New EU Commission initiative to support SMEs

New EU Commission initiative to support SMEs

By Ingemar Pongratz


The European Commission has recently communicated their plans to provide support to European entrepreneurs and to European Small and Medium Sized Enterprises (SME) in Europe in the form of a New EU Commission initiative to support SMEs. The European Commission recognized the large amounts of innovative ideas that are available in Europe and the large number of entrepreneurs that are trying to develop these innovative ideas into commercial products and services.

However, the European Commission recognizes that many of the early stage companies fail at early stages or alternatively new pass the idea stage.

In addition, the EU Commission points out that European entrepreneurs do not take advantage of the opportunities that the Single European Market brings to small enterprises and do not always consider Europe as a suitable location to launch new ideas and new companies.

To correct this problem the European Commission is developing a new set of actions to support European innovation.


The European Commission is aware that access to early stage funding, in the form of investment capital is lacking in Europe. To support at least partially the need for early stage risk capital the European Commission will establish a “Pan European Venture Capital Fund of Fund”. The strategy is that the EU Commission and the European Investment Bank will provide up to 400 million EUR to fund this Fund and it is expected that private sources will provide at least 3 times more, which would translate into 1.6 billion EUR capital dedicated for European SME’s. This fund would complement the funding available through for example the Horizon 2020 Research and Innovation scheme and the EFSI fund.

The European Commission is also working on simplifying and reducing the administrative burden of for company owners who want to expand their operation from the national to the European stage. This would include a simplification of the VAT system, help with navigating the regulatory system in Europe and other administrative legal support.

Furthermore the Commission is planning to introduce the Startup Europe network, which would work on improving and increasing the number of incubators where investors, researchers and entrepreneurs can meet and exchange ideas.

Other activities include also the legislation that, if it is approved, would provide support European SME to financially restructure and prevent bankruptcy. Interestingly, this ideas include the possibility for entrepreneurs to be discharged of their debt after a three year period if their initial ideas are nor successful.

Taken together, these are interesting ideas and demonstrates the European commitment for innovation and economic growth. These ideas will of course be discussed and we can expect a lively debate in the months to come.

Ingemar Pongratz is a EU consultant who helps Universities, enterprises and other organizations to apply for public funding.  Ingemar Pongratz established Fenix Scientific AB / Pongratz Consulting to help organizations apply for funding from European sources such as the Horizon 2020 scheme. If you have plans to apply and need help to develop the proposal we are happy to assist you. Please use the online contact form or send us an email so that we can discuss your needs.

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