International

The European Commission is currently revising the rules on state aids. In particular, it is to adjust the threshold beneath which state aids may be granted.

This is important to small businesses, because finance available to small- and medium-sized enterprises from banks is always inadequate. A member state may now offer EU loans with a five year term up to a maximum of €1 million. The SP has long advocated a National Investment Bank able to help out small firms. The government has repeatedly refused to address this, but at least now they will no longer be able to shift the blame to Brussels.

There are advantages to the internal market in that firms in Europe can more easily do business outside the frontiers of their own member state. At the same time, the Commission often wants to go rather further than this when it comes to laying down the law for the member states, being anxious about ‘protectionism’ and the undermining of a level playing field amongst them. In certain cases, such as in the grating of aid to major corporations, this is certainly justified. It has also to be recognised, however, that not every firm is interested in the internal market: small businesses are often active on the national level only, or at most – in the case of Dutch firms – within the Netherlands and a single neighbouring country. For such firms a level playing field is of far less importance.

Small and medium-sized enterprises have been complaining for years that they have insufficient opportunities to develop, simply because banks are no longer extending loans. The crisis has meant that banks must first of all bring their own resources up to scratch. Furthermore, they find lending money to small firms too risky. Yet small and medium-sized businesses are the motor of employment, often being also the most creative and the most innovative. For these reasons the government must not shove such firms to one side. As things stand it limits its support to an ‘innovation subsidy’, but for a start-up entrepreneur this is not always appropriate. So the opening offered by Brussels through a more flexible application of the rules on state aids is important. Admittedly, it could be better, particularly were the conditions less rigid, but the direction is clear: the Commission recognises the role of small and medium-sized enterprises as well as the role which member states can play in helping them. A good government would take up this challenge. Unfortunately we don’t – at least as yet – have such a government in the Netherlands.