Macroeconomic problems for SMEs
Both in Poland and throughout the European Union, there is inactive a dominant belief that large companies, and in peculiar global companies, attest to the strength of the country's economy. This view, frequently expressed in the context of the current problems of these companies, is spread by the media, which further strengthens it. Meanwhile, micro-, tiny and medium-sized enterprises (SMEs) are importantly more crucial to the economy of the European Union, accounting for about 99% of all registered companies, providing about 2 thirds of private sector jobs and employing around 100 million people in 27 EU countries. In Poland, the SME sector is besides the cornerstone of the economy, covering 99.8% of all companies (2.3 million companies), generating 45.3% of GDP and employing almost 7 million people.1.
In 2008, the European Union's gross home product accounted for about 94% of US GDP. By the end of 2024 it is only about 50% (and a steady downward trend is seen). Critical observers rightly say that the reason for this is the overregulation of the European marketplace with large barriers to entry, the deficiency of real community and economical integration, including in peculiar the deficiency of a common capital marketplace and a full open marketplace for the exchange of services between associate States.2. alternatively of nurturing and developing the economical community and supporting investment in investigation and development, the European Union has focused in the last fewer years on political integration and ideological and worldview issues. All EU policies for innovation and economical development, although right in principle, stay on paper only, dying in the thick of idle discussions between politicians and officials and increasingly fresh reporting obligations on European companies.
Of course, the problem for European businesses is not simply a bureaucratic and over-regulated EU policy, which, among another things, results in rising labour costs. another harmful events from the past 5 years, related to the COVID-19 pandemic and the outbreak of a full-scale war in Ukraine, specified as the collapse of many SMEs due to lockdowns, broken supply chains, changes in labour marketplace organisation, inflation and rapidly rising energy costs, should besides be seen. This has resulted in the bankruptcy of many European companies and exodus European companies outside the EU. Only in Germany alone in 2024, as many as 3.5 1000 companies moved partially or entirely to the United States. Among them were known companies specified as BASF, which locates a investigation centre in China, as well as Siemens, which moves an crucial part of its production to China, the USA and India.3. Another negative aspect is besides the ending demographic dividend of both Poland and another countries of Central Europe that are members of the EU. The ageing populations in the region, wage pressures and costly labour marketplace regulations are already clearly dynamizing this process.
The European Union has focused in the last fewer years on political integration and ideological and worldview issues. All EU policies for innovation and economical development, although right in principle, stay on paper only, dying in the thick of idle discussions between politicians and officials and increasingly fresh reporting obligations on European companies.
Unfortunately, business migration outside Europe (seen since the 1990s) seems to proceed in the following years. Changes or at least adjustments will be subject to only the reason for specified transfers – previously linked to the processes of global liberalisation and free trade, and now with emerging trends in protectionism and customs taxation restrictions, which can be observed even in the first decisions of president Donald Trump's fresh administration in the US. These actions aim to reindustrialise the US economy and return to national industrial production, dominated in fresh decades by a widely defined service market. In this context, the explanation that the “capital has no nationality” was spread respective years ago is now rapidly broken down4. Importantly, these trends are not just the domain of American economical policy. They besides appear within the EU itself, where the boards of global corporations (sometimes against the financial results) callback the home country's majority shareholder.
In this situation, the question arises: will the European Union (as a whole) be able to take action to defend its interior marketplace from the temptation to break the free movement of persons and services between Community countries? The sad experience of Polish transport companies (most SMEs) so far may rise serious concerns. Moving on: will the European Commission be determined adequate not to succumb to China's economical pressure, aggressively exporting their products to the European marketplace (the fresh major problem of electrical vehicles), and the United States' pressures to impose economical restrictions, with simultaneous political force in the context of a possible reset of relations with the Russian Federation? These challenges and barriers hit peculiarly tiny and medium-sized enterprises, which, on the 1 hand, are cut off from abroad outlets and, on the another hand, their existing trading partners, as subcontractors or subcontractors, are forced to search fresh customers in their local markets. At the same time, they do not have, as in the case of large enterprises, human or capital resources that make it easy to find customers, e.g. in abroad markets.
