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Taming the paper tiger

Taming the paper tiger

Small and medium-sized business (SMEs) in Europe have expressed fear that the forthcoming European Small Business Act will be a mere paper tiger, one of numerous documents produced by the EU containing nothing but hot air and empty promises. SMEs have reason to be disillusioned, for far to long they have been neglected or taken for granted by politicians. There is however an increased awareness within EU institutions of their importance.

The present European Commission’s ambition to cut red tape surrounding SMEs and to provide better regulation is commendable. Already some progress has been made and it is essential the Commission sticks to its focus. I hope the Small Business Act will further contribute to this important work.

The American scheme which the Small Business Act will be modelled upon, includes some features many would probably like to duplicate in a European environment, such as a share of public procurement contracts reserved for SMEs. The European Union differs from the US, however. Most contracts of this sort are national matters and it would be wrong to impose EU regulations on competition other than to make sure competition is free and fair. We need less, not more, regulation. What the EU should do, is to provide SMEs with equal opportunities and not to burden them with rules and regulations only bigger companies can afford and manage to handle.

In the European Parliament’s biggest grouping, the centre-right EPP-ED Group, where both my Swedish party and the British Conservatives can be found, we consistently work to support and promote efforts by the Commission to reduce unnecessary regulation and to amend Commission proposals to further improve the business environment for SMEs.

Recently, I tabled an amendment in the Parliament’s Committee on Industry, Research and Energy, aimed at simplifying the participation of SMEs in the European Union’s research programmes. SMEs could give substantial contributions to research programmes and projects they previously have been barred from due to excess red tape and restrictions. To my delight, this amendment was passed both by the Committee and, later on, by the entire Parliament. Such reforms are important, since the creativity necessary to progress in research and technological development usually is to be found in SMEs, not in bigger, less flexible, companies.

Apart from removing obstacles to business, such as unnecessary red tape, the most important thing we can do at a European level to strengthen SMEs, is to continue the deregulation of European markets. Huge corporations, usually former state monopolies, still have a completely dominant position in many areas. Often supported by state aid and hidden subsidies. As the lead member in the European Parliament I have tried to deal with this problem. Without true competition the European economy will suffer, jobs will be lost and opportunities missed. There is little room for smaller companies to grow, where market shares are more or less reserved for companies originating in a protected and monopolised environment.

Growth in Europe’s economy is dependant on successful SMEs. SMEs are essential if Europe is to maintain and develop its position as a leading world economy.

Gunnar Hökmark is a senior Swedish MEP and vice-Chairman of the centre-right EPP-ED group in the European Parliament.