EU wants regional policy to become ‘launch-pad’ for SMEs

The Commission boosted its focus on SMEs yesterday (9 July) by presenting a new initiative aimed at helping EU cohesion policy to better assist small businesses. The move comes just a day after it pledged to cut tax and make state aid rules more flexible to boost their growth.

Regional Policy Commissioner Danuta Hübner announced the allocation of at least €27 billlion (7.9% of total community investment) out of the bloc’s 2007-13 cohesion fund to SMEs, with the lion’s share (65% or €17.5 billion) going to technology and innovation. The remaining €10 billion or so will be allocated to ICT activities (14%), start-ups (12%) and eco-friendly projects (9%), Hübner said. 

“With only a small amount of investment, it is possible to achieve a high impact and raise the innovation capacity of small businesses,” Hübner pointed out. 

Cohesion policy and SMEs – “the backbone of the European economy” – are partners in implementing the EU’s Lisbon Strategy for competitiveness, growth and jobs, the commissioner pointed out. She stressed that cohesion funds already represent SMEs’ biggest source of finance across the EU budget. 

By promoting “local action”, creating network clusters, assisting diversification and innovation and most importantly, facilitating access to finance, Hübner aims to use cohesion policy as a “launch pad” to boost the Union’s 23 million SMEs, which account for 99% of all EU businesses and 2/3 of all private sector jobs. 

The programme could also help to implement the Small Business Act (SBA), a long-awaited initiative to facilitate SMEs’ activities by cutting red tape and promoting better access to funding, presented by the Commission last month (EURACTIV 26/06/08), according to Hübner. 

Regional programmes such as the micro-credit initiative, to be launched in September in partnership with the European Investment Bank, also constitute a key part of the EU executive’s proposal. According to the commissioner, they could particularly contribute to improve conditions for SMEs in the new member states, which are still catching up in terms of developing support systems.

Indeed, most new members still allocate less than 5% of the funding available from the EU’s regional funds to these businesses, while Scandinavian countries, the UK or Austria spend 15-25% of the money they receive on SMEs, according to Commission figures. 

Read more with Euractiv

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