Delivering on our promise
Commentary by Kay Swinburne MEP, Vice-Chair of the Economic and Monetary, Affairs Committee, European Parliament, ECR
Looking through this year’s publication of 1000 Companies to Inspire Europe, the numerous small and medium-sized enterprises that feature once again highlight the diversity and strength of the SME sector in Europe.
These companies and their merits – their creativity, innovation and momentum – should be celebrated, and I applaud LSEG for once again showcasing them to a wider investment audience.
As policymakers, we now need to deliver on our promise of a deeper Capital Markets Union (CMU) – improving the access to finance and diversity of funding options, and providing a risk-resilient system.
With agreements reached on an enhanced venture capital framework, a simplified prospectus regulation, and a new, incentivised class of securitisation, we should be encouraged. But, more importantly, we should be emboldened to push on.
Still more needs to be done to ensure that Europe is a globally competitive environment. Improvements such as increased supervisory cooperation, further promotion of international consistency, the standardisation of insolvency law for investors or a rebalancing of our tax laws – which currently favour debt over equity financing – all need to be made.
Furthermore, we must address our sceptical attitude towards the investor, which is especially harmful in relation to SME financing. There needs to be a move away from regarding these investors with suspicion and to recognise, as happens elsewhere in the world, the role they play as the driving force in our economy. Only with this understanding can we implement the CMU and ensure that Europe’s savers become Europe’s core investors.
We must hold this mindset as we move into the review period of many key pieces of post-crisis legislation and admit where past decisions need to be challenged. The European Market Infrastructure Regulation (EMIR) review for example, needs to focus on finding solutions to the unintended consequences and un-necessary burdens placed on those smaller non-financial companies interacting with financial markets.
Much has changed in the 12 months since the publication of the first edition of 1000 Companies to Inspire Europe. However, as this year’s report testifies, the central role that SMEs play in the success and modernisation of the European economy remains a consistent message.
Europe needs to ensure that these 1000 small companies, and the thousands of others that do not feature, are afforded the opportunities and the right environment in which to thrive.