On the 28th of January 2026, an Evening Reception at the European Parliament was convened with leaders from the European Parliament, the European Commission, the private sector and the small businesses community to celebrate the resilience of Europe’s small business ecosystem and advance digital and sustainable innovation.
The event was hosted by Victor Negrescu MEP (S&D, RO), Vice-President of the European Parliament and featured the following sessions:
- A Fireside Chat named “Building Europe’s Future: Unlocking Europe’s Economic Growth and Competitiveness Through SMEs” between Jörgen Warborn MEP (EPP, SE) and Kelly Devine, President, Europe, Mastercard, moderated by Jennifer Baker, Master of Ceremonies;
- A TED talk titled “The Scaling Dilemma: Three Paths for the European Entrepreneurs” by Radka Dohnalova, CEO of ATAIRU, Co-Founder & CEO of Alaigned;
- A Panel Discussion titled “Investing in Resilience: Unlocking Finance for Europe’s Small Businesses”, moderated by Ondřej Kovařík, former MEP with the following distinguished speakers: Outi Slotboom, Director of Supply Chain Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission (DG GROW); Tomáš Václavíček, Policy Officer, Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission (DG FISMA); Cătălina Plinschi, Director of Operations of Fagura, small business representative and Mastercard Strive EU Innovation Fund Winner, and Kilian Thalhammer, Managing Director, Global Head of Merchant Solutions, Deutsche Bank.
- A second Panel Discussion named “Policy vs Practice – The SME Challenge”, moderated by Jennifer Baker, with the following distinguished speakers: Regina Doherty MEP (EPP, IE); Kristian Vigenin MEP (S&D, BG); Vladimir Prebilič MEP (Greens/EFA, SI); Gaspard Demur, Deputy Head of Unit, AI Innovation and Policy Coordination, EU AI Office, European Commission (DG CONNECT); Giuseppe Casella, EISMEA Head of Department for Innovation ecosystems, SMP/Entrepreneurship & Consumers; Giovanni Zazzerini, Secretary General at INSME – The International Network for SMEs, and Ray Pinto, Senior Director for Vertical Strategy and Business Development, DIGITAL EUROPE.
Jennifer Baker welcomed the audience and introduced the Mastercard Strive EU Programme, a pan-European initiative designed to support and equip small businesses with the tools and resources required for the twin transitions to a more digital and sustainable economy. She then highlighted the emphasis placed by the Draghi and Letta reports on the need to foster the competitiveness of the EU economy, recalling that SMEs are the backbone of European industry.
The Master of Ceremonies explained that the event aimed to explore the areas on which SMEs need to focus, as well as to showcase the innovators that have benefited from funding under the Mastercard Strive EU initiative. Jennifer Baker further clarified that Mastercard Impact Fund has invested a total of €4.5 million to solicit innovative projects across Europe, with the objective of supporting small businesses in enhancing digital skills, increasing cyber resilience, harnessing AI to grow their respective businesses, and unlocking access to financial services.
Jennifer Baker then invited Victor Negrescu MEP, Vice-President of the European Parliament and host of the summit, to deliver his opening remarks.
Victor Negrescu MEP began his address by explaining that he had chosen to host this reception as he believes that SMEs are not only the backbone, but also the heart of the European economy, which is shaped by millions of small businesses across Europe. He pointed out that millions of jobs exist thanks to SMEs and that the recovery of the European economy today is due, to a great extent, to the growth of SMEs. Indeed, the speaker explained that, when looking at the data, micro and small enterprises are those experiencing the strongest growth in Europe. He also expressed his appreciation for the support provided by large companies such as Mastercard in fostering innovation in Europe and stated that he had chosen to host this event to highlight the fruitful cooperation between EU institutions, SMEs, large companies and local stakeholders, which has helped to enhance the competitiveness of the European economy.
At the same time, MEP Negrescu warned of the need to be as pragmatic as possible. Recalling his past entrepreneurial experience in small companies, as well as his role within larger organisations, he explained that he had observed the challenges faced by small businesses in accessing EU Single Market in full. For these reasons, he stressed the need to understand how to best use new technologies to unlock the potential of the EU common market, how to make effective use of the trade agreements that Europe is negotiating, and how to ensure that Europe increases its competitiveness while continuing to develop its growth model. He further emphasised the presence of SMEs across all sectors, the importance of considering the needs of entrepreneurs seeking better integration, and the necessity of going beyond the Letta and Draghi reports.
He concluded by noting that, despite the current context, Europe still has a bright future ahead and can remain an industrial leader, highlighting that it is up to all stakeholders to identify the best way forward through a tangible, concrete and down-to-earth approach in order to see as many positive examples of SMEs as possible across EU member states.
Jennifer Baker then invited Michael Jaeger, Chief Executive Officer of the European Economic Senate (EES) and a member of SME Connect, to deliver his introductory remarks.
