Changes from plenary report to adopted text

– having regard to its resolution of 8 September 2015 on family businesses in Europe,

– having regard to its resolution of 17 April 2020 on EU coordinated action to combat the COVID-19 pandemic and its consequences,

– having regard to its resolution of 15 May 2020 on the new multiannual financial framework, own resources and the recovery plan,

– having regard to its resolution of 23 July 2020 on the conclusions of the extraordinary European Council meeting of 17-21 July 2020,

– having regard to the Commission communication of 23 February 2011 entitled ‘Review of the “Small Business Act” for Europe’ (COM(2011)0078), and to Parliament’s resolution thereon of 12 May 2011,

– having regard to the Commission communication of 7 December 2011 entitled ‘An action plan to improve access to finance for SMEs’ (COM(2011)0870),

– having regard to the Commission communication of 7 March 2013 entitled ‘Smart regulation – Responding to the needs of small and medium-sized enterprises’ (COM(2013)0122),

– having regard to the Commission communication of 22 November 2016 entitled ‘Europe’s next leaders: the Start-up and Scale-up Initiative’ (COM(2016)0733),

– having regard to the Commission communication of 11 December 2019 on the European Green Deal (COM(2019)0640),

– having regard to the Commission communication of 19 February 2020 entitled ‘Shaping Europe’s digital future’ (COM(2020)0067),

– having regard to the Commission communication of 10 March 2020 entitled ‘An SME Strategy for a sustainable and digital Europe’ (COM(2020)0103),

– having regard to the Commission communication of 10 March 2020 entitled ‘A New Industrial Strategy for Europe’ (COM(2020)0102),

– having regard to the Commission communication of 11 March 2020 entitled ‘A new Circular Economy Action Plan. For a cleaner and more competitive Europe’ (COM(2020)0098),

– having regard to the Commission communication of 27 May 2020 entitled ‘Europe’s moment: Repair and Prepare for the Next Generation’ (COM(2020)0456),

– having regard to the Commission communication of 27 May 2020 entitled ‘Adjusted Commission Work Programme 2020’ (COM(2020)0440),

– having regard to the Commission communication of 1 July 2020 entitled ‘European Skills Agenda for sustainable competitiveness, social fairness and resilience’ (COM(2020)0274),

– having regard to the Annual Report on European SMEs 2018/2019 of November 2019,

– having regard to the Commission’s 2020 Spring Economic Forecast,

– having regard to the European Court of Auditors’ Special Report 02/2020 of 22 January 2020, entitled ‘The SME Instrument in action: an effective and innovative programme facing challenges’,

– having regard to the findings of the Digital Economy and Society Index 2020, published on 11 June 2020,

– having regard to the World Bank’s Global Economic Prospects report of June 2020,

– having regard to the OECD report of 10 December 2019 entitled ‘The Missing Entrepreneurs 2019’,

– having regard to Rule 54 of its Rules of Procedure,

– having regard to the opinions of the Committee on International Trade, the Committee on Employment and Social Affairs, the Committee on The Internal Market and Consumer Protection, the Committee on Transport and Tourism, the Committee on Agriculture and Rural Development and the Committee on Culture and Education,

– having regard to the letter from the Committee on Legal Affairs,

– having regard to the report of the Committee on Industry, Research and Energy (A9-0237/2020),

C. whereas SMEs should be at the centre of the European Green Deal and digital strategy, and be properly supported by tailored financial instruments and an SME-friendly legislative environment in order be enabled to play an important role in the growth of the European economy, as well as in the broader strategic objectives of the Union, including the environmental objectives by 2050; whereas in its resolution on EU coordinated action to combat the COVID-19 pandemic and its consequences, Parliament stressed that the European Green Deal and digital transformation should facilitate the post-COVID recovery and reconstruction strategies; whereas SMEs must be actively involved and supported in the EU’s digital strategy and the European Green Deal in order to improve their competitiveness and unlock their potential for digitalisation, deployment of innovative solutions and tackling pressing environmental and societal concerns; whereas the contribution of SMEs will be crucial to the success of these strategies;

D. whereas the economic crisis and the grim economic outlook triggered by the pandemic have brought a considerable and indeterminate number of SMEs and start-ups to the verge of insolvency; whereas in 2018 only 40 % of companies were paid on time; whereas the liquidity crunch from which many SMEs are suffering will not only have negative repercussions on their day-to-day operations, but also on their future growth perspectives, preventing them from properly planning long-term investments;

E. whereas the emergency asset purchases by the European Central Bank (ECB) in response to the economic crisis caused by the pandemic mainly help larger companies, as they rely more on the commercial debt market, but do not improve financial conditions for SMEs; whereas the EU and the Member States should act boldly and swiftly to minimise the economic, social and strategic risks associated with the disappearance of these companies; recognises that bank lending is traditionally the main source of external financing for SMEs in the Union, accounting for more than three quarters of SME financing, which makes SMEs particularly vulnerable to bank lending contractions; whereas SMEs do not have the tools to face a protracted crisis and national measures should not negatively affect the EU internal market;

F. whereas the impact of the capital shortfall as a consequence of the COVID-19 crisis will differ across sectors, company types and Member States, leading to divergences in the internal market; whereas it is important to maintain a level playing field in order to minimise distortions to competition within the internal market, while the differential in the growth performance between Member States is one of the causes of uneven economic development within the EU; whereas SMEs suffer even more from overwhelming and often deregulated global competition;

