Agreement on COSME gives €2B boost to small businesses

A preliminary agreement on a new Programme for the Competitiveness of Enterprises and SMEs (COSME) will see more than €2 billion allocated  with the aim of strengthening the competitiveness and sustainability of SMEs from 2014 – 2020.

“At this time of economic crisis and high unemployment in Europe, we must support our SMEs to unlock their potential for growth and job creation,” said Jürgen Creutzmann, German MEP and the Parliament’s lead negotiator. "SMEs make up more than 90 per cent of companies in Europe and are the backbone of our economy.” Improving access to finance and markets, whilst in parallel removing red tape, will provide the boost small businesses need, Creutzmann said.

First programme specifically for SMEs

Unlike the EU budget negotiations, which saw conflicting messages emanating from the institutions, it appears that Brussels is united in welcoming the COSME deal. Patrizia Toia, Vice-President and negotiator for the Socialists and Democrats (S&D) group in the European Parliament said, "For the first time in its history, the EU has a specific programme for SMEs.” Once it is operational, COSME will assist approximately 40,000 businesses each year. “This will help create about 30,000 jobs,” Toia claimed.

Toia says it was “impossible to convince the Council” to approve the budget proposed by the Commission of €2.5 billion, but she hopes that this original figure will be maintained in the final seven-year budget 2014-2020, currently being negotiated.

The package, which still awaits final Parliament and Council approval includes:

• Improved access to finance for SMEs including an equity facility to provide venture capital for start-ups through financial intermediaries and a loan facility to provide SMEs with direct or other risk-sharing arrangements to cover loans. These instruments will receive approximately 60 per cent of the COSME budget.
• Improved access to markets for SMEs through services provided by the Enterprise Europe Network
• Measures to improve entrepreneurial skills and attitudes

COSME is expected to contribute to an annual increase of €1.1 billion in the EU's GDP, according to Teresa Riera Madurell, MEP.  “This programme adds to our ongoing efforts with Horizon 2020, the research and innovation framework programme which strongly supports SMEs."

COSME and Horizon 2020 will together replace the current Competitiveness and Innovation Framework programme. Whereas Horizon 2020 will focus on company formation and start-ups, COSME aims to promote growth in all SMEs regardless of age.