Michael Jaeger began his speech by advocating growth, entrepreneurial freedom and market-oriented solutions, and highlighted the importance of dialogue between private and public actors, without which Europe would not be able to generate new ideas or identify solutions to current challenges. He stated that, for this to occur, a culture of discussion must be fostered, with the European Parliament able to advocate for the most effective solutions beyond ideological lines, based on creative and intelligent proposals put forward by the European Commission.
He then stressed the need for SMEs to invest, grow and digitalise in order to remain competitive vis-à-vis foreign markets such as China and the United States. In this context, Mr Jaeger pointed out that Europe should simplify rules without compromising its core objectives, such as addressing climate change and advancing digitalisation, while also ensuring that SMEs have access to markets and the financing necessary to support innovation.
The Master of Ceremonies then invited Payal Dalal, Executive Vice President, Global Programs, Mastercard Center for Inclusive Growth, to deliver her introductory remarks.
Payal Dalal began by stating that no one could dispute the vital role that Europe’s small businesses play in creating jobs, serving local communities and bringing ideas to market. By contrast, she noted that we were often less familiar with the realities of being a small business owner. As the economy becomes increasingly digital, this challenge becomes even more complex, as small business owners must navigate new technologies, evolving consumer behaviours and rising expectations, she added. In this connection, she stressed that it is imperative for all stakeholders to join forces to facilitate the life of small business owners.
Ms Dalal then pointed out that small businesses sit at the intersection of multiple systems – namely policy, technology and finance, among others – and often experience them in isolation as these systems do not always communicate effectively with one another. She also explained that, for several years now, the Mastercard Center for Inclusive Growth has been working to help millions of small businesses around the world to exploit the advantages of digitalisation, access capital and build networks and know-how. In Europe, the Center has worked with over one million small businesses over the past three years to help them become more resilient and return to a path of growth, she emphasised.
By way of example, in Czechia and Poland, the Mastercard Center for Inclusive Growth partnered with hundreds of thousands of women-led small businesses to provide tailored financial services, digital tools and platforms, as well as mentorship and skills, enabling them to navigate their businesses with confidence. In Spain, she stated, it partnered with small hotels with fewer than 100 rooms to help them harness AI, leading to an increase in reservations, improvements in client networks and the optimisation of customer strategies.
Ms Dalal then turned to the Mastercard Strive EU programme, which aims to strengthen the European small business ecosystem. As previously mentioned by Jennifer Baker, the programme has invested €4.5 million across nine markets, including in countries such as Germany, Sweden, Belgium, France, Denmark and Romania. The programme seeks to help European small businesses access capital, strengthen cybersecurity, harness AI to increase revenues and save time, and navigate evolving consumer and policy expectations around the Environmental, Social and Governance (ESG) framework.
Ms Dalal concluded her remarks by referring to Mastercard’s European Snapshot Study, which surveyed 1,300 small businesses across the EU to understand their perceptions, priorities and concerns. She shared three insights from the study which she thought deserved attention. First, European small businesses clearly recognise the digital imperative, she said, as two-thirds of those surveyed considered digitalisation to be key to their future competitiveness, while three-quarters were planning to increase their digital investment. Second, she emphasised that the study found that this awareness does not always translate into action, as nearly 40% of small businesses were using only one digital tool or solution. Third, she highlighted that the uptake of AI and cybersecurity solutions remains low, with only one-third of surveyed small businesses using AI. Moreover, although more than half of respondents had experienced cybersecurity incidents, only 42% had adopted cybersecurity solutions, while 20% expressed no interest in cybersecurity at all, Ms Dalal concluded.
Following these introductory remarks, Jennifer Baker opened the fireside chat titled “Building Europe’s future: Unlocking Europe’s economic growth and competitiveness through SMEs”. She then introduced Jörgen Warborn MEP (EPP, Sweden), who participated in the discussion alongside Kelly Devine, and invited MEP Warborn to reflect on how central small businesses are to Europe’s ability to regain its competitive edge.
Jörgen Warborn MEP replied that SMEs are a crucial pillar of Europe’s competitiveness, while emphasising the need to remain optimist on this question. He observed that such a positive approach had been lacking during the previous legislative term, whereas the current term shows encouraging signs that the EU is moving in the right direction. He further noted that both the Letta and Draghi reports place strong emphasis on competitiveness, and that there is broad awareness that SMEs are essential if Europe is to change course.
Moreover, he referred to the “think small first” principle introduced two years ago, which he felt is no longer sufficiently applied. By contrast, he argued that this principle should guide the European Commission when shaping new legislation, so that legislation is designed with the realities of small businesses in mind. At present, he noted, EU legislation is often developed primarily for large corporations, with exemptions subsequently made for smaller ones. MEP Warborn therefore highlighted the need for a fundamental shift in mindset in order to address this imbalance.
