SME Europe’s Economic Leadership Forum: Coordinating and Leading Europe’s Economic Debate
Date: 29 April 2025
Location: EPP Congress, Valencia
SME Europe Economic Leadership Forum gathered our Board Members and partners to discuss how SMEs can take a central role in restoring Europe’s competitiveness, driving innovation, and strengthening economic sovereignty.
The forum was opened by Jörgen Warborn MEP, President of SME Europe, who delivered a frank assessment of Europe’s competitiveness challenges. He admitted that Europe had failed to protect its business environment and argued for urgent reforms. According to Warborn, the top priorities must be cutting the regulatory burden—what he described as “drastic deregulation”; solving energy cost crisis by expanding energy supply including nuclear, and finally realizing the full potential of the EU Single Market. These changes, he insisted, are necessary to empower businesses to grow, innovate, and generate high-quality jobs. He concluded by stressing the importance of placing SMEs at the center of European economic strategy.
Marion Walsmann MEP followed with an opening statement that challenged the regulatory consequences of the Green Deal. She said that overregulation and legal uncertainty are undermining entrepreneurship and called for a return to a genuine market economy rooted in trust, initiative, and simplification. Walsmann noted that despite promises of tools such as the SME Test, SME Passport, and Competition Checks, SMEs still face burdensome bureaucracy and fragmented support. She urged the EU to prioritize practical implementation over aspirational declarations.
Sari Rautio, Member of the European Committee of the Regions, reminded participants that while decisions may be made in Brussels, implementation happens locally. She emphasized the importance of subsidiarity and regional cooperation, urging decisionmakers to “think small first.” Rautio advocated for improved access to finance for SMEs, SME-friendly procurement, and efforts to combat unfair competition from non-EU countries. She also stressed the role of regional innovation hubs and cross-border networks in connecting local businesses to EU-wide opportunities.
Horst Heitz, Secretary General of SME Europe, then presented a strategic outlook titled “A Systematic Approach to EPP Economic Policy.” He highlighted the EPP’s unique position as the only political family with a dedicated SME business organization, and emphasized the need for more consistent SME political structures across member states. Heitz pointed to Austria’s highly organized SME political community as a model. He noted that although SMEs comprise 99% of EU businesses—and 98% of them are microenterprises with fewer than 10 employees—many policy conversations still focus disproportionately on mid-sized companies. He called for tailored communication strategies that both celebrate Europe’s most innovative SMEs and address the concerns of everyday small business owners. The EPP, he argued, must strengthen its coordination and messaging if it is to effectively represent the full SME spectrum.
The first panel, “Cutting Red Tape and Stopping Bureaucracy in the EU,” featured Jörgen Warborn MEP, Niels Flemming Hansen MEP, Angelika Winzig MEP, Aura Salla MEP, and William Elofsson, Vice-Mayor of Gävle. The panel emphasized that despite recent progress, regulatory costs continue to weigh heavily on SMEs. Proposals included replacing the “one-in, one-out” principle with a more ambitious “one-in, two out” approach. The speakers supported a target of reducing regulatory costs by 25% overall and by 35% for SMEs. They pointed to excessive reporting obligations and diverging national implementations of EU law as major sources of uncertainty.
Harmonizing the single market, attracting risk capital, and facilitating labour mobility were seen as essential next steps. It was stressed that without reforms to decision-making—such as introducing qualified majority voting—Europe would remain too slow to act. Speakers also noted that scale-up companies often relocate to the U.S. due to a lack of funding, talent, and regulatory clarity in Europe. Talent attraction must begin locally, with schools, municipalities, and universities forming part of a broader ecosystem to support the workforce of tomorrow.
Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, delivered the inaugural keynote. She laid out the EU’s new five-year competitiveness agenda, structured around three pillars: closing the innovation gap, pursuing decarbonization without undermining growth, and reducing dependencies on non-EU suppliers. She announced a forthcoming “fitness check” of all digital legislation, along with a simplification Omnibus focused on cybersecurity and data. She revealed plans for a Digital Identity Wallet for businesses to streamline cross-border operations and regulatory compliance. Virkkunen emphasized the need to help SMEs adopt artificial intelligence by offering regulatory clarity, service support, and access to infrastructure such as supercomputers and AI “factories.” Only 30% of European companies currently use AI, she noted, and SMEs in digitally advanced countries like Denmark are far ahead. The EU, she said, must reduce the complexity of AI rules and foster a more accessible ecosystem.
The second panel, “Staying a Global Champion: Research, Innovation, Start-Ups, Digitalization and the Green Transition,” featured Marion Walsmann MEP, Iuliu Winkler MEP, Commissioners Henna Virkkunen, and Ekaterina Zaharieva. The discussion focused on the structural weaknesses in Europe’s innovation landscape, including low private investment, fragmented internal markets, and rigid procurement systems. The panel advocated for more cumulative and realistic impact assessments, particularly for programs like Horizon Europe. There was consensus that Europe must not over-regulate emerging technologies prematurely and must provide the space for innovation to grow before regulating it. While Europe has one of the best-educated populations globally, it continues to suffer from a shortage of engineers and tech specialists. Addressing these gaps, and building a more cohesive innovation ecosystem, is critical for competitiveness, and successful implementation of the green and digital transitions.
The third panel, “Strengthening Europe’s Position in Security and Economic Stability,” brought together Aura Salla MEP, Sunčana Glavak MEP, Commissioners Andrius Kubilius, and Magnus Brunner. They emphasized the need to open up defence financing to SMEs and to modernize the EU’s fragmented defence industry. Lessons from Ukraine—where deregulation and startup agility have delivered rapid innovation in areas like drones—were cited as models. Panelists discussed the €800 billion “Rearm Europe” program and the emergence of more SMEs in defence as signs that a new industrial dynamic is forming. Stronger cooperation among EU member states and with global partners was seen as essential for addressing not just traditional military threats, but also cyberattacks, disinformation, and strategic resource dependencies. A call was also made for more inclusive security planning that connects trade, migration, and digital policy with defence strategy.
The final panel, “Europe at a Crossroads: Adjusting to Global Trade’s Shifting Currents,” featured Iuliu Winkler MEP and Jörgen Warborn MEP. They reaffirmed the EPP’s commitment to a rules-based global trade system, rooted in WTO norms. Responding to growing accusations of protectionism, the panel emphasized that the EU remains a predictable and reliable trading partner. At the same time, it must protect European workers and SMEs from unfair competition. Trade-related jobs, they noted, tend to be better paid and more secure. The key to maintaining credibility in global negotiations is unity—only by speaking with one voice can Europe effectively promote its interests. The panel highlighted the need to diversify trade partnerships, especially with Mercosur and Southeast Asia. Finally, the speakers underscored a major untapped opportunity: only 600,000 of Europe’s 25.6 million SMEs export beyond the EU. Trade must be seen not as an obstacle to sustainability, but as a strategic enabler of prosperity.
