EU funds not being fully utilised to help struggling SMEs, Chamber says

Small and Medium-size enterprises (SMEs) are struggling while EU funds are not being fully utilized to help them, according to the Malta Chamber of SMEs.

Months have now passed since the first signs of the pandemic brought the economy to a halt, but things have not improved for SMEs. In a statement this morning, the Chamber said that weeks into the relaxation of anti-COVID-19 measures SMEs were telling it that they are in a worse situation than they were before, because business is either slow or non-existent while costs have continued to increase, threatening their existence.

“Much more help is necessary and the EU is giving Member States a carte-blanche to help businesses. In an aggressive stance that has never been seen before, the EU is giving out grants to Member States and asking them to save business with them.” 

“So far unfortunately as an SME Chamber we have no information that any such direct EU funds are being used to help businesses”

The available assistance schemes are not enough, it said, warning that employees will continue to be made redundant as the economy is stagnant and businesses perish. 

“This damage will take many years and hard work to recuperate. More must be done to rescue and preserve businesses in this delicate phase.”

The Malta Chamber of SMEs said it had been waiting for weeks for a scheme that will address the burden of commercial rental payments.

“Other EU countries have recognised the importance of addressing the current problem with commercial rents. These countries have understood that re-opening businesses as part of the relaxation of measures cannot happen without reducing the burden of rental

payments because business will be very slow for the time being,” said the Chamber.

Several weeks ago the SME Chamber had proposed a rent subsidy scheme based on the principle of burden sharing, which it said is very similar to other schemes implemented by other member states and ensures that rents adapt to current market realities while also adopting a system of burden sharing between the landlord, the government and the tenant. 

Such a scheme can be implemented as non-repayable grants under the recent state-aid rule possibilities, it said.

But rent is just one major concern for the Chamber, with other areas also requiring intervention.
The Chamber suggested that EU state aid grants could also be used to help sectors that have been left out of the wage supplement, help businesses with the necessary investments to become compliant with new health regulations, help to cover utility bills, “and all other running costs that businesses will take years to recuperate.” 

These measures would need positive economic campaigns and economic stimuli to help preserve the Maltese economy and restart it much earlier with less harm, said the Chamber.