MEP’s blueprint for SMEs in post-COVID recovery 

• Many SMEs do business in sectors worst hit by the economic crisis
• COVID-19 is pushing SMEs towards digitalization
• Recovery investment should target ecosystems where SMEs are most present

The report, adopted in plenary session on Wednesday with 533 votes to 58 and 82 abstentions, highlights the need to update the European Commission’s SME strategy in the light of the COVID crisis while keeping the focus on advancing the transition toward a socially, economically and environmentally resilient society and a competitive economy. MEPs call for aligning the SME Strategy with the Industrial Strategy, the European Data Strategy and the European Green Deal, in order to actively involve and support all SMEs in the twin transition.

As SMEs miss the necessary resources to face complex bureaucratic requirements, the excess of administrative and regulatory burden is hindering their ability to thrive, say MEPs, who welcome the European Commission’s commitment for a “one in-one out” principle and call for setting up a roadmap with concrete and binding targets for better regulation and simplification.

Ensure liquidity and funding for SMEs

MEPs stress the immediate need to restore the liquidity of SMEs to ensure their basic functioning, and warn that their post-COVID-19 survival, in particular of micro-entreprises given their structural weaknesses, will depend on swift decision-making, adequate funding and availability of liquidity. MEPs express concern regarding the difficulties in accessing EIB funding lines faced by most SMEs, partly because of lacking awareness, but also slowness and excessive complexity of the procedures and eligibility criteria. Investments in innovation should prioritize ecosystems that are inclusive of SMEs, they add.

MEPs are deeply concerned that sectors such as tourism, hospitality, cultural, creative, transport, trade fairs and events sectors, which are largely composed of SMEs, have been hit the hardest by the COVID-19 crisis. They advocate a temporary relaxation of EU State aid rules, taking into account the specificities and the geographical disadvantage affecting those SMEs located in the most peripheral territories.

COVID-19 push towards e-commerce and digitalization

The COVID-19 crisis has pushed SMEs towards innovative technologies, new ways of organising their work and digital business models such as e-commerce, the sharing economy and remote working, say MEPs. Member states should develop pilot initiatives to accelerate SMEs’ take up of e-commerce solutions, they say.

"European SMEs have been long in need for stronger attention"

"European SMEs have been long in need for stronger attention from the institutions, both at the European and the national level. What we did, in our capacity as the parliamentary team appointed to draft this report, was identifying what challenges are still pending from the past years, and which ones have recently emerged in the aftermath of the Covid-19 pandemic, in order to provide the Commission with a clear outlook of what issues ought to be tackled by the next EU strategy". said lead MEP Paolo Borchia (ID, IT).

"Given the importance of the subject, there was a will to move forward as swiftly as possible from all political groups. First and foremost, the need to make readily available funding and liquidity for SMEs, as well as the need to set concrete and binding roadmap to reduce administrative burdens, for example by following the target adopted by some Member States to cut bureaucracy by 30%" he said.

"Concerning the future outlook in the post-Covid years, we want SMEs to be at the centre of the innovation and transition efforts. This means SME-tailored legislation and appropriate support from the institutions to ensure that SMEs can stay competitive in the medium and long-term" he added.

Background

The Commission’s communication “An SME strategy for a sustainable and digital Europe” was published on 10 March 2020, a day before the World Health Organisation Issued the COVID-19 pandemic alert. Since then, the economic crisis made a revision of the strategy necessary, say MEPs.

There are 24 million SMEs in the EU-27. They represent the backbone of the economy, and generated more than half the EU’s GDP while employing about 100 millions workers before the beginning of the pandemic.