The Master of Ceremonies then turned to Kelly Devine, asking to what extent this perspective resonated with Mastercard, and inviting her to elaborate on the company’s commitment to supporting small businesses in their digital transition across Europe.
Kelly Devine replied that this perspective resonated strongly with Mastercard, noting that discussions about SMEs typically focus on growth, jobs and innovation. However, she identified three additional reasons for which SMEs are critical to the European agenda. The first relates to specialisation as she explained that small businesses often address niche challenges that large companies may consider too minor to pursue. The second concerns diversity, as the diversity brought by SMEs can help mitigate certain risks faced by the economy. The third relates to SMEs’ contribution to their local economies. In this context, Ms Devine described SMEs as central to Europe’s growth agenda and integral to Mastercard’s own business model, which connects millions of businesses worldwide through its partners. As a large company, she added, Mastercard feels a responsibility not only to serve people through its products and services, but also to actively contribute to the broader ecosystem.
Jennifer Baker then asked Jörgen Warborn MEP what he considered to be the most critical gaps currently faced by European SMEs, and how these could be addressed swiftly.
Jörgen Warborn MEP pointed to skills shortages, regulatory burden, limited access to finance and barriers to trade both within and beyond the internal market which, he noted, has yet to become fully integrated. Based on his discussions with small business owners, regulatory burden consistently emerged as one of their top three concerns. He explained that regulatory requirements disproportionately affect small businesses, whereas large corporations are able to rely on dedicated compliance departments, lawyers or consultants.
While acknowledging that EU institutions need to take further action, MEP Warborn highlighted some recent positive developments. During the previous legislative mandate, the European Parliament encouraged the European Commission to adopt the “one in, one out” principle, whereby any new legislation introducing costs or administrative burdens for small businesses should be offset by equivalent reductions within the same sector. He noted that the European Commission’s Annual Burden Survey demonstrated that this principle has delivered results. Furthermore, in the week preceding the evening reception, the European Parliament voted in favour of the “one in, two out” principle, meaning that, for every euro of new burden introduced, two euros should be removed. For MEP Warborn, this approach represents a tangible way to reduce administrative burdens, and he expressed the hope that it would be implemented in practice. He concluded by stressing that policymakers now need the support of business owners to push the European Commission towards fully embracing the “one in, two out” principle.
The Master of Ceremonies then asked Kelly Devine which constraints most immediately limit the SMEs’ ability to invest, grow and compete at the pace they would wish, in her opinion.
In response, Kelly Devine identified three key barriers constraining SMEs’ ability to thrive. First, she noted that products are often not designed with the SMEs structure in mind, which was one of the reasons behind the creation of the Mastercard Strive EU programme. While there are businesses seeking to understand and address SMEs’ challenges, the programme aims to celebrate such innovators and support them in scaling their solutions.
The second barrier relates to cost, which is not solely financial, she added. For example, when a business seeks to digitalise, it must determine how to do so across all its functions and operations. The time required to navigate this process, together with the skills needed to manage it, can be overwhelming, as can the associated costs. She also highlighted how the Mastercard Strive EU programme seeks to address these challenges.
The third constraint concerns regulatory complexity, including what can be done to simplify it or, where simplification is not possible, how larger companies can share their tools and expertise with smaller businesses.
Jennifer Baker then turned to MEP Warborn to ask how SMEs’ difficulties in accessing capital could be alleviated.
Jörgen Warborn MEP replied that the EU initiatives on access to finance could take inspiration from some frameworks adopted in Sweden and emphasised that significant capital availability could be unlocked in Europe. In Sweden, he explained, most individuals invest their savings in stocks and funds, whereas in several other EU member states savings are largely held in bank or savings accounts. As a result, individuals miss out on the potential returns associated with capital markets, while businesses similarly lose opportunities in terms of access to capital.
He argued that, by incentivising individuals to invest their private savings, more capital would become available to finance both small and large companies, thereby sustaining economic activities. Drawing on the Swedish experience, he acknowledged that, while the necessary policy decisions can be taken with sufficient political will, the cultural shift required to make such a model effective would take longer to materialise. For this reason, he stressed the importance of acting swiftly, with banks and financial institutions playing a facilitating role.
The Master of Ceremonies then asked Kelly Devine what role she envisaged for public-private partnerships in unlocking the potential of small businesses and in achieving the broader objective of making European SMEs more competitive and future-proof, as well as how companies such as Mastercard and other technology firms could contribute most effectively.
Kelly Devine responded that companies such as Mastercard can contribute by helping to create the conditions for businesses to scale. From the perspective of a large company and the private sector at large, this involves bringing in technology, capabilities and resources to bear. She explained that the strength of public–private partnerships lies in their ability to bring these elements together to unlock broader societal benefits.
