SMEs & the Recovery: A brighter future for Europe’s SMEs

Europe can only be successful if its economy is successful. Therefore, we have to do more to support SMEs in coming out of this crisis stronger and more resilient, argues Angelika Winzig.
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By Angelika Winzig

Angelika Winzig (AT, EPP) is co-chair of Parliament’s Intergroup on Small and medium-sized enterprises

11 Jun 2021

We are still in the middle of a raging pandemic and while the situation is still grim in many parts of the world, we are now slowly beginning to see a light at the end of the tunnel, with vaccine shipments being delivered and a high percentage of the population getting vaccinated. The European Union is working tirelessly to reach its goal of having 70 percent of the Union’s citizens receiving the jab by the summer.

Just recently, the European Commission President Ursula von der Leyen announced an additional 1.8 billion doses to be delivered by BioNTech/Pfizer. Simultaneously, more and more EU Member States are loosening their strict COVID regulations and slowly returning to a more normal life with businesses opening up again, as well as restaurants and bars. 

“The pandemic has shown us that digitisation is the way forward, therefore we must create a strong digital infrastructure that benefits our businesses and allows them to retain their global competitiveness”

While the lockdowns have proven to be successful in stopping the spread of the virus, they have also put an enormous burden on our enterprises. Many of them are struggling, with 60 percent of Europe’s SMEs reporting a drop in turnover in 2020 and SME employment decreasing by 1.7 percent in the same period; that’s 1.4 million jobs lost.

Furthermore, nearly half of firms are expected to reduce investment in 2021 and a recent August 2020 McKinsey survey of more than 2,200 SMEs in five European countries, revealed that half of those surveyed were worried that they might not be in business in 12 months’ time. 

Europe can only be successful if our economy is successful. Therefore, we have to do everything in our power to support them in coming out of this crisis stronger and more resilient.

To help businesses better weather the crisis, the EU has taken a number of initiatives including issuing the €540bn Coronavirus support package for jobs and workers, businesses and Member States, and agreeing on the unprecedented €750bn recovery effort, Next Generation EU, as well as establishing the temporary SURE instrument aimed at mitigating unemployment risks.

Furthermore, the European Commission has taken additional steps towards creating a more business and SME-friendly environment by finally releasing its Better Regulation communication. This includes a number of promising measures such as a stronger focus on involving stakeholders and businesses in the legislative process and the innovative one-in-one-out-regulation.

Moreover, the proposed horizontal actions to benefit SMEs as laid out in the Commission’s updated Industrial Strategy are important for delivering a holistic SME-centric approach across EU legislation. 

However, announcements on paper will not be enough to truly strengthen our economy. We have to make sure that these measures are implemented sooner, rather than later, and effectively. One-in-one-out must follow the principle of proportionality and common sense.

It will not help if we replace smaller regulations with more burdensome ones. In this spirit, the Commission will finally appoint a long-awaited SME envoy whose role will ensure that the SME dimension is effectively considered in any new legislation. 

We must actively combat red tape and make being an entrepreneur attractive again, especially in the aftermath of the pandemic. Let’s motivate and support innovation and foster entrepreneurial spirit and ensure we keep the thinkers, innovators and creators from leaving Europe. This also includes better access to financing; we need to ensure that acquiring money is easy and flexible.

This should also include the consideration of alternative forms of financing that can provide solutions tailored to the various individual requirements of our SMEs. Financing is particularly crucial also in view of the EU’s twin green and digital transitions ambitions.

“Let’s motivate and support innovation and foster entrepreneurial spirit and ensure we keep the thinkers, innovators and creators from leaving Europe”

To fully harness the potential of our companies in the fight against climate change and to make them drivers of innovation, we need to accompany and support them every step of the way during this transition. Only then can we guarantee growth, success and, most crucially, jobs.

The pandemic has shown us that digitisation is the way forward, therefore we must create a strong digital infrastructure that benefits our businesses and allows them to retain their global competitiveness. Enabling SME digitalisation has to be one of our key priorities. 

In the European Parliament, the SME Intergroup is tackling these issues. One of the oldest in the Parliament, the Intergroup serves as a joint platform for MEPs from various political backgrounds, entrepreneurs and various other stakeholders united in the goal of making better policies for SMEs.

Since SMEs do not have their own committee in the Parliament, the Intergroup hosts regular discussions and debates, the output of which should serve as guidelines for the policymaking process. The next virtual event will take place on May 26 and focus on Better Regulation for SMEs.

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