Last week marked a noteworthy result in the political and institutional debate at EU level dealing with a possible reform of the EU legal definition of SMEs. After months of discussions in the European Parliament’s Committee on Industry, Research and Energy (“ITRE”), the latter adopted the so-called Pieper report on a Motion for a European Parliament Resolution “on the SME Definition” (rapporteur: Markus Pieper). It is now due to be voted in the European Parliament plenary before the summer recess, i.e. either in the June or the July plenary session.

Based on proposals for amendments by MEPs Patrizia Toia, Martina Werner and Jens Geier, a “compromise amendment” that partly integrated the concerns expressed by CEEP and its members was carried by the ITRE Committee. The entire vote session can be viewed here. This amendment’s exact wording (now part of the report) reads as below:

[The European Parliament] underlines that small local public service enterprises that meet the SME criteria fulfil important tasks for local communities and are deeply rooted in their local business environment and, inter alia, create the right preconditions for the growth of all other SMEs;

notes that having public ownership does not necessarily imply financial or regulatory support by the public entity due to national legislation, state aid laws and financially weak public entities;

therefore, encourages the Commission to conduct a study on the impacts of the definition on publicly owned enterprises which are financially independent, organized under private law or are operating under competitive conditions with private companies

Following this vote, the Pieper report now explicitly highlights the positive impact of Local Public Services Enterprises (LPSEs) on EU economies and societies as well as the EU SME definition’s current shortcomings in that it fails to tackle the challenges (for example in administrative and financial terms) LPSEs face along with all private-sector SMEs. Another important result is that this draft report of the European Parliament now mentions the very notion of LPSEs and the important role they play.

However, a welcomed success, this vote is only a step in a parliamentary process that will carry on until the plenary vote on this report. Moreover, it is appropriate to consider this report as a political signal as it can only lead to a Resolution, i.e. not a legislative but rather a political act, by which the European Parliament expresses its position on a specific issue. This is not (yet) about changing EU legislation. Moreover, CEEP remains strongly committed to raising public awareness on the added value for EU citizens and economy of revising the SME definition in a way that addresses these shortcomings, thus pleading to go beyond a study investigating the issue of LPSE exclusion from the SME definition.

The conference “Who will be a Small and Medium-sized Enterprise in the future?” (scheduled to take place in the premises of the European Committee of the Regions (CoR) on 5 June) shall provide the next opportunity to feed into public discussion and make the case for a more inclusive SME definition in EU law. This event has been jointly organised by CEEP and its partner organisations GdW and VKU and will feature prominent speakers including CoR President Karl-Heinz Lambertz, MEP Markus Pieper and the Chair of the CEEP Public Services Board Thierry Durnerin (please find here the draft agenda).

Please feel free to contact Alexis Le Coutour, CEEP Policy Officer on Public Services, for any further question.

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