In this context, she referred to a recent commitment made by Mastercard in the area of cybersecurity, which aligned with the findings of the study previously mentioned by Ms Dalal. She then noted that, when SMEs experience cybersecurity incidents, around 50% ultimately fail due to the absence of adequate protective measures, while companies such as Mastercard possess significant cybersecurity expertise. The challenge, she explained, lies in scaling this expertise across a large number of SMEs in order to make a meaningful difference. Public–private partnerships, she concluded, could help consolidate and deploy cybersecurity capabilities in a way that reaches SMEs at scale and supports more sustainable growth trajectories.
Jennifer Baker invited MEP Warborn to offer a word of encouragement for programmes such as Mastercard Strive EU, or similar initiatives that he believed could be valuable to pilot in the future.
Jörgen Warborn MEP responded that Europe needs public-private partnerships to work together as a way forward. He recognised the need for a shift in mindset within EU institutions and among policymakers more broadly. Reflecting on the previous legislative mandate, he noted that the European Parliament had adopted a significant volume of legislation which, in his view, should have been approached differently. While acknowledging that the objective of achieving a sustainable society is both legitimate and important, he observed that some of the legislation adopted has increased costs for businesses and introduced high penalties for non-compliance.
He argued that EU institutions should rely more on incentives than sanctions, favouring a “carrot rather than stick” approach. In order to achieve a sustainable society, he maintained, EU institutions should support businesses and guide them through the transition. He concluded by stressing that EU legislators and businesses should regard one another as partners; by contrast, if they continue to work in opposition to each other in pursuit of sustainable growth and change, progress will be slower and tensions are likely to emerge, he said.
Jennifer Baker then invited Radka Dohnalova, Chief Executive Officer of ATAIRU and co-founder of Alaigned, to deliver her TED Talk titled “The Scaling Dilemma: Three Paths for the European Entrepreneurs”.
Radka Dohnalova introduced herself as a second-generation entrepreneur, explaining that her first venture, ATAIRU, became the leading leadership development company in the Czech Republic. At the same time, she acknowledged that the campaign did not have genuine scaling potential. For this reason, 14 months ago she decided to launch Alaigned, an AI-powered platform for head-to-head strategy, with the ambition of disrupting the field of strategy development.
She explained that Alaigned has now launched the first generation of its product, is supported by a valuable team, and is already working with 28 large organisations or enterprise clients. While she now considers Alaigned to have true scaling potential, she noted that, looking ahead, she faces a far greater challenge than anticipated: gaining access to capital at this stage in order to scale Alaigned into a truly European player.
Ms Dohnalova described herself as being at a crossroads, with three possible paths ahead. The first is the venture capital (VC) route. She explained that she spent three months last summer exploring this option, during which she engaged with several dozen investment funds. Through this process, she realised that VC funding is suitable only for a limited number of companies with unicorn potential. In this regard, she noted that in Europe approximately 100,000 companies and start-ups seek VC funding, yet only around 4% succeed in securing it. She questioned whether being part of the remaining 96% implies that a company is not worth building. While the VC ecosystem would argue that this is not the case, she remained convinced that what her team is building is valuable and worth pursuing.
The second path she described is bootstrapping, which is the route she is currently following. Entering the revenue stage in the fourth quarter of 2025 gave Alaigned confidence that the company is building something meaningful. She highlighted that this path has allowed her to avoid spending time on fundraising or investor discussions, enabling her to focus instead on the product, customers and impact. At the same time, she acknowledged the limitations of this approach. In particular, she stressed that building a globally competitive technology product ultimately requires investment. Moreover, having succeeded in assembling a highly experienced, world-class team, she realised that they had not joined her to build a purely local champion. She therefore recognised that remaining solely on the bootstrapping path could result in an average product, an average team and a limited local impact.
As a result, Ms Dohnalova explained that she is seeking a third path, one that differs from both traditional VC funding and bootstrapping. While she does not yet know precisely what this path will look like, she was clear about what she is seeking. Firstly, she stated that she is looking for access to capital that does not require the creation of a unicorn-style business case. She also outlined that Alaigned has a solid and ambitious growth trajectory and needs partners willing to support this vision without requiring her to devote excessive time to fundraising, administrative procedures or applications for support programmes, thereby diverting focus from building the company.
Secondly, she expressed the need for access to connections and expertise on how to crack the European go-to-market model, sharing her admiration for approaches that successfully transform local players into European champions. To achieve this, she stated her desire for support structures that are easily accessible to entrepreneurs. She concluded by noting that many other European entrepreneurs are facing similar challenges at this critical stage of growth.
