Daniel Gueguen

All creatures big and small…

One has a certain nostalgia for the days of DG Industry, known as ‘DG III’. Back then, in the years between 1986 and 1992, the focus was on building the Single Market with the help of many directives, and DG III was the engine. The question of whether or not DG III was acting on behalf of large companies rather than SMEs was not an issue, because lobbying was essentially done via European trade associations, especially (but not only) with regard to food. Following two phases of negotiation at national then European level, the relevant EU association lobbied the Commission as the single representative for the whole sector, big and small. The result: consistency, discipline, respect and great success with the arrival of the Single Market on 1st January 1993.
In the 2000s, DG III became DG ENTR. In terms of lobbying, things changed radically. EU enlargement and the increasingly strategic nature of EU issues weakened the influence of sectoral European associations, which drifted from clear leadership towards a lowest common denominator approach. This drift favoured large companies at the expense of small ones. But DG ENTR remained an important player; first of all, because deepening the Single Market was still a priority, but also because DG ENTR took on a transversal role, actively seeking consensus from other DGs on vital issues like standardisation, environment and REACH. DG ENTR was known for its active role in inter-service consultations. Thus, though it did things differently, DG ENTR – like DG III – proved itself to be a defender of business in general, not just big business.
A DG GROW and a Commissioner living up to their responsibilities

Under the Juncker Commission, DG ENTR adopted the name ‘DG GROW’ and took on wider responsibilities. It still deals with the internal market, industry, entrepreneurship and SMEs, but has gained competence over other issues, such as cosmetics regulation. At the same time – in contrast to its expanded activity – DG GROW has lost control (particularly in inter-service consultations) over a number of important files, most notably Circular Economy (now with DG ENV), standardisation (now with DG CONNECT) and ETS (now with DG CLIMA). Having said that, DG GROW keeps a tight hand on the major sectors such as the automotive one, even though the growing importance of ICT in vehicles is creating a spirit of competition with the services of Commissioner Oettinger, who was in charge up to now.
However, coming back to big and small business, one has the feeling that the Commission is stuck in a Brownian motion. On one hand, the political message is clear: SMEs are extremely important to the European economy as they are by far the main job-creators. We see countless statements from Commission leaders – especially Mr Timmermans, the First Vice-President – in favour of reducing administrative burden for SMEs, easing their access to capital markets and taking account of their unique features. We see countless seminars, debates, declarations and communications regarding SMEs. Nobody can accuse the Commission of not caring about them.

Putting words into action

But between words and actions, there is a chasm. EU policy in the Barroso er<a was openly liberal, even ultra-liberal. This was more the case for Barroso I than Barroso II. When it took office, the Juncker Commission seemed intent on returning to the original spirit of the Lisbon Strategy; in other words, a combination of economic, social and environmental priorities – a three-part approach clearly beneficial to SMEs. But in reality, EU policy has favoured big business. Let’s limit ourselves to three examples:

  • The extraordinary complexity of EU procedures is not capable of being mastered by SMEs,
  • The Commission’s failure or difficulty to put in place specifically adapted policy measures for SME and the promotion of entrepreneurship into sectoral policies, including those policies directly managed by DG GROW, e.g. the complex independent automotive supply chain, the challenges for SMEs in the context of ETS or circular economy;
  • The EU’s trade policy, geared towards global competition, has the effect of favouring big players whilst marginalising SMEs.

Effective promotion of entrepreneurship and promoting the crucial role of SMEs as the specificity and strength of the European economy, requires real impetus from the responsible Commissioner and a genuine will to take action on concrete files that are currently on the table. So what are we waiting for?

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  1. Backbones as the EC loves to refer to SMEs in terms of the economy are tricky to care for properly. DG ENTR made much of its SME Envoy and SME week etc. It was all meaningless bluster. Backbones are generally better off being left alone…

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