Looking for Ways to Increase the Effectiveness of EU SME Policies, in Partnership with the European Economic and Social Committee

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The discussion was opened by Mr. Vassil Velev, Chairman of the Bulgarian Industrial Capital Association and Mr. Valeri Simeonov, Deputy Prime Minister of the Republic of Bulgaria. Deputy Minister of Economy Mr. Lachezar Borisov, the Executive Director of the Bulgarian Small and Medium Enterprises Promotion Agency Mrs. Marieta Zaharieva, the Head of the Risk Management Group of the European Investment Fund Mrs. Denitsa Berkhoff, the Secretary General of the European Association of Guarantee Institutions Ms Catherine Stourm, as well as the members of the European Economic and Social Committee (EESC) Dr. Milena Angelova – Secretary General of BICA, Mr. Dimitris Dimitriadis, Mr. Chris Lefevre and Mr. Panagiotis Gofas.

Small and medium-sized enterprises (SMEs) produce about 70% of the country’s GDP and work for 75% of the employed, said the chairman of BICA Vasil Velev. He noted that the potential of small businesses to secure growth and employment is severely hampered by severe administrative and bureaucratic procedures and shortage of human resources and welcomes the fact that one of the priorities of the Bulgarian Presidency of the Council of the EU is to provide better conditions for SMEs.

The Deputy Prime Minister of the Republic of Bulgaria, Mr. Valeri Simeonov reminded that the government supported the small and medium business with the amendments to the Labor Migration Act in the first month of its work. This measure has allowed the import of 4,000 people from other country, which has secured the most successful summer tourist season in years. With the forthcoming changes in the Law on the Ministry of Interior, the Blue Card regime will be facilitated, as well as the access to the labor market in the country of highly qualified personnel. The government is also working on amendments to the Bulgarian Citizenship Act, which will also contribute to providing workforce for business in Bulgaria. A program to reduce the administrative burden for business and citizens is successfully implemented.

The EESC’s main proposals, co-ordinated with BICA and presented during the discussion, are related to: changing the definition of SMEs on the basis of which companies receive access to EU funding, cheaper loans and a range of administrative reliefs; introducing a legal obligation – both in the EU and in Bulgaria – to respect the principles of “think small first” and “just one more time” as well as to test the suitability of all legislative changes to the needs of SMEs.

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The EESC and BICA insist that the European Commission should enable SMEs to choose which of the two requirements – number of employees, turnover or balance figure – to meet instead of imposing the “number of the staff employed “as a leader. They also call for simplification of State aid rules, reassessment and change of connectivity constraints, updating thresholds for micro, small and medium enterprises as they have not changed over the last 20 years.

The views of the EESC and the BICА were also supported by former EESC President Dimitris Dimitriadis, who pointed out that EU SMEs account for almost 23 million and provide jobs to 67% of Union employees.

“For the period from 2007-2013 , ERDF helped to SMEs with approximately EUR 47.5 billion. The comparison between the number of beneficiaries – 246,000 SMEs and the total number of businesses – 18.5 million at that point clearly indicates that the EU has failed to support this very important category of enterprises, “he said. The expert commented that more EU funds for SMEs are benefiting by the North countries in EU not the South.

This was the case for Mrs. Denitsa Berkhoff, Head of the Risk Management Group of the European Investment Fund, to clarify that with its own EUR 930 million, the financial institution has attracted an additional EUR 2.4 billion to support SMEs. Over past 5 years, about 15,000 SMEs from Bulgaria have benefited from such funding.

This was the case for Mrs. Denitsa Berkhoff, Head of the Risk Management Group of the European Investment Fund, to clarify that with its own EUR 930 million, the financial institution has attracted an additional EUR 2.4 billion to support SMEs. Over the past 5 years, some 15,000 SMEs from Bulgaria have benefited from such funding.

For a more ambitious Small Business Act in Europe (SBA), the National Association of Small and Medium Business, a member of BICA, announced. According to the chairman of the association Mrs. Negulova, SMEs in Bulgaria need this SBA to be implemented with a legally binding document, to adopt a precise “road map” with deadlines, funds and funding, along with measures to follow up and assess progress on its application.

The specific recommendations of the forum are also related to the need to minimize administrative burdens and put an end to the practice of Member States imposing additional regulations and burdens when transposing European legislation at national level. The important role of employers’ organizations was emphasized for a structured presentation of possible measures and solutions to stimulate SMEs and develop entrepreneurship.

Another very serious difficulty experienced by SMEs – as opposed to large enterprises – is access to new markets. SMEs have a number of difficulties in engaging with larger businesses as part of their value chain, engaging in competitive clusters, accessing support mechanisms and tools, recruiting and retaining staff. EU policies for SMEs should devote more effort to informing SMEs – and in particular – the most vulnerable sub-groups, such as sole proprietors and micro-enterprises, traditional low-potential enterprises, businesses from remote regions, etc. – for available support. The main support networks should be maintained and promoted as well as made easier and more accessible to SMEs.