Last Updated on Thursday, 14 September, 2023 at 6:28 pm by Andre Camilleri
This week the European Commission presented its long-awaited SME relief package. The Malta Business Bureau (MBB) welcomes the proposals in the new SME Relief Package aimed at helping small and medium-sized enterprises (SMEs) in Europe become more resilient and competitive but believes that more clarity is required on how commitments will be implemented to truly help SMEs overcome the challenges currently faced and to thrive in the years to come. The package includes measures to reduce the regulatory burden, boost SMEs’ long-term competitiveness, and strengthen fairness in the business environment. It is a good step forward in making it easier for SMEs to do business but needs more ambition to help them to grow and thrive.
In the past years, SMEs have faced several challenges, including the global pandemic, high inflation, supply chain disruption, skills shortages, and increasing regulatory burden.
Through the SME Relief Package, the European Commission introduces a Regulation on combating Late Payments. This regulation revises a current Directive setting binding maximum payment terms at 30 days for public authorities and business-to-business transactions. It will also make the payment of compensatory fees and interest legally automatic in case of late payment. The Commission believes this will help SMEs improve their cash flow.
Commenting on the new regulation concerning the Late Payments Regulation, MBB CEO Joe Tanti stated that; ‘’a culture of on time payment is essential, and shorter payment terms in business-to-business transactions helps the liquidity of SMEs. However, the law should also preserve freedom of contract and provide the flexibility for businesses to agree on bilateral terms according to their own circumstances.”
The European Commission in its package also plans to create an enabling business environment by reducing the regulatory burden for SMEs and simplifying administrative procedures, together with reporting requirements. It also proposes to strengthen the SME test, to appoint an EU SME Envoy, and improve access to finance for SMEs by increasing the financing guarantee under the InvestEU programme. It will also provide specific tools to help SMEs develop sustainable competitiveness skills such as apprenticeships and training schemes.
“The SME Relief Package is a positive step in the right direction but more needs to be done to support SMEs. The EU needs to build on this package by ensuring that financial support reaches SMEs, avoids introducing new regulatory burdens, increase access to markets and invest in skills and training. By taking these steps, the EU can effectively help SMEs continue to recover from the current global economic challenges,” Mr. Tanti concluded.