Supporting SMEs tops the agenda with focus on market integration, access to capital, and reducing administrative burdens. Further details below
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As indicated in the December SME Update, reducing administrative and reporting burden is at the top of the new European Commission (EC) agenda. The first set of concrete proposals on burden reduction is now expected for 26 February, with the launch of a so-called “omnibus package” consisting of a work plan (“Chapeau Communication) and a concrete “Omnibus proposal”. This package is expected to focus primarily on the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD) and the EU taxonomy. All of the above is only indicative and can still change in the coming weeks.
On top of the omnibus proposal, we may expect further EC initiatives in the coming months. For instance, the so-called new EU “Competitiveness Compass” is currently scheduled for 29 January. This initiative aims to introduce new mechanisms to assess the competitiveness impacts of EU legislation.
A Communication (a strategic plan outlining next steps) addressing challenges with e-commerce platforms is expected on 5 February. On 11 February, the EC is set to publish its 2025 workplan, which may include a timeline of further legislative initiatives to be introduced this year. Moreover, on 26 February the EU’s Clean Industrial Deal – a major initiative aiming to develop a sustainable and competitive European economy – is scheduled for release.
Finally, on 1 April, the EC plans to publish its Communication on the so-called Savings and Investments Union. This initiative seeks, among other objectives, to improve SMEs’ access to finance.
As with the omnibus package flagged in the previous article, all the above initiatives and timelines are indicative and remain subject to change in the coming weeks.
Poland took over the Council’s rotating 6-month Presidency from Hungary on 1 January. The Polish Presidency has now published their priorities for the next 6 months.
Supporting SMEs is high in the Polish Presidency’s agenda, with some of the priorities including:
From January 2025 onwards, Poland, Denmark, and Cyprus will be holding the Council Presidency each for a 6-month period. To coordinate their work during this total 18-month period, the three countries have published a so-called “trio programme” that sets out a coherent high-level strategy for their three presidencies and ensures a consistent, long-term approach.
The trio programme document outlines several points of interest and potential impact for SMEs. A key focus is on strengthening the EU’s long-term competitiveness and productivity, with emphasis on an integrated approach to competitiveness. This involves working to reduce the EU’s dependencies and increasing its resilience and economic security.
The programme aims to deepen the Single Market by removing barriers to services and essential goods, and ensuring a level playing field. Reducing administrative and regulatory burdens, especially for SMEs, is yet again a key priority. The programme also aims to promote EU skills policies and related investments to boost innovation and overcome skills gaps. The trio will work to mobilise public and private investment, including deepening the Capital Markets Union (CMU).
The trio’s plan also concerns the creation of a business-friendly environment by reducing bureaucratic burdens, and reforming administrative processes for businesses, particularly SMEs and start-ups. There is also a commitment to better regulation, with a focus on high-quality and timely impact assessments.
The Council reached a political agreement on 10 December on a new directive paving the way for the introduction of an electronic tax certificate for VAT exemptions. The directive will provide for an electronic certificate to replace the existing paper certificate that is used when goods are to be exempt from VAT, for example because they are imported for embassies, international organisations, or armed forces. The exact electronic format, including the necessary IT specifications, will be discussed in expert groups and determined in EC implementing acts. During a transitional period member states will be able to use both electronic and paper versions.
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The European Union Intellectual Property Office (EUIPO) and the European Patent Office (EPO) unveiled the results of their study, “Intellectual Property Rights and Firm Performance in the European Union.” The research highlights how intellectual property rights (IPRs) —including trade marks, designs and patents— drive business success, particularly for SMEs.
The study is based on data from 119,000 firms across all 27 EU Member States over a 10-year period (2013–2022), and demonstrates that companies owning IPRs significantly perform better than those without. Firms with IPRs see a 23.8% higher revenue per employee and pay wages that are 22.1% higher on average. After correcting for relevant factors such as country of origin, size and sector of activity, the difference in revenue per employee between IPR owners and firms without IPR is even higher and amounts to 41%.The benefits are particularly striking for SMEs, which achieve a 44% increase in revenue per employee compared to their non-IPR counterparts, while large firms enjoy a 16% increase.
