Implementation of the thematic objective "enhancing the competitiveness of SMEs" (Article 9(3)) of the Common Provisions Regulation

The European Parliament adopted by 615 votes to 18 with 59 abstentions, a resolution on the implementation of the thematic objective ‘enhancing the competitiveness of SMEs’ – Article 9(3) of the Common Provisions Regulation (EU) No 1303/2013 of the European Parliament and of the Council regarding the five structural and investment funds, on the thematic objective of enhancing the competitiveness of SMEs.

Members recalled that Cohesion Policy in the 2014-2020 programming period would further support SMEs by doubling the 2007-2013 support to EUR 140 billion. The thematic objective entitled ‘enhancing the competitiveness of SMEs’ (TO 3) is one of the thematic objectives with the highest percentage of overall funding, amounting to 13.9 % of total funds.

The 23 million small and medium-sized enterprises (SMEs) in the EU, which account for around 99 % of all businesses, make a fundamental contribution to economic growth, social cohesion, innovation and high-quality job creation, providing over 100 million jobs which generate 2 out of every 3 private sector jobs, and maintaining double the employment growth rate of larger enterprises.

Enhancing support from the ESI Funds to SMEs: given that SMEs are the driving forces behind the European economy and are key to the success of Cohesion Policy, but that they often face multiple challenges owing to their size, parliament recommended further enhancing the support from ESI Funds directed towards SMEs. It called on the Commission, the Member States as the regional authorities to:

• take into account the added value of SME projects for the development and innovation of traditional sectors, as this will not only stimulate job creation, but also maintain local and regional business specificities, whilst respecting the principles of sustainability;

• take into consideration the principles of the circular economy package in the implementation of TO 3, in order to generate new high-quality jobs for SMEs, with special attention being paid to promoting green jobs;
• consider the use of the financial instrument opportunities, while emphasising the need to ensure the transparency, accountability and scrutiny of such financial instruments and of the SME Initiative Programme aimed at financially supporting SMEs.

Simplified and less regulated access to credit: regretting that investors and banks are often reluctant to finance businesses in their start-up and early expansion phases and that many SMEs, especially small start-ups, have found it hard to gain access to external funding, Members asked for particular attention to be paid to improve access to finance for microenterprises and start-ups that want to scale-up and interest rates for SMEs and large enterprises should be set at the same rate.

Remedying the low absorption rate: Parliament noted that the complex management of structural funds and administrative burdens, as well as limited access to financing for SMEs and complexity of implementation of support schemes, led to an insufficient absorption of such funds by SMEs. It called on the Commission to rapidly prepare an assessment of this issue, in cooperation with the Member States, and submit it to Parliament. It stressed that poor administrative capacity may hinder the successful and timely implementation of TO3.

Public procurement: Members urged that obstacles faced by SMEs in bidding for contracts be removed as far as possible, eliminating unnecessary administrative burdens. While welcoming Directive 2014/24/EU and the European Single Procurement Document (ESPD), Members:

• stressed the need to continue with the strict application of anti-error and anti-fraud measures without adding to the administrative burden;
• called on contracting authorities wishing to group contracts together to take care not to exclude SMEs from the process by the sheer scale of the final lot, since larger contracts could involve more cumbersome criteria.

Enhancing transparency: noting with concern that many SME organisations in the Member States are not really involved and are often only informed without being adequately consulted, Members stressed the need for actual implementation and respect of the partnership principle. They reiterated their calls to enhance transparency and the participation of all relevant regional and local authorities, civil society stakeholders, entrepreneurs and other interested parties, especially in the process of defining the requirements in calls for project proposals in order to better target final beneficiaries’ needs.

Further recommendations: Parliament called on the Commission and the Member States to:

• ensure enhanced coordination and consistency among all EU investment policies targeted at SMEs in order to enhance the synergy between ESI funding and other policies and financial instruments targeted at SMEs will maximise the impact of investments;
• monitor and encourage the acceleration of implementation of cohesion policy, in particular the setting up of projects with sustainable growth and quality job creation potential;
• provide specific recommendations for action and guidance aimed at further simplifying, monitoring and assessing the use of such financial instruments (especially in outermost regions);
• put in place structured dialogue between the European Investment Bank and the European Investment Fund in order to improve and facilitate the access of SMEs to diversified funding sources;
• reduce the administrative burden and simplify procedures in the management of ESI Funds by SMEs;
• establish conditions for State aid at national and regional level which will not discriminate against SMEs;
• urgently find a lasting solution to the backlog of payments related to regional policy and to properly apply the Late Payment Directive (2011/7/EU);
• draw up specific programmes which embody all relevant sustainable, smart and inclusive growth elements for SMEs;
• establish a participatory platform within existing budgets for the dissemination of SME project results;
• stimulate the creation of an ecosystem composed of universities, research centres, social and economic stakeholders and public institutions to foster entrepreneurial skills, while encouraging managing authorities to engage the available funds intended for technical assistance, including the innovative uses of ICT by SMEs;
• facilitate the setting up of enterprises by the promotion of entrepreneurial skills and the introduction of entrepreneurship in school curricula;
• make greater use of ESI Funds to help SMEs to seize the opportunities offered, and address the challenges posed, by international trade, while supporting them in addressing adjustment costs and the negative impacts of increased international competition.

Lastly, Members stressed Parliament’s role in the supervision of results-oriented implementation of cohesion policy.