Jennifer Baker then invited former MEP Ondřej Kovařík to moderate the panel discussion titled “Investing in Resilience: Unlocking Finance for Europe’s Small Businesses”. The panel featured the following distinguished panellists: Outi Slotboom, Director at the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission (DG GROW); Tomáš Václavíček, Policy Officer at the Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission (DG FISMA); Cătălina Plinschi, Director of Operations at Fagura, small business representative and Mastercard Strive EU Innovation Fund winner from Romania; and Kilian Thalhammer, Managing Director and Global Head of Merchant Solutions at Deutsche Bank.
Ondřej Kovařík opened the panel by asking Outi Slotboom what the EU could do, beyond the Savings and Investments Union, to improve access to finance, and whether there were specific instruments or policy frameworks she wished to highlight.
Outi Slotboom acknowledged that access to finance remains one of the main challenges facing small businesses, noting that the smaller the company, the more difficult it is to secure financing. She explained that SMEs in the EU rely heavily on bank lending, while market-based and equity instruments remain underdeveloped compared to those of the EU’s main competitors, often prompting companies to scale outside the EU. She also highlighted that female entrepreneurs face additional barriers in accessing finance.
Ms Slotboom noted that the InvestEU Programme has mobilised approximately €200 billion in private financing for SMEs, with around 50,000 SMEs having already benefited. She added that the European Commission hopes to expand and strengthen the programme within the framework of the next Multiannual Financial Framework (MFF). She further explained that InvestEU includes a dedicated instrument aimed at supporting female entrepreneurs, which could be further enhanced if the proposal for the next MFF is approved.
Ms Slotboom then drew attention to the issue of late payments between businesses. She explained that the European Commission’s analysis found that companies pay approximately 40% of their invoices late, placing a significant burden on SMEs in particular. She referred to studies indicating that around 25% of bankruptcies are caused by small businesses not being paid on time for goods or services delivered, with payment delays sometimes extending for several months or even up to a year. She further observed that the larger the company, the more pronounced the issue of late payment tends to be.
She cited a 2024 study by the French National Bank, which concluded that late payments in France had an impact of €17 billion on companies’ balance sheets. Extrapolated to the EU level, this figure would amount to approximately €100 billion per year, she clarified. In parallel, a Joint Research Centre study found that, for every day by which payment times are shortened, a company’s cash flow improves by 1%. Ms Slotboom concluded by recalling that the European Commission had put forward a proposal to strengthen the current legislation on late payments, which is currently stalled in the EU legislative process. She noted that the European Commission remains open to discussing alternative options, publishes annual reports through the EU Late Payments Observatory, seeks to raise awareness of the issue, and works with Member States to improve enforcement of payment rules.
The moderator then turned to Cătălina Plinschi, asking her, in addition to the points raised by Outi Slotboom, what she saw as the main challenges in accessing finance in the EU and, from the perspective of a growing small business, at which stages access to finance most often breaks down.
Cătălina Plinschi began by presenting the Fagura platform, which was founded several years ago in Moldova, later expanded to Romania, and is planning further expansion into additional markets this year. She explained that Fagura is a crowdlending platform that connects SMEs in need of funding with investors. Its target audience includes SMEs that require financing but are not eligible for bank loans.
Ms Plinschi explained that Fagura seeks to address structural challenges related to SMEs’ access to capital by providing them with growth financing at the moment they need it most. First, the platform focuses on SMEs that are excluded from traditional bank lending, where financing decisions are largely based on collateral rather than cash flow, which many SMEs are unable to provide, she noted. By contrast, Fagura connects SMEs with investors who, in addition to financial data and audits, also consider the growth potential of the businesses they support, she added.
She then addressed a second structural challenge, namely bureaucracy. On this note, Ms Plinschi explained that Fagura can provide access to capital within seconds, with eligibility assessments taking up to ten seconds and funds being transferred within a matter of hours. This is made possible through integration with multiple registers and databases, as well as the use of AI to rapidly assess SMEs’ financial situations. This approach also significantly reduces the administrative burden on SMEs, limiting the need to complete extensive paperwork for banks and other institutions. She referred to a study indicating that SMEs spend, on average, 35% of their time completing questionnaires for such actors. Ms Plinschi concluded by emphasising that access to finance for SMEs must be as fast, efficient and tailored as possible.
Ondřej Kovařík then asked Tomáš Václavíček to outline, from his perspective and that of DG FISMA, the main challenges to private finance for small and medium-sized enterprises across the board.
Tomáš Vaclavíček replied that DG FISMA recognised that SMEs and other small companies require better access to capital, particularly the more innovative ones. For these businesses, access to venture growth capital is five times more limited than in the United States, which poses a significant challenge given that innovative companies are considered the engine of future EU economic growth, and capital serves as the “fuel” enabling them to scale across the Single Market. DG FISMA has identified this issue as a priority under the Savings and Investments Union (SIU) and collaborates with other Directorates-General, notably DG GROW and DG RDT, to address access to capital and related challenges, he highlighted.
