Small and Medium Enterprises To-Do-List

MAKE OR BREAK
An SME to do list for the months ahead
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The European Union and its SMEs are at a crossroads. The uncertainty surrounding our economy, financial markets volatility and the sovereign debt crisis that has hit some Member States have taken their toll on SMEs confidence and performance in the last months. The EU and Member States put together a substantial policy response to try and to bring our economy back to sustainable growth and to re-stabilise financial markets. However, all these efforts must now be channelled to meet the needs and expectations of SMEs. At the same time, discussions are well underway for several important programmes for 2014-2020. Against this background, this document sets a to do list of measures that must be given absolute priority in the weeks and months ahead, as they have the potential to really make a difference to the daily business of SMEs. With Europe on the brink of a recession, it is make or break time to support the real economy and avoid a new, dangerous downturn.
What SMEs need now from THE EUROPEAN UNION

G An SME Economic Dialogue for better regulation, in line with the Think Small First principle
The Small Business Act review in 2011 set up the main lines of a new governance structure for European SME policies, starting with the appointment of the EU and 27 national SME Envoys. We believe that this measure is necessary but not sufficient to fill the gap between decision makers and SMEs. Therefore, we support the creation of an SME Dialogue composed of the EU SME Envoy, the Trio of Council Presidencies, the Trio of SME Envoys, MEPs, UEAPME and other representative business organisations. This group should be a platform for dialogue at the highest level on all SME-related policies and dossiers on the table. It should also meet regularly in order to grant consistency between its own outcomes and those of the Competitiveness Council and of the European Parliaments procedures. The SME Economic Dialogue would guarantee the application of the Think Small First principle from the outset to all policy initiatives taken at EU level and concerning SMEs. It would also greatly facilitate the quest for better regulation through a constant and constructive dialogue between decision makers and stakeholders.
G A further matching of the 2014-2020 programmes with SMEs needs and expectations
The programmes for 2014-2020 currently under discussion will be crucial for SMEs. In particular, the proposals for COSME, HORIZON 2020 and the 2014-2020 COHESION POLICY can pave the way to new and interesting financing and funding opportunities for SMEs. As the next months will decide the final shape of these programmes, the following features and changes are needed. On HORIZON 2020: The SME instrument needs a dedicated budget of 15% of the overall programme; The SME instrument needs a single management structure and a single entry point; The current SME definition must be kept; The thresholds to finance loan guarantees should be abolished. On COSME: The programme must be used to monitor the application of the Small Business Act principles in all policies and programmes; The programme should be built upon dialogue and partnership with SME organisations; The programme should bring about a revision of the Enterprise Europe Network; The thresholds to finance loan guarantees should be abolished. On the 2014-2020 COHESION POLICY: The concept of multilevel governance and partnership must become a reality at all levels. The full involvement of economic and social partners in the definition of the priorities is a precondition for success; Ring-fenced budget quotas for SMEs competitiveness and for innovation-related activities must be kept in place; The enhanced possibility to use structural funds to support the creation of financial instruments deserves further efforts and perhaps an anticipated use before 2014; The administrative and financial rules for SMEs and their organisations as well as for small projects must be simplified. To this end, working groups with experts from the EU institutions, national, regional and local authorities and SME representatives must be established.
What SMEs need now from MEMBER STATES
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Without Member States support and full involvement, the situation of small entrepreneurs on the ground cannot and will not change. On one hand, national governments must implement at home the policies they have agreed in Brussels, if necessary against the resistance of the vested interests of different groups. On the other hand, they must also come up with tailored solutions for the specific situation and needs of their economies, of their labour markets and of their SMEs. In both cases, they must bear in mind that the fiscal consolidation and structural reforms enforced by European and international institutions up to now were not sufficient to bring Europes economy back to sustainable growth and to restabilise the financial markets. Therefore, they must be matched by growth enhancing measures capable of kick-starting their economies and revitalising their SMEs. In particular, we believe that the following areas deserve immediate attention.
Labour market reforms and efficient qualification systems are needed to create jobs
Labour market reforms are long overdue in many Member States. Action is needed both on the demand and the supply side. Reforms must be based on the flexicurity principles and set growth and job creation as their main goal. In a time of recession, support measures for companies and active labour market policies play an important role. Moreover, there is a clear need to reduce the tax wedge on labour and adjust wage policies. As far as qualifications are concerned, work-based learning and apprenticeship are key to improve employability, notably for young people, and should be properly initiated or further promoted by the Member States lagging behind, based on the best practices and on the success of the best performing countries in terms of youth employment in Europe.
G SMEs access to finance must be guaranteed
The late payments directive must be fully implemented in an effective and accessible way for SMEs. It must be ensured that financial intermediaries are able to take up the EU funding available through the various programmes (CIP, structural funds, FP7 etc). New tailored financial instruments capable of answering to the real needs of the different types of SMEs (guarantees, mezzanine finance instruments, venture and equity capital) must be created. Tax systems must be reviewed to provide more incentives for the use of venture and equity capital by companies.
G Adequate SME support measures must be put in place
Access to risk-carrying capital and new technologies and the availability of consultancy services are crucial to explore the innovation potential of SMEs. SMEs need a favourable framework to meet the challenge of a resource-efficient economy and more sustainable producction methods. This must include awareness-raising campaigns specifically addressed to SMEs, technical assistance schemes offered for free or at a reduced price at local level, and easier and affordable access to finance for their green investments. Access to markets for SMEs depends to a very large extent on the use of standards. Moreover, SMEs only benefit from the use of standards when these are fit for them. Therefore, access to standards documents must be made as easy as possible for SMEs, and their representative associations must be fully involved in the standardisation work at national level. SMEs rely extensively on the activities of intermediary business organisations, which provide irreplaceable advice, business support and interest representation. Their action must be backed and their voice must be heard by Member States.
G Better regulation must become a reality on the ground

After decades of discussions on better regulation and despite the ambitious goals put forward at EU level, the situation on the ground has not improved. In fact, small entrepreneurs feel that administrative burdens have actually increased in the last years. Member States can and should do much more to cut bureaucracy and red tape. In particular:
When transposing EU directives, Member States must avoid gold plating, i.e. the practice of exceeding the terms of EU legislation and adding undue and unnecessary clauses. They can adapt EU legislation to the national circumstances if need be, but must make sure that their action does not generate extra burdens for the national business community. When legislating at national, regional, and local level, public authorities must act only if necessary and always with the smaller business entities in mind. In other words, they must fully apply in practice the Think Small First principle, to which they have subscribed in theory, and always use the SME Test. Brussels, 1st October 2012

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MAKE OR BREAK

An SME to do list for the months ahead

What SMEs need now from THE EUROPEAN UNION

What SMEs need now from MEMBER STATES

G SMEs access to finance must be guaranteed

G Adequate SME support measures must be put in place

G Better regulation must become a reality on the ground

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