EESC calls on EU to recognise the diversity of SMEs in legislation

7 Jul 2017
Milena Angelova, Rapporteur

In an opinion adopted at its July plenary, European organised civil society asks the Commission to better formulate and communicate SME policies

Small and medium-sized enterprises (SMEs) are the backbone of the European economy and have a huge potential to contribute to its development. Acknowledging that, the European Economic and Social Committee (EESC) is actively pushing EU institutions and Member States to develop strong SME support policies.

In an opinion approved at its July plenary, the EESC expressed concerns that the existing inefficiencies in the formulation and implementation of SME policies are hampering their effectiveness, and called on the Commission to address these issues.

"There is a need for a visible, coordinated and consistent horizontal policy for SMEs, based on a multiannual action plan and acknowledging the heterogeneity and diversity of European SMEs", said Milena Angelova, EESC rapporteur for the opinion on "Improving the effectiveness of EU policies for SMEs".

The EESC's vice-president, Gonçalo Lobo Xavier, added: "This opinion addresses absolutely essential questions which will have a real impact. I work closely with SMEs in Portugal, and I know the legislative framework is highly important because it does decide the way they work, their access to structural funds and other means of finance".

The EESC praised the efforts to put SMEs at the heart of economic policies over the last decade. However, it stressed that EU policies are too broadly targeted and do not recognise the diversity and heterogeneity of SMEs. "The 'one size fits all' approach is a crucial problem that prevents policies from delivering", added Ms. Angelova.

EU SME policies should explore the specific needs of microenterprises, family and "traditional" businesses, social enterprises, liberal professions, self-employed people, etc., which have frequently very different legal forms and ways of operation.

In addition, the Committee's opinion calls on the EC to assess whether the current definition of SMEs corresponds to their heterogeneity, sectoral dynamics, specific features and diversity.

Ms. Angelova stressed: "SMEs often feel that policymakers have no idea of how their businesses actually function. The majority of EU support mechanisms seem unsuited to respond to their pressing needs for fast, clear and effective solutions".

On the other hand, some small and micro companies are unaware of the existence of support mechanisms and have therefore no access to them. There is a wide communication gap between policy-makers and SMEs, which should be addressed urgently.

The EESC pointed to the need to establish strong multi-stakeholder partnerships (SME platforms) and to involve compulsory SME representative organisations at European, national and regional level.

Members also expressed concerns over the implementation of the Small Business Act for Europe, and called on the "think small first" and "once only" principles to be made legally binding at all levels.

Effective SME support policies are needed because, unlike in other parts of the world, in Europe companies have to comply with extensive regulations at both national and supra-national level, something which significantly increases the efforts and costs to do business.

As an active advocator of European SMEs, the EESC has already adopted a number of opinions on how these support policies should be framed, such as: the review of the Small Business Act (2011), access to finance, the COSME programme, SMEs and global opportunities (2012), as well as smart regulation (2013).