Will the European Union be able to take action to defend the interior marketplace from the temptation to break the free movement of people and services between Community countries? Will the European Commission be determined adequate not to yield to the economical force of China, aggressively exporting its products, and the force of the United States to impose economical restrictions?
Exports as a key origin for SME growth
Support for SMEs remains 1 of the priorities of EU cohesion policy. How and what European tiny and medium-sized companies could compete was discussed in Budapest in November 2024 at the yearly SME Assembly organised by the European Commission. peculiar attention has been paid to issues related to the export policy of specified companies. erstwhile analysing the data of this sector, it can be concluded that most tiny and medium-sized EU companies do not export but only sale on their home market. Both national and Community export support instruments focus mainly on large companies that can effectively lobby for their interests. At the same time, it was noted that tiny and medium-sized enterprises that decide to open up to export activities are more stable, more crisis-resistant and more profitable. However, they must take a number of actions typical of large companies, specified as surveying the abroad marketplace mark and analysing the legal conditions of the local labour marketplace or electronic sales platforms.5.
The assistance of national and EU institutions should in peculiar be targeted at the above needs of SMEs. The fact that SMEs in our country are mainly companies with Polish capital remains here. Thus, supporting their export capacity can aid to reduce the dependence of home trade on global corporations. specified activities can be carried out through, among others, a preferential offer of insurance, loans and export guarantees, a mandatory strategy of economical associations, manufacture training, selection of counterparties among the State Treasury companies and legal protection against large companies. The current organization support strategy for Polish exports of tiny and medium-sized enterprises seems to be expanded, although inactive insufficiently effective.
It includes entities at both national and regional level, specified as Bank Gospodarstwa Krajowego (BGK), the Export Credit Insurance corp (KUKE) and the Polish Agency for Enterprise improvement (PARP). Examples of regional export support are programmes implemented by provincial authorities. For Lower Silesia it is, among others, the task "Going Global 4.0 – Internationalization of Lower Silesian Enterprises", which funds the participation of local companies in global economical missions and fairs6.
What about the Green Deal?
The request for a fast transition of the Green Revolution to green evolution is becoming clearer before the European Union, as stressed by Mario Draghi, erstwhile president of the European Central Bank, in a study prepared on behalf of the European Commission entitled "The future of European competitiveness"7. EU climate policy has been implemented for decades and the CO trading system2 (ETS) was created in 2005. The European Green Deal is recognised as the most ambitious socio-economic strategy in EU history, the main nonsubjective of which is to bring the continent to climate neutrality by 2050. The implementation of this superfluous idea, consisting of economic, social, digital and environmental transformation, of the geopolitical challenges of fresh years and the failure of another major global players, in peculiar the US and China, to accomplish equally costly climate targets has become a major challenge. So far, the EU has tried to convince associate States that this is not a cost but a cost-effective investment in the future. Unfortunately, the reality reveals the weakness of this position. This strategy leads to investments in jobs in China, which mostly finance the production of decarbonisation equipment with European capital, e.g. monopolizing the planet marketplace for photovoltaic panels. This is besides noticed by more and more entrepreneurs. In 2017, 40% of Polish and 41% of EU companies saw a dependency in the fact that environmental measures reduce production costs. In 2021, these results fell to 29% and 31% respectively.8.
A key negative effect of EU climate policy is the increase in energy prices, which influence production costs and increases the price of goods and services and consequently reduces the ability of European companies to compete with non-EU companies. Additional regulations and administrative burdens require large investments, especially in the energy and industrial sectors. These changes lead to deindustrialisation, relocation to regions with little restrictive regulations or buying products from countries that do not gotta bear specified costs. Electricity prices for tiny and medium-sized industrial customers in the EU between 2021 and 2023, compared to the average 2014-2020, have increased by as much as 97% and gas prices in Europe are now up to 5 times higher than in the US. Poland is facing a dramatic choice – by 2035 Bełchatów Power Plant is to be decommissioned, providing 20% of the country's energy needs. At this point, unfortunately, there is no sensible plan for replacing coal energy sources within the deadlines required by the Union.9.