He also mentioned that the Commission also acts on other relevant barriers, such as access to talent and data infrastructures.
Within the SIU framework, DG FISMA has recognised the need to shift focus from savings to investments, as EU citizens’ savings are often not used in the most productive way, he clarified. Accordingly, he continued, the first pillar of the strategy is to mobilise retail savings into the capital markets, notably through the savings and investments account blueprint. The strategy is structured around several levers, including integrating capital pools in the EU markets and unlocking capital from institutional investors. Mr Václavíček then mentioned ongoing Commission initiatives, including the Market Integration and Supervision Package, the EU venture and growth capital funds reform and exploratory work on facilitating private equity exits.
The moderator then welcomed Kilian Thalhammer and asked him when public incentives and private capital could best connect to support SME scaling, and whether he could provide examples from his experience.
Kilian Thalhammer replied that it is often too broad to refer to “SMEs” in general, given the diversity of enterprises and their differing stages of development, which makes it difficult for banks to offer standardised products. He noted that large financial institutions such as Deutsche Bank cannot adjust models, processes and approaches overnight. Concerning lending and access to capital, he agreed on the need to offer alternatives to traditional loans, while also making it easier and more attractive for banks to lend to SMEs, so they can make informed choices about clients. Lending is simpler for mid-cap and large-cap segments due to collateral availability and established processes, he argued. However, he added that the SME segment is highly attractive as a portfolio, representing a distinct type of business. From a banking perspective, partnerships can make serving SMEs more viable and appealing.
Ondřej Kovařík then returned to Outi Slotboom to ask how regulation could shift from merely protecting the system to actively enabling investment in small businesses.
Outi Slotboom emphasised that the “think small first” principle has been in place for decades, ensuring that legislative proposals are drafted with Europe’s 30 million SMEs in mind, rather than only large enterprises. She described this as an ongoing cultural shift, noting that the European Commission has now reached a turning point by placing strong emphasis on simplification. In the past 12 months, significant reductions in administrative burden have been achieved for SMEs in areas such as reporting to banks, due diligence and corporate social responsibility. Beyond financial reporting, the Commission has adopted a target to reduce administrative burdens arising from EU law by 35% for SMEs. Ms Slotboom concluded by underlining that European businesses can only compete effectively if they are not constrained by overlapping laws and excessive reporting obligations.
The moderator then asked Kilian Thalhammer whether any solutions could be designed to address the SME market and support companies in scaling up.
Kilian Thalhammer replied that, when discussing SMEs, a portion of them are non-lendable. He explained that solutions are needed to make it easier for banks to provide financing to SMEs. He also highlighted the significant potential from a lending perspective, given the large number of SME clients for banks. At the same time, he noted that this represents the greatest challenge compared to other financial products.
The moderator then asked Tomáš Vaclavíček whether, aside from the forthcoming venture capital framework under the SIU, any other relevant measures were expected in 2026.
Tomáš Vaclavíček replied that the SIU venture capital framework is indeed the main measure anticipated, but the European Commission is also working on growth capital funds, as outlined in the European Commission’s 2026 Work Programme. He explained that the initiative aims to mobilise more capital and encourage EU investment fund managers to scale operations across the Single Market. He also highlighted that a public and targeted consultation on this initiative is ongoing, with responses accepted until the 12th of March.
He added that DG FISMA remains fully focused on implementing the SIU, having already delivered most of its actions in the autumn. Some of these measures are directly implementable, while others – most notably the Market Integration and Supervision Package – will require negotiations with the European Parliament and the Council. The package seeks to address fragmentation in EU capital markets, he said, and added that another proposal relates to supplementary pensions, aiming to scale the funding of pension systems and unlock contributions for equity, investments, and venture and growth capital. Additional measures are being developed for insurers and banks to improve the investment climate and facilitate the flow of capital, the speaker concluded.
Ondřej Kovařík then asked Cătălina Plinschi what recommendations she would make to EU policymakers to improve access to finance over the next three to five years, from a company perspective.
Cătălina Plinschi replied that five years is not a particularly long period, but she hoped that by then policymakers would embrace concepts such as embedded finance and open finance. She emphasised the potential for alternative financing companies to partner with banks, as the former cultivate the banks’ future clients, namely SMEs that could eventually access larger loans to grow their businesses. She also pointed out that the valuation of OpenAI exceeds the total venture capital investments in European start-ups, yet European savings accounts show a very different reality. She concluded by expressing the hope that Europeans would help small companies find solutions to access the finance they need.
The moderator closed the panel discussion by inviting the audience to watch a video presenting a snapshot of a survey conducted across the EU, in which 1,300 companies responded to questions regarding their digitalisation and sustainability journeys.
