High-level discussions alone are no panacea for EU SMEs’ post-COVID challenges

Maltee MEP Josianne Cutajar says that although the COVID-19 recovery phase is starting, it is still too early to lift the liquidity relief measures that have so far helped SMEs weather the crisis

As the European Union’s small and medium-sized enterprises struggle to emerge from the economic turmoil brought about by the coronavirus pandemic, Maltese MEP Josianne Cutajar warned on Monday that, “a high-level discussion, alone, is not the panacea for all the challenges European SMEs are witnessing”.

The Labour MEP was speaking at a European Parliament debate with the European Commission on the ‘State of the SMEs Union’ and a strategy to help them emerge from the pandemic.

Speaking during the debate, Cutajar stressed it was still too early to consider easing economic stimuli, saying, “The recovery phase is starting, but it is still too early to lift the liquidity relief measures that have so far helped SMEs weather the crisis.”

Paying tribute to “the efforts of the many entrepreneurs leading micro, small and medium businesses, especially in this last, difficult year and a half”, she called for more innovation and the lifting of bureaucratic hurdles if Europe’s SMEs are to find their feet and see their confidence restored.

The EU, Cutajar said, needs to “think small first” in that support for SMEs means “progressive support.

“We cannot fail this time. We will not miss this opportunity.”

The European Commission’s communication on ‘An SME Strategy for a sustainable and digital Europe’ had been published on 10 March 2020, just a day before the World Health Organisation issued its COVID-19 pandemic alert.

Since then, the ensuing economic crisis made a revision of the strategy necessary for the EU’s 24 million SMEs, which together generate more than half of the EU’s GDP.

Parliament is calling for measures to help small and medium enterprises deal with the crisis and the twin challenges of digitalisation and decarbonisation.

A recent EP report, adopted with 533 votes to 58 and 82 abstentions, stresses 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.

In the report, 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, according to the report.

MEPs have stressed 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-enterprises given their structural weaknesses, will depend on swift decision-making, adequate funding and availability of liquidity.

MEPs are also concerned about 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.

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This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The European Parliament is not responsible for any use that may be made of the information it contains.

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