Europe often speaks about competitiveness. We speak about innovation, investment and economic growth. Yet too often, the reality experienced by businesses across Europe tells a different story.
Many entrepreneurs do not struggle because they lack ambition. They struggle because they face increasingly complex administrative requirements, reporting obligations and regulatory burdens that consume time, resources and energy that could otherwise be invested in growing their business.
This is particularly true for companies that are successful enough to grow beyond the traditional definition of a small or medium-sized enterprise, but are still far from being large multinational corporations. For years, many businesses have found themselves trapped in what could be described as a regulatory grey zone.
The moment they outgrow SME status, they are often required to comply with obligations designed for significantly larger companies, creating barriers that can discourage expansion rather than encourage it. This is why the recent political agreement reached on the European Union's Omnibus IV package is an important step in the right direction.
As Shadow Rapporteur for the Socialists and Democrats Group in the European Parliament's Economic and Monetary Affairs Committee, I worked to ensure that simplification remains focused on helping businesses grow while safeguarding fairness and maintaining confidence in our markets.
At the centre of this agreement is the creation of a clearer framework for Small Mid-Caps. These are companies that have successfully expanded beyond SME thresholds but still face many of the challenges associated with smaller businesses.
The objective is straightforward. If Europe wants companies to innovate, invest and create quality jobs, then Europe must ensure that growth is rewarded, not penalised. The agreement introduces targeted simplification measures that reduce unnecessary administrative burdens while preserving important protections for investors, consumers and financial markets.
It also improves access to capital markets by making it easier and less costly for growing businesses to raise finance. For many companies, particularly those seeking new investment opportunities, access to finance remains one of the biggest obstacles to expansion.
By simplifying prospectus requirements and improving access to SME Growth Markets, the agreement helps businesses focus on growth rather than paperwork. However, simplification must never come at the expense of smaller enterprises.
Throughout the negotiations, one of my priorities was ensuring that SMEs continue to receive the support and protections they deserve. Small businesses represent the backbone of the European economy. They account for the overwhelming majority of companies, create jobs in our communities and drive local economic activity.
We cannot create a system where larger companies compete under the same conditions as smaller family-run enterprises when accessing support schemes or funding opportunities. Fair competition requires recognising that businesses face different realities depending on their size and resources. The final agreement achieves that balance.
For Malta, this discussion carries particular importance. Our economy is largely made up of small and medium-sized enterprises. Many of our most successful businesses aspire to grow, export and compete internationally.
Yet they also face unique challenges linked to scale, insularity and access to finance. European legislation must acknowledge these realities. If we want a stronger European economy, we must create an environment where businesses are encouraged to take the next step, invest in new technologies, enter new markets and create better opportunities for workers. Competitiveness is not achieved by lowering standards.
It is achieved by ensuring that regulation is proportionate, effective and focused on delivering real value. The Omnibus IV agreement demonstrates that Europe can reduce unnecessary bureaucracy while maintaining transparency, accountability and market integrity.
These objectives are not contradictory. In fact, they reinforce one another.
A competitive Europe requires dynamic businesses. Dynamic businesses require room to grow. And growth requires rules that support ambition rather than constrain it. The challenge ahead is to continue building a European economy that rewards entrepreneurship, promotes innovation and creates prosperity that is shared across all regions and communities.
That is the kind of competitiveness Europe needs. Not competitiveness for its own sake, but competitiveness that delivers opportunities, resilience and wellbeing for people and businesses alike.
Thomas Bajada is a Labour MEP