Reform of Structural Funds: Vince Farrugia appeals for a clearer inclusion of SMEs

During his intervention at the EESC Economic and Monetary Union, Economic and Social Cohesion (ECO)Section at the discussion on the legislative proposals for laying down common provisions on the various regional, cohesion, agriculture and structural funds (ERDF, ESF, ECF, PSEI, EGTC, CF, EAFRD and EMFF) Mr Farrugia raised the following points:

Implement the Small Business Act and its principles "Think small fist" and "Only once";

Article 5 of the General regulation of the governance partnership is one of the keys to the success of cohesion policy. One should 1) guaranty the participation of economic and social partners and representatives of various categories of SMEs at all levels, particularly for operational programmes and partnership contracts; 2) ensure its implementation by Member States and the Regions.

Grant a margin of flexibility for regions to enable them to take action on specific target audiences in specific situations;

Give priority to long term and continuous development of all types of SMEs, irrespective of their market, including nearby markets, not only the competitiveness of innovative companies and internationalisation.

Measures to support mentoring and counselling, tangible and intangible investment, particularly in training and activities of intermediary organisations acting for different categories of SMEs;

The performance reserve is counterproductive if it encourages investment policy in infrastructures with immediate effect instead of growth policies based on more sustainable investments in human capital, the effect cannot be measured in the long run.

Administrative simplification: complete or specify the proposed measures 1) by drafting texts that require harmonised implementation and where managing authorities see no margin in the interpretation of these texts.

Interpretation, 2) more clearly defining the rules for inspection and audit, the criteria for applying the principle of proportionality as well as the rules of payment and payment delays.

Overall Mr Farrugia stated that he welcomed the proposals for the general regulation and the specific regulations for structural funds 2014-2020. They represent a positive step forward which should allow a better involvement of SMEs in the cohesion and the development of territories. Other specific proposals included:

European Social Fund ESF: 1) support initial and continuous vocational education and training, 2) support long term and continuous development and transfer of businesses, not only the creation of enterprises, 3) facilitate access of young people to the labour market, 4) promote the adaptability of business leaders 5) not limitation of the choice to four investment priorities but set priorities in consultation with social partners, 6) simplified costs for 50 000€ and 100 000€ on EU co-financing not only for public financing 7) formally maintaining ensure the existence of the ESF Committee.

Cohesion fund: Support tangible and intangible investments, including training, adaptation to climate change, including for SMEs and micro enterprises.

Rural development EAFRD: 1) Open the consulting services to SMEs and intermediary organisations and involve SMEs and micro- enterprises 2) reserve to SMEs and micro enterprises the assistance to beneficiaries other than farmers 3) aim to support processed goods directly transformed into consumption goods 4) support the transformation in the form of local industries involving agricultural and non agricultural activities 5) provide assistance to non- agricultural processors, not only to primary producers 6) promote local industries involving producers, processors and retailers of non farming SMEs, not only to farmers 8) ensure that all types of aid apply by the rules of competition and do not distort competition between identical activities carried out by farmers and non-farmers.

Vincent Farrugia has already presented these proposals verbally during the Section meeting and will present them formally in writing to the EESC Rapporteur.