The request to rapidly turn the green revolution into a green evolution is becoming clearer for the European Union. The answer is the Clean Industrial Deal. Clean Industrial Deal), published by the European Commission in late February 2025. It provides: actions to reduce energy costs for consumers, complete the energy union and attract investment and prepare for possible energy crises in Europe.
The EU's consequence to the increasing request for Green Deal correction is to be Clean Industrial Governance. Clean Industrial Deal), published by the European Commission in late February 2025. It provides: actions to reduce energy costs for consumers, complete the energy union, attract investment and prepare for possible energy crises in Europe. However, the fresh programme does not decision distant from the core objectives of the Green Deal and underlines the request to accelerate the decarbonisation of manufacture and advance low-carbon technologies and the circular economy, reducing natural materials consumption and maximising the life cycle of products10.
How to finance innovation and investment by SMEs?
Apart from the widespread European problems with commercialisation of research, the EU's R & D expenditure alone, at an average of 2.2% of GDP (the 2022 data), puts it behind major global competitors specified as the US (3.5% of GDP) and South Korea (4.9% of GDP). And although countries specified as Germany, Sweden and Austria accomplish importantly higher rates (over 3% of GDP) in the Union itself, unfortunately, a number of another countries disagree importantly from this average. The unsavory consequence comes from Poland, with expenditure of about 1.3% of GDP and structural problems in the quality of teaching, investigation and cooperation on the university-industrial lines11.
An crucial barrier to demand-side SMEs is the deficiency of adequate cognition of the availability of financial support instruments and the intellectual concern of many entrepreneurs against borrowing, most frequently justified by the overall adverse economical situation. tiny and medium-sized entrepreneurs consider the quality and stableness of regulation as a prime component of development, which is characterised by developed marketplace economies. Only later is the issue of hard access to capital and the request to have a long and good credit history. However, contrary to appearances, according to the EU institutions, lending to tiny and medium-sized businesses is importantly lower hazard to the banking sector than another marketplace segments. An crucial initiative in this context is to take transparent and simple securitisation action by European supervision, which can encourage banks to lend tiny businesses and reduce the cost of financing12.
Small and medium-sized entrepreneurs, and in peculiar start-ups, are eager to benefit from public backing (mainly from their preferred EU grants). These companies can besides number on cooperative banks, which supply about 17% of loans to SMEs, and on a wide offer of reverse financing offered by regional improvement funds, with funds returning to the voivodships from the EU financial perspectives for the years 2007 to 2013 and 2014-2020. 1 specified fund is the Lower Silesian improvement Fund (DFR), which belongs to the Government of the Lower Silesian Region and manages a pool of funds now exceeding half a billion zlotys. The DFR offer includes in peculiar debt instruments, re-guarantees and capital investments on a joint venture basis.
Deregulation
On 29 January 2025, the European Commission announced the "Compasse of Competitiveness for the EU" – a fresh strategy, a partial consequence to the problems raised, among others, in Mario Draghi's report. This programme outlines a way of improvement for Europe, based on innovation and strengthening the Single Market. It points to the request for regulatory simplification, and the integration of sustainable improvement into competitiveness policy is seen as an essential component for the future growth and prosperity of the EU.13.
This coincides with the economical plan announced by Prime Minister Donald Tusk, presented under the motto: “Poland. Year of breakthrough”. An crucial component of the speech of the Prime Minister at the office of the Stock Exchange, in addition to announcements of actions strengthening investment processes in the Polish economy, was the deregulation proposal aimed at Rafał Brzoski, who was present at the event. InPost's founder was faced with an ambitious challenge to rapidly prepare projects to destruct unnecessary legislation.
