Costs to comply with new rules are ten times higher for SMEs – Alfred Sant

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Former Labour Prime Minister Alfred Sant has told the European Parliament that, on average, the costs to comply with new rules are relatively ten times higher for small businesses than they are for large enterprises.

“Beyond the steep drop in their value added, jobs provided by SMEs decreased by more than 1.4 million in the past year of Covid-19 crisis. Yet the systemic handicaps SMEs face on a European scale stretch farther than the pandemic” Labour MEP Alfred Sant stated during a session attended by the European Commissioner for Jobs and Social Rights, Nicolas Schmit.

The European Parliament held a joint debate on the ‘State of the SMEs Union’ and on efforts to reduce the administrative burden on micro, small and medium-sized businesses in the context of the recently updated Better Regulation agenda that aims to ensure evidence-based and transparent EU law-making based on the views of those that may be affected.

“When new legislation is being mooted, like in the digital area, we all stress the need for regulations to maintain proportionality. In practice, new rules are being designed for the larger enterprises, and then get scaled down for SMEs”.

“Inherently, this means that rules carry a bias against small size, which should be continually kept in mind by legislation-makers. Applying the rules should not hinder SMEs’ capacity to grow and create jobs”, Alfred Sant said.

Alfred Sant noted that more and more new rules are being needed to address a wide variety of global challenges from climate change to technological innovation.

“Inbuilt in the design of such legislation must remain the priority of helping SMEs become more resilient in the face of on-going challenges while minimising, simplifying and streamlining administrative requirements”. “I welcome the fact that the European Union seems to be applying more thoroughly its “think small first” principle”, Alfred Sant concluded.

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