Jennifer Baker then welcomed on stage the panellists of the panel titled “Policy vs Practice – The SME Challenge”. The panel featured Regina Doherty MEP (EPP, IE); Kristian Vigenin MEP (S&D, BG); Vladimir Prebilič MEP (Greens/EFA, SI); Gaspard Demur, Deputy Head of Unit, AI Innovation and Policy Coordination, EU AI Office, European Commission (DG CONNECT); Giuseppe Casella, EISMEA Head of Department for Innovation ecosystems, SMP/Entrepreneurship & Consumers; Giovanni Zazzerini, Secretary General at INSME – The International Network for SMEs and Ray Pinto, Senior Director for Vertical Strategy and Business Development, DIGITAL EUROPE.
Jennifer Baker opened the panel discussion by asking Regina Doherty MEP where the gap between SME policy ambitions and day-to-day business reality was having the greatest impact on small businesses.
Regina Doherty MEP replied that red tape and the overburdening of businesses were primary concerns. She explained that, despite efforts to create solutions around sustainability and financial security, EU legislators often ended up adding layers of bureaucracy that hindered innovation. Another major challenge, she noted, was access to finance. MEP Doherty stressed the importance of ensuring that the EU’s ambitions under the Savings and Investments Union (SIU) are fully realised and not undermined by national interests. Finally, she emphasised the need to continue diversifying support for SMEs, particularly under new European funding tools such as the European Trade Fund (ETF), to allow the market to thrive.
The moderator then turned to Kristian Vigenin MEP, asking him which issues, aside from red tape and access to finance, were most affecting small businesses today.
Kristian Vigenin MEP replied that a crucial problem is that regulation is often designed without sufficient attention to how it is applied in practice, leaving SMEs struggling to implement rules efficiently. According to the MEP, the EU should maintain high standards while ensuring that rules are practical and do not impose unnecessary burdens on smaller enterprises.
MEP Vigenin also highlighted the additional challenge posed by national regulations, which SMEs must navigate alongside EU legislation. He stressed the need for EU legislators to closely coordinate with national authorities. He further pointed out that, as SMEs grow, they can quickly reach a threshold where legislative obligations increase, but they are not yet large enough to manage the resulting complexity, effectively penalising growth. He argued for “softening” this threshold by introducing transitional regulatory layers that support, rather than punish, business growth.
Jennifer Baker then asked Vladimir Prebilič MEP for his perspective on the discussion.
Vladimir Prebilič MEP suggested that regulation should be reduced and that relevant information should be collected through a bottom-up process rather than imposing rules from above. He advocated for a pre-emptive approach, whereby EU institutions listen to SMEs’ needs before implementing the Multiannual Financial Framework (MFF), integrating their input into legislation from the outset.
The moderator then turned to Gaspard Demur, asking him to comment on the most pressing issues for SMEs, with special regard to AI.
Gaspard Demur highlighted a mismatch between supply and demand in the AI sector as he stated that, despite the presence of 7,000 AI developers, adoption among SMEs remains limited. When speaking with entrepreneurs, he noted that, while access to finance and regulatory burden are relevant, their highest priority is acquiring clients to sustain their businesses. To address this question, the European Commission has adopted a twofold strategy. First, the strategy seeks to understand companies’ specific needs and then develop artificial intelligence models tailored to those needs under the Apply AI Strategy. Second, it aims to establish a trusted local ecosystem, as entrepreneurs are more likely to engage with systems provided by familiar, local actors. To support this process, the European Commission has established the Network of European Digital Innovation Hubs, providing guidance and building trust at the local level.
Jennifer Baker then asked Giuseppe Casella for his opinion on the gap between policy and reality for SMEs, and where it was hurting EISMEA the most.
Giuseppe Casella replied that even well-intentioned EU policies could become disconnected from SMEs’ reality, which is often characterised by limited capacity and skills. In this connection, he referred to the Southern Italian context where, even in key industrial sectors, micro enterprises and SMEs only have 5-6 workers in their staff, often with one person in charge of regulatory matters and the application for funds.
Mr Casella also pointed out that sometimes public institutions presume what SMEs need without verifying their needs. For instance, once, on the basis of the existing information, he assumed that SMEs needed translation to national language about an application form whereas, by talking to them, he realised that they needed more training about the application of regulation. Hence, he emphasised the importance of communicating to SMEs either directly or via European or national associations.
Mr Casella also reiterated the problem of how the objectives designed at European level translate into complexity if there are overlapping requirements and multiple reporting obligations, with long reports to be filled in following different national interpretations. In this context, he highlighted the importance of simplification, explaining that sometimes regulation is not simple for SMEs, because it protects public interests (e.g. public health) which cannot be disregarded just because of their small size. Still, he believed in the existence of a margin of manoeuvre to make regulation for SMEs proportionate, easier to understand, apply and comply with.
