EU SME policy: "We demand a halt to bureaucracy"

MEP Markus Pieper talks about EU SME policy in recent years and needs for the future.

This article is part of the special topic Bureaucratic madness in the craft industry

Markus Pieper (CDU/EVP) has been a member of the European Parliament. The founder of the Parliamentary Group for Small and Medium-Sized Enterprises in Europe (PKM Europe) looks back on the SME policy of the last five years and evaluates the current measures is EU Commission.

Mr. Pieper, you founded the European Parliamentary Group for Small and Medium-Sized Businesses. What have you achieved for the skilled trades in the last five years?
Beeper: Fundamentally, there is certainly increasing sensitivity to SME concerns in the EU Parliament. This is also thanks to the strong voice of the skilled trades organization in Brussels. We now have a good 80 MEPs from 17 countries, organized across party lines. Most are in the EPP with the CDU/CSU, but RENEW has also had an "SME Task Force" since the end of last year. These are positive developments because we systematically review legislation relevant to SMEs and submit proposals across party lines. Therefore, the European Commission will think twice about re-examining access to regulated professions to such an extent that the master craftsman's certificate is jeopardized. On the contrary, the positive developments towards equating the bachelor's degree with the master craftsman's certificate are receiving support from the Commission and Parliament. The fact that the dual system of vocational training is a benchmark is also evident in its inclusion in EU structural funding for similar projects in other countries.

During the current legislative period, the coronavirus crisis management surrounding operating aid has also been successful. However, the dominant theme is and remains the reduction of bureaucracy. Key issues include energy legislation, where we think from small to large; data regulation for better data access for skilled trades and SMEs; the Supply Chain Directive, where we must not hand over small businesses to large ones; the Packaging Ordinance, which concerns the recognition of proven take-back systems; pay transparency, where equal pay between men and women must take the situation of family businesses into account; and minimum wages, in which Europe must not interfere at all. While we have achieved improvements for the skilled trades across the board, all this legislation is being enacted at once, sometimes without coordination and with duplicate reporting requirements. This bureaucracy is ill-suited to these difficult times.

How do you assess the EU Commission's recent measures, namely the SME relief package and the plan to reduce existing reporting requirements by 25 percent? Given the multitude of burdensome proposals currently on the table, isn't this too simplistic?
Beeper: For two years, we, the SME politicians, have been calling for a halt to bureaucracy. We reiterated our demands this year in the SME resolution of July. Indeed, many of these demands are reflected in the SME relief package presented by the Commission in September. For example, posting workers will be easier in the future thanks to digital support. The move to a digital tool for data entry using the once-only principle, which also applies to other legislation, could be a game changer. The Late Payment Directive and the simplification of international tax returns are also positive, but require the "Germany Check," which we are currently introducing through amendments.

The postponement of the industry standards for sustainability reporting (CSRD) is at least a positive sign. However, companies already have to comply with the general requirements, which is difficult enough. Indeed, the EU Commission is still not sufficiently addressing the fact that too much legislation is coming at once. It fails to recognize the cumulative burden. Supply chain, taxonomy, and CSRD make sense. Who wouldn't want to make their business more sustainable?

But this can only be implemented if it doesn't entail additional bureaucracy. Our core demand is therefore, first and foremost, a significant increase in the company size limit for the application of new legislation. To avoid the bureaucracy being passed on to the skilled trades, we need pilot tests for new legislation in a very small number of sectors. And where new laws do come into effect, they must be linked to new services. This means entering data only once, or providing assistance with certification along the supply chain, for example, through national and international chambers of commerce.

Crafts and SMEs have often been off the radar during this legislative period, partly due to the crisis. How do you intend to change this for the next five years, and what message will you take into the upcoming European election campaign?
Beeper: One positive aspect for the future is that the future SME Envoy will have a direct line to the top of the Commission, which will improve coordination and prevent certain issues from even seeing the light of day in legislation. And I expect that duplicate reporting obligations, caused by the seemingly parallel work priorities of different Commissioners, will be a thing of the past.

However, we need an even stronger corporate perspective in European legislation. The motto for the next five years is: Think Small First and discontinuity. It sounds theoretical, but it means that much more realistic impact assessments are needed for the EU Commission's legislative proposals. The "Regulatory Scrutiny Board," which has been responsible for this task up to now, must be upgraded to a genuine regulatory review board, independent of the EU Commission. This board, as in Germany, must be responsible for calculating bureaucratic burdens and reviewing European competence. This demand will also be discussed in the run-up to the European elections. Just like our concern for discontinuity. This means that legislative procedures must be completed within one legislative period, otherwise they expire. That would be half the battle in terms of reducing bureaucracy.

Despite all my justified anger, allow me to make one final remark: Open borders, a common currency, common technical standards, and trade agreements that treat imports and exports from 70 countries more favorably than WTO rules are, after all, a perfect market-based basis for reducing bureaucracy. And the Green Deal and more sustainable supply chains are also positive, especially in a global context. However, we must not overburden businesses. To achieve this, the European level must once again pay more attention to companies and craft organizations. Small and medium-sized business politicians will strongly demand this.

Source: ZDH

DHB now also digital!Simply click here and register for the digital German Crafts Journal (DHB)!