December 3, 2021

The following is a press release:

The European Committee of the Regions (CoR) stressed within the opinion adopted by unanimity at the Plenary Meeting on the 2nd of December, that the European Commission's report on competition policy 2020 must be followed by bold acts. The EU should take the needs of SMEs into account to create a fair and level playing field for the benefit of all EU citizens, considering the implications of the pandemic and the consequences of substantially increased amounts of state aid. Therefore, any COVID-19-related aid should be granted only to businesses that are experiencing the immediate financial impact of the pandemic.

The rapporteur Tadeusz Truskolaski (EA/PL), Mayor of Bialystok, stressed: "EU competition policy is essential for the smooth and effective functioning of the European Single Market. Its existence is a test for the European Union's unity, a test of the ability to negotiate and to understand the situation and the expectations of all citizens of the EU."

The opinion drafted by Truskolaski points out that the objectives of the EU competition policy should take particular account of the needs of SMEs and create a fair and level playing field for the benefit of all EU citizens. The CoR highlights the need for transparent, socially, economically and environmentally responsible state aid rules to avoid the uneven and inefficient distribution of resources. Therefore, any COVID-19-related aid should be granted only to businesses that are experiencing the immediate financial impact of the pandemic. The opinion asks that temporary financial measures to respond to the pandemic should not be used by inefficient companies that are not committed to the EU's climate goals or are in the process of bankruptcy or major restructuring, so long as these processes had already begun before the pandemic.

Local and regional leaders would rather encourage the creation of mechanisms to facilitate functioning of European economy in times of economic downturn as a result of different types of crises (as in the case of the COVID-19 pandemic), but reducing the share of direct funding that artificially disrupts market relations.

CoR members stress that a level playing field for businesses in the Single Market is crucial especially for SMEs, for innovation, development of green technologies and sustainable job creation. SMEs must have clear support from the European institutions in foreign markets including actions against potential boycotting of Member States' products and services on the global market.

The CoR welcomes the European Commission's proposal for a Digital Markets Act, and call on the Commission and Member States to step up their efforts to promote technology transfer, especially to less developed, peripheral regions and islands. The Committee meanwhile highlights the restricted access of consumers to full online information on products and services due to the limited number of available digital ecosystems and platforms, with low availability of translations into national languages. Moreover, the opinion warns, consumers have insufficient control over their own data and digital identity, with consequent risks for data protection.

The CoR points out that the European digital transformation process requires action to be taken against monopolistic structures. Therefore, the Digital Markets Act should stop gatekeepers from engaging in illegal practices to gain a competitive advantage. Through the opinion, local and regional authorities criticise the fact that the costs incurred from competition penalties are passed on to consumers, ultimately making EU citizens the only victims.

More information:

In June 2021, the CoR adopted an opinion on the Digital Services Act and the Digital Market Act (rapporteur Rodi Kratsa, EL/EPP), which supports the European Commission's intention of tougher regulation of digital markets and services while at the same time highlighting the innovations and competencies cities and regions may bring to bear for sound and effective rules. You can find the press release here.

Last month the European Committee of the Regions opened applications for the 2023 edition of the European Entrepreneurial Region (EER) award. Under the overarching theme "Entrepreneurship and resilient communities", cities, regions and municipalities can submit strategies on how they plan to support SMEs over the next two years. The application deadline is 29 March 2022.

More information on the European Entrepreneurial Region award, including a list of the previous winners since 2011, can be found here.

Contacts:

Ella Huber

Tel. +32 (0) 2 282 2373

ella.huber@cor.europa.eu

Matteo Miglietta

Tel. +32 (0)2 282 2440

Mobile: +32 (0)470 895382

matteo.miglietta@cor.europa.eu