The European Small Business Alliance (ESBA) welcomes the partial general approach on the Programme for the Competitiveness of Enterprises and small and medium sized enterprises (COSME) which was agreed upon today by the Competitiveness Council. It sends a clear message that SMEs are in fact the key drivers for growth and competitiveness, which should be supported when and where possible. However, the budget allocated to COSME is small. ESBA calls on the Institutions to seriously consider the COSME budget during the Financial Framework discussions and allocate to it a budget that reflects the importance of the programme.
ESBA particularly welcomes the notion of allocating a minimum of 55% of the COSME funds to financial instruments, the fact that business transfers have been included in the provisions, the introduction of regular oversight structures and the fact that particular attention is given to micro enterprises.
ESBA warns however that the provision to allocate the budget of the financial instruments to both a debt and equity facility on the basis of demand from the financial intermediaries should be treated with caution. Only a fraction of micro and small businesses benefit from equity financing. Although the inclusion of mezzanine finance, seed capital and Business Angels is an improvement compared to the original Commission proposal, ESBA stresses that venture capital as a small business solution is still overestimated and more attention should go to realistic tools which are closer to small businesses, such as loan guarantees.