Current EU competitiveness initiatives risk failing Europe’s SMEs due to persistent regulatory complexity and limited practical accessibility.
A simplified, binding “Competitiveness Contract” is needed to refocus EU action on everyday entrepreneurs, reducing red tape, tailoring funding and applying subsidiarity effectively.
As the EU enters a crucial new political cycle in 2026, looking ahead to the 2028–2034 budgetary framework, the air is thick with talk of competitiveness. The Commission’s 2028-2034 Multiannual Financial Framework (MFF), the European Competitiveness Fund (ECF), and the proposed 28th company law regime promise a bolder, more muscular industrial policy. Yet for the true engine of Europe’s economy - the 99% of businesses that are SMEs, employing two-thirds of the workforce - these initiatives risk becoming another layer of impenetrable bureaucracy. The recent Schumpeter Lectures at the 2025 SME Assembly, hosted by DG GROW, pinpointed the reason: Europe’s competitiveness is fundamentally built not by a handful of unicorns, but by its multitude of “everyday entrepreneurs.” These are the family-run manufacturers, local service providers, and traditional craft businesses that generate steady wealth, provide community-anchored jobs, and ensure social cohesion. The current policy trajectory, focused on scaling up and deep-tech innovation, largely overlooks them. Without a radical shift in focus, the next MFF will fail its core constituency.
The diagnosis from Europe’s Chambers of commerce, including networks like Italy’s Unioncamere, is consistent and damning. For the everyday SME, growth is stifled not by a lack of visionary strategy papers, but by the grinding reality of regulatory complexity, funding that remains difficult to access in practice, and an unevenly enforced Single Market.
The proposed European Competitiveness Fund could be a powerful tool, particularly as it seeks to consolidate a wide range of existing instruments. Yet consolidation alone will not guarantee accessibility. If the ECF reproduces the same labyrinthine application processes, reporting burdens, and implicit bias towards highly innovative or scale-driven projects that have characterised parts of EU funding in the past, it will continue to bypass the economic mainstream. We support the aims of the 28th company law regime to simplify cross-border operations. However, for a small bakery chain seeking to expand across borders, it risks becoming a theatrical half-measure unless it is accompanied by harmonised tax rules and a genuine reduction in compliance costs. The problem is not the number of tools, but their design: policy is built for the aspirational start-up, not the essential stay-up.
The imperative for the next MFF is therefore profound simplification and a recalibration of priorities. It must move beyond a catalogue of initiatives and embrace a logic of empowerment. This means: genuinely simpler and more flexible funding streams that allow national and regional partners to tailor support; a deliberate inclusion threshold within the ECF to ensure a significant portion of resources flows to established, non-tech SMEs; and a ruthless application of subsidiarity, enabling chambers of commerce - the trusted intermediaries - to bridge the gap between Brussels and the high street. The goal should be to ease the daily burden of doing business, not just to fund moonshots.
What emerges from this critique is not a plea for subsidy, but a demand for a new deal: a “Competitiveness Contract” between the EU and its SME majority. This contract would bind the institutions to measurable, time-bound deliverables: a 25% reduction in administrative red tape within two years; a legal ring-fence within the ECF for genuine SMEs, with a turnover threshold set meaningfully low to target the core of the economy, not the high-growth outliers.
This contract must also reframe strategic ambitions like digital sovereignty. For the everyday entrepreneur, sovereignty isn’t about building European cloud giants; it’s about access to affordable, interoperable digital tools enabling them to compete in a digital age.
The 2026 MFF negotiations are a defining test. Members of the European Parliament and national governments must reject cosmetic incrementalism and demand this binding commitment to delivery. Europe’s SMEs - its everyday entrepreneurs - are not asking for handouts. They seek a fair and simplified framework in which to thrive, invest, and employ. Deliver that contract, and the grand acronyms will finally have meaning. Fail, and 2028 will mark not the dawn of a competitive age, but the consolidation of a dispiriting disconnect.
Ana Sarateanu
Direttrice Unioncamere Europa