SME Chamber

“Correct the imbalance and you will be surprised how much growth SMEs will create”

 Mr Farrugia EESC member and GRTU Director General was one of only 9 EESC members to be asked to speak during the EESC's 478th Plenary session and given specific time to address Joaquín Almunia, Commissioner for competition policy, European Commission 2010-2014, on the 23rd of February.


Mr Farrugia told the Commissioner that when it comes to State aid, we all know that it is a main source of unfair competition and most of the money goes to large enterprises. Therefore, we depend on the European Commission to enforce the needed control and to allow state aid only in clearly justified cases. Furthermore, state aid control does not work without monitoring and enforcement.

Mr Farrugia continued saying that we know that the Commission currently is preparing the review of many state aid regulations, of extreme importance for SMEs, such as Regional Aid Guidelines, R&D and Innovation Framework, de Minimis Regulation, etc. He also asked the Commissioner to disclose of the overall direction these reviews will go and if he is willing to reinforce State aid control after loosening it during the current crises?

The Commissioner replied that state aid is given out by Governments. He is conscious however of the point raised on ratios going to the larger enterprises as compared to small and micro enterprises in particular.

Under the New Guidelines that will be published next spring in fact he said that he is pushing so that those classified as the richest countries with 75% EU GDP will no longer get approval for any state aid to large enterprises as large enterprises in these countries have the means necessary to acquire funds within the money market and any state aid availability they have should go to SMEs who find it hard to obtain funding. In this connection also the De minimis clause will be amended and increased substantially, again to enable greater support to SME's. The push will be towards state aid that will correct the imbalance "but it is not an easy task. In this regard he called for the support of European and national level organisations as he admitted to be finding opposition from a number of Member States' Governments".

Mr Farrugia also criticised the fact that on the First European Semester launched by President Barroso said that unless reforms are immediately introduced to liberalise labour markets and make the single market more competitive and access to finance to SMEs easier, than growth will not be more than 1.5%. Now only the day before Mr Barroso had said that growth in Europe today will not be above "0"%. Vincent Farrugia asked is this not a certificate of failure in the Commission's and the Council's commitment for reform? Do we need a Mario Monti in Brussels too to get the necessary reforms in the countries where they are most needed? SME's are not afraid of reforms, we want reforms to grow. Mr Barroso also said that if each of the 23 million small businesses in the EU will employ just one person the 23 million unemployed in the EU will be employed. Mr Farrugia told Mr Almunia to correct the imbalance and he will be surprised what growth SMEs will create.

Vincent Farrugia also made a comment on Project Bonds as under the Connecting Europe Facility. It is not good money after bad money accumulated in national debts that we want but project bonds that finance the kind of projects that invest in sustainable growth and with great economic linkages with the greatest number of SME's.

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