful exercise. This would lead to concrete results in improving the entrepreneurial environment for SMEs in cooperation with the national and local organisations representing them

We need clarity about the EU Commission’s intentions. This is not about us. It is about the people, the families, the communities. For them, time is running out.

The text was first published on Brussels Morning on 13.5.