Members' Research Service By / June 1, 2023

Ensuring the recovery and resilience of EU small and medium-sized enterprises

In 2021, there were 23 million small and medium-sized enterprises (SMEs) operating in the EU’s single market.

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Written by Marin Mileusnic.

This briefing focuses on policy measures benefiting small and medium-sized enterprises (SMEs) that have been enshrined in the national recovery and resilience plans (NRRPs). Member States drew up their recovery plans in order to take advantage of the Next Generation EU (NGEU) recovery instrument and its Recovery and Resilience Facility (RRF), designed to support recovery from the pandemic while fostering the green and digital transitions.

The RRF is structured around six pillars representing key EU policy areas that will help Member States emerge from the crisis stronger and future-proof. The pillars also define investment priorities and the scope of financing under the RRF. On account of its particular relevance for SMEs, this briefing addresses the RRF’s ‘Smart, sustainable and inclusive growth’ pillar, but other pillars can also include SME-related measures.

The SME sector, including micro-enterprises, constitutes over 99 % of all businesses in the EU and was severely affected by the pandemic. Since SMEs represent the bedrock of the economy, it was essential to support them, and Member States have put forward extensive measures in their NRRPs targeting the SME sector both directly and indirectly. SME-related measures range from learning opportunities for SME employees to advance their digital skills to business decarbonisation, the setting up of new financing instruments aimed at developing new technologies in SMEs, and the removal of administrative and regulatory obstacles to boost the productivity of smaller businesses. SME-related measures under the ‘Smart, sustainable and inclusive growth’ pillar may also address other RRF objectives, including the specific digital and climate targets.

While the type and scope of the investments and reforms vary between Member States, all the measures feed into at least one of the three axes of the SME strategy developed and presented by the European Commission in 2020. These axes refer to capacity building and support for transition to sustainability and digitalisation, reducing the regulatory burden and improving market access, and boosting access to financing. These dimensions are also reflected in the country-specific recommendations (CSRs), presented in the context of the European Semester. To obtain RRF funding, the NRRP measures must address at least a significant subset of the 2019 and 2020 CSRs.

Read the complete briefing on ‘Ensuring the recovery and resilience of EU small and medium-sized enterprises‘ in the Think Tank pages of the European Parliament.

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