The fresh Competitiveness Compasse for the EU shows the request for regulatory simplification and the integration of sustainable improvement into competitiveness policy is seen as an essential component for the future growth and prosperity of the EU. This coincides with the announcement of the Polish economical plan under the motto: “Poland. Year of breakthrough”, which includes the deregulation of unnecessary legal provisions. The direction of specified actions should be carefully looked at, hoping for a affirmative effect.
Apart from the awkwardness of the presence in the government's structures as a typical for deregulation and economical dialog (established in February 2024), the direction of specified actions should be carefully looked at, hoping for a affirmative effect. Over-regulation, bureaucracy and thicket of frequently mutually exclusive regulations are 1 of the problems of the Polish system, limiting economical freedom. These work should be guided by the call for compliance with the EU principle, according to which the implementation of each fresh regulation is accompanied by simplification of the law elsewhere, or possibly even more ambitious American model, where any fresh regulation introduced by the presidential administration must replace 2 existing ones.
1 Data for 2021; see Mr Zadura and Others, Report on the state of the tiny and medium-sized enterprises sector in Poland, PARP, Warsaw 2024, https://www.parp.gov.pl/component/ publications/publication/report-on-state-sector-small-and-medium-enterprise-in-Poland-2024 [online access].
2 Overregulated Europe loses a geo-economic race, ‘Financial Observer’, 30.09.2024, https://www. financial observer.pl/thematics/macroeconomics/economic trends/regulated-europa-loser-geoeconomic-race/ [online access].
3 Ibid.
4 See Lecture and visit of prof. Leszek Balcerowicz to our company, 14.11.2014, https://jg.ue.wroc.pl/competition_o_1_million/3339/exposition_i_visit_professor_leszka_balcerowicza_in_our_company.html [on-line access].
5 SME Assembly, European Commission, https://singlemarket-economy.ec.europa.eu/smes/sme-strategy-and-sme-friendly-business-conditions/sme-assembly_en#the-sme-assembly-2024 [Online access].
6 Going Global 4.0 – Internationalisation of Lower Silesian Enterprises, Marshal's Office of the Lower Silesian Voivodeship, https://umwd.dolnyslask.pl/udza/wspolpraca-z-foreign/going-global-4-0/ [online access].
7 "We will not be able to immediately become a leader in fresh technologies, a symbol of climate work and an independent player on the planet stage. We will not be able to finance our social model. We will gotta limit some, if not all, of our ambitions," warns Mario Draghi, erstwhile president of the European Central Bank; see. The future of European competitiveness: study by Mario Draghi, European Commission, https://mission.europa.eu/topics/eu-competition/draghi-report_en [on-line access]. P. Zadura and Others, study on the State of the Sector...
8 P. Zadura and Others, study on the State of the Sector...
9 Bełchatów Power Plant to close. "A threat to 18 000 jobs", ‘Money.pl’, 20.12.2024, https:// www.money.pl/economy/electricity-belchatov-to-close-risk-for-18-thousand-place-working-710522417664a.html [on-line access].
10The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation, European Commission, Brussels, 26.02.2025, https://commission.europa.eu/topics/eu-competition/clean-industrial-deal_en [on-line access].
11 B. Quaopatnicks, Europe of Innovation – how the European Union builds its future, ‘Financial Observer’, 27.02.2025, https://www.financial observer.pl/thematics/macroeconomics/ethne-economics/europa-innovation-like-Union-European-building-its-future/ [online access].
12 EU financial instruments at the Micro, tiny and average Enterprises Forum 2024, National Contact Point for Financial Instruments of the European Union Programmes, 6.07.2024, https://financial instrumentsue.gov.pl/2024/07/06/financial instruments-ue-on-forum-funding-micro-small-and-medium-entrepreneursw-2024/ [on-line access].
13 EU competitiveness compass, European Commission, 30.01.2025, https://poland.representation.ec.europa.eu/ news/EU-compass-competitiveness-2025-01-30_en [on-line access].