G. whereas the OECD Economic Outlook does not rule out, in the event of another serious wave of COVID-19, that the loss of income by the end of 2021 will exceed that of any previous recession in the last 100 years; whereas, following the COVID-19 outbreak, State aid should not lead to distortions of competition on the internal market between SMEs from different countries; whereas the pandemic has shown that the digital transition is of the utmost importance and has highlighted the need for digitalising the economy to ensure better resilience in the future, while environmental challenges persist and need to be addressed; whereas the EU is facing tough competition from global players; whereas innovation represents an effective way for SMEs to build long-term and sustainable growth;

H. whereas the adoption of environmentally sustainable practices, innovations and technologies is expected to create new jobs and business opportunities for SMEs while improving their competitiveness and reducing their costs, provided that the right administrative, regulatory and technical conditions are in place; whereas many SMEs wish to improve their environmental performance, resource and energy efficiency, use of digital technologies and deployment of innovative solutions, all of which will be crucial for supporting their long-term and sustainable growth and competitiveness, as well as enabling them to play a key role in directly delivering eco-innovations; whereas to this end, better access to funding and technical support should be provided;

I. whereas, according to the Commission’s Digital Economy and Society Index 2020, many SMEs still lack full access to digitalisation and are lagging behind large firms both in terms of digital skills and the digitalisation of their operations, owing in part to unfair competition from multinational companies; whereas the same rules should apply both in the digital and non-digital single markets in order to ensure a level playing field while avoiding negative impacts on labour and social rights; whereas the use of data can lead to a competitive advantage and allow SMEs to reap the benefits of the digital transition, while the focus on digital literacy and skills should go hand in hand with the enhancement of EU investment in digital infrastructure as well as with the improvement of data access for SMEs and fair commercial and regulatory frameworks in all types of market settings, i.e. business to business, business to consumer and business to government;

J. whereas one of the main challenges in unlocking the potential of digitalisation is to find skilled employees; whereas the Commission, the Member States and local governments should act to improve the business environment in order to ensure the competitiveness of SMEs as well as the sustainable and long-term economic growth of the Union; whereas the Union’s SME strategy represents an opportunity to foster the entrepreneurial culture of under-represented groups and to enable them to fully harness opportunities stemming from the digital and green transitions;

L. whereas regulatory burdens should be reduced, such as the financial and ‘hassle’ costs of compliance created by over-regulation and overly complex administrative procedures, including the challenges related to patent litigation, for example in the field of intellectual property protection but also with reference to funding opportunities; whereas innovation is not associated with regulation, but is propelled by collaborative efforts in which businesses interact to exchange knowledge and information and to combine ideas and financing with partners as part of broader innovation systems; whereas grants are typically more likely than tax credits to reach SMEs or activities in which SMEs are more likely to be involved;

M. whereas the EU’s definition of SMEs is referred to in over 100 EU legal acts covering a wide range of policies; whereas the Commission will further examine the current definition and report on specific issues raised in the most recent public consultation, such as complex ownership structures or possible ‘lock-in effects’; whereas the Commission still needs to comply with the judgment of the European Court of Justice of 15 September 2016 requiring the clarification on the criteria of ‘independence’ and ‘autonomy’;

N. whereas micro-enterprises represent a significant proportion of European SMEs and very often have difficulties in accessing finance as well as in gaining knowledge of the opportunities that are available at the European and national levels; whereas this category of businesses has also been hit very hard by the COVID-19 crisis and, without prejudice to the current definition of SMEs, deserves to receive more assistance and be better promoted;

O. whereas mid-caps contribute significantly to employment and growth, especially in some Member States; whereas the Commission should, as part of the REFIT initiative, assess the need for a separate mid-cap definition in order to enable targeted measures, while ensuring that this does not broaden the existing SME definition nor compromise SME support in any way;

Structural challenges prior to the COVID-19 crisis

1. Welcomes the Commission’s SME strategy and shares its view that SMEs are essential to the European economy; highlights the need to update the SME strategy in the light of the COVID-19 crisis while keeping the focus on advancing the transition toward a socially, economically and environmentally resilient society and a competitive economy, and calls therefore for the SME strategy to be aligned 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, with the view of achieving better competitiveness, long-term growth and better resilience;

2. Calls, furthermore, for measures to improve the environment for business creation and to strengthen the entrepreneurial spirit, including through the reduction of administrative burdens on SMEs; calls in this regard for the adoption of an SME action plan with clear objectives, milestones and timeline, accompanied by regular monitoring, reporting and evaluations; stresses in this context the need to enhance the entrepreneurial spirit within the Union and to provide the conditions that will enable new businesses and existing SMEs to thrive and innovate, and thereby contribute to the Union’s economic, social and environmental sustainability and economic competitiveness;

3. Acknowledges that an excess of administrative and regulatory burdens is hindering the ability of SMEs to thrive as they lack the necessary resources to meet complex bureaucratic requirements;

4. Welcomes therefore the Commission’s commitment to introduce a ‘one in-one out’ principle, but recalls that this merely maintains the status quo in legislation, which is not a sufficient ambition, and stresses the need for Member States to avoid gold-plating as a first step towards stemming the tide of new regulation; recalls that public administration, both at the European and the national levels, has a key role to play in ensuring the ease of doing business and, for example, in promoting investments aimed at boosting economic competitiveness, while safeguarding the highest standards of transparency, workers’ health, rights and safety and environmental protection;

5. Calls therefore on the Member States and the Commission to acknowledge the need for better regulation and simplification and to adopt a roadmap with concrete and binding targets and indicators as an important prerequisite for our economy’s ability to recover and innovate, and for the safeguarding of EU companies’ competitiveness; notes that several Member States have set quantitative targets of up to 30 % for the reduction of administrative burden and calls on the Commission to set ambitious and binding quantitative and qualitative targets at EU level for the reduction of administrative burdens, as soon as possible after conducting an impact assessment and in any case no later than June 2021, and in advance of the Commission communication;