Last December’s strong vote in favour of the SME Strategy that I led on behalf of the S&D Group in the European Parliament was surely a positive day and a fitting outcome for the months of hard work that went into it.

And yet, the vote itself was only just the beginning of our next and most important goal — that of implementing Europe’s Strategy for Small and Medium-sized firms in an effective and far-reaching way.

My resolve, of course, is now to up the ante and work even harder to see it through.

At a webinar held last Tuesday on the role of state aid rules in the post-Covid recovery of maritime and insular regions, which was co-ordinated by the European Parliament’s Intergroup on Seas, Rivers, Islands and Coastal Areas (SEArica) in tandem with the Conference of Peripheral Maritime Regions, I voiced my position on the matter in the strongest of terms.

The Covid-19 pandemic has plunged Europe into one of its worst economic crises ever. The negative impact has been a highly asymmetrical one at both the territorial level and across economic sectors. The pace of the recovery is itself expected to be uneven.

Regional disparities, alongside the existing social and economic ones, are likely to rise.

Maritime and insular regions stand out among those that have been hit the hardest — this is due in large part, to the specialisation of their economies, which often includes heavy reliance on tourism, as well as their insularity in terms of geographic location.

In view of this I insisted, during my address, on the need for a permanent increase of de minimis thresholds, as well as for more flexibility and due consideration for the natural disadvantages that Europe’s islands, and the businesses that operate from them, continue to experience today.

I also called for a frank discussion on the role of State Aid Rules in the current economic crisis that is affecting the entire continent in the wake of the pandemic.

Here again, I pressed for more flexible State Aid rules - on a more permanent basis - with regard to transport. This in order to ensure that the criteria do begin to properly take into account the local specificities of transport even between islands, and hence helping to overcome the disadvantage of location that small islands have to endure.

Permanent disadvantages, I argued, require lasting solutions. On this crucial principle, the special situation of islands should be recognised and addressed once and for all.

I also raised an important query about the moment when the derogation allowed by the State Aid Temporary Framework in response to Covid-19 is over.

What will happen to the economies of Europe’s islands when this time actually comes? This, I believe, is why a phase-out period is of the essence — one during which the progressive and gradual return to a new normality must be ensured.

I stressed, moreover, upon the need that short-term aid measures be taken with a view to a long-term strategy — a strategy that is tailored to the particular drawbacks that islands are going through in terms of their connectivity and competitiveness.

Such a strategy will need to put a proper focus on the strategic sectors of islands, such as sustainable tourism and transportation. This is itself an important reason why more flexibility is needed when it comes to state aid.

In my address I also took the opportunity to insist that sustainable tourism does not only mean hospitality, but encompasses different sectors that can contribute to the diversification of our local economy, which is mainly constituted of small businesses.

Sustainable tourism would, I believe, help spur innovation to enable a circular economy and clean mobility solutions, as well as help enhance initiatives in the field of landscape management and the enhancement of our cultural heritage.

The SEArica webinar was by far not the first occasion during which I was vocal on the strong support our SMEs need.

In the wake of the EP’s plenary vote on the European SME strategy in December, I have kept working to see it implemented — and to have its benefits reach the millions of businesses across the European Union, their employees and the families they sustain, including Maltese and Gozitan ones.

In January I also tabled a parliamentary question asking the European Commission to clarify the next steps in the actual implementation of the European Strategy for SMEs, asking for the adoption of more effective actions to reduce the administrative burden that small and medium-sized businesses still face today.

Furthermore, I urged the European Commission to address the structural drawbacks that affect island-based enterprises, with their geographic location being a main cause.

It was also in January that I met European Commission Executive Vice-President Margrethe Vestager and discussed the various obstacles that small islands like ours have to face.

With Vice-President Vestager I reiterated my commitment to place the policy for islands higher on the European agenda to ensure these receive the attention they deserve.

Almost a year ago, none of us was yet aware of the avalanche that was going to hit us — Covid-19.

We have kept up our effort of goodwill and hard work ever since, and eventually we will come out on the other side. For the time being we shall keep planning the way forward. I am confident that our daily tenacity is taking us a step closer to success.

 

Dr Josianne Cutajar is an MEP