The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a draft report (dated 13 May) and motion for a European Parliament resolution on improving access to finance for SMEs and scale-ups. The motion for a resolution has regard to various recent European Commission (EC) communications, including on the Savings and Investment Union (SIU) and competitiveness compass, and other key publications and reports such as the Draghi report and Letta report.
It then calls on the EC to take action in a number of areas, including:
- Reducing bureaucratic and regulatory burdens. To reverse the trend of many start-ups and scale-ups relocating outside the European Union, the EU must go beyond current simplification efforts. The EC is urged to ease regulatory burdens—especially for SMEs—by reassessing frameworks like sustainable finance and introducing proportionality thresholds.
- Unlocking private capital and savings. The EC's plan for an SIU must balance EU-level action with support for national initiatives, including tools and best practices. To boost capital markets, it should enhance investor protection and access to information, promote simplified retail products and improve financial literacy. The EC is urged to introduce flexibility in implementing Basel III so as to ensure more lending is made available to SMEs and scale-ups. The report notes that appropriate flexibility could free up financing capacity and boost competitiveness vis-à-vis other jurisdictions in this regard. In addition, ECON requests flexibility in the securitisation framework to allow credit institutions to provide further funding to companies and support their growth.
- Bridging the funding gap for scale-ups. Many EU businesses turn to non-EU venture capital and markets to scale, while SME failures are rising. To address this, the EU must mobilise institutional investors and expand venture capital. The EC is called to strengthen co-investment platforms and promote simple retail investment channels. Building a connected innovation ecosystem is also key to supporting scale-ups.
- Reinforcement of a competitive ecosystem in the EU. The EC is urged to create voluntary and complementary frameworks that support Member States, in respect of subsidiarity, clarify what the proposed 28th legal regime consists of and develop practical EU-wide guidelines to help SMEs and scale-ups navigate varying legal systems across the EU.
[View source.]