Another key message Mr Casella wished to convey was that we should shift from a culture of ex-ante control to ex-post control. Additionally, he pointed out that SMEs often do not know the European instruments they may rely on, such as the Enterprise Europe Network. As a result, he stated, communication around these instruments is paramount, because of the opportunity to receive feedback from enterprises, and because of the geopolitical nature of such course of action. In this respect, he recalled the EU’s signature of the trade agreement with India and of the Mercosur trade accord to stress the importance to work with international partners to empower SMEs. Mr Casella concluded his speech by mentioning that the Enterprise Europe Network was being discussed under the EU’s upcoming Multiannual Financial Framework.
The moderator invited Giovanni Zazzerini to give his opening remarks on the matters at stake.
Giovanni Zazzerini mentioned SME competitiveness and the challenges stemming from industrial fragmentation. These are key issues deriving from heterogeneous markets as well as from rules and regulations, such as the AI Act or ESG sustainability reporting, perceived as too complex for SMEs. This reduces small business competitiveness to innovate compared to SMEs outside the EU. Similarly, a weak European capital market lowers SMEs’ competitiveness, he added. Consequently, to benefit from investments, small businesses often migrate abroad. According to Mr Zazzerini, without a full political and economic integration, European innovation processes will remain stuck. Despite lengthy discussions about technological sovereignty, without political sovereignty Europe will not have enough long-term goals and coordination to achieve it, he concluded.
Jennifer Baker invited Ray Pinto to deliver his comments on the question emerging in the discussion.
Ray Pinto hinted at the previously mentioned difficulty to access information on regulation and referred to an IMF study regarding international tariffs, finding that the barriers in the Single Market were compatible with 45% of tariffs on goods and 110% of tariffs on services. Rather than reiterating the possibility to cut regulation, he mentioned Mario Draghi’s 28th Regime as a way forward.
The moderator then turned again to Vladimir Prebilič MEP, asking how EU policy could better support social innovation and sustainability among SMEs without creating additional complexity or compliance burdens.
Vladimir Prebilič MEP replied that the European Union must make sustainability achievable for small companies through predictability and trust at the EU level. He drew on his experience as mayor of his municipality for 14 years, recounting how he attracted investors, including Japan’s Yaskawa, one of the world’s largest robotics manufacturers. He secured the investment by guaranteeing the CEO that conditions would remain unchanged for ten years. During this period, 300 jobs were created, each generating €200,000 in added value. According to MEP Prebilič, this example illustrates what is needed at the EU level, and he emphasised that there remains significant room for improvement in this area.
Jennifer Baker then asked Gaspard Demur where EU SME policies risked being well-intentioned but disconnected from the realities of small businesses, and how important regulatory simplification was in this context.
Gaspard Demur replied that the European Commission is providing tools to facilitate the implementation of existing legislation. He highlighted the recent establishment of the AI Act Service Desk, where SMEs can directly ask questions, such as which provisions of the AI Act apply to them. Through initiatives such as the European Digital Innovation Hubs Network and the AI Act Service Desk, the Commission seeks not only to simplify compliance but also to clarify practical use cases, noting that many SMEs would ultimately fall outside the scope of the AI Act.
The moderator then asked Ray Pinto how Europe could ensure that SMEs not only comply with AI regulations, but also leverage AI as a driver of productivity and competitiveness.
Ray Pinto built on Gaspard Demur’s points, emphasising the need for Europe to create a level of confidence where businesses can develop AI solutions and scale them across the EU. Once simplification is achieved, the market potential will expand significantly, he stated. He also noted that policymakers often focus on B2C AI, a €3-trillion market, whereas B2B AI represents a €13-trillion market, where Europeans lead across nearly every sector.
Jennifer Baker reverted to Regina Doherty MEP, asking where EU SME policies risked being well-intentioned, but misaligned with operational realities, and how crucial regulatory simplification is.
Regina Doherty MEP cited her work on the Omnibus IV package, which she argued could penalise SMEs as they scale due to the definitions of SMEs and associated requirements. She highlighted the importance of AI, noting that the AI Service Desk ensures large companies comply with EU legislation. At the same time, she stressed the need for both European and national service desks to help SMEs access AI tools effectively, develop a skilled workforce, and fully realise the benefits of the Single Market.
The moderator then invited Giuseppe Casella to comment on the discussion.
Giuseppe Casella noted that the EU already has several instruments for SMEs, including financial measures, European Digital Innovation Hubs, free market access initiatives and targeted actions to strengthen the SME ecosystem. According to the speaker, the real challenge is not to create new instruments, but to generate synergy among existing ones, ensuring that SMEs can easily locate, trust and use them effectively. He highlighted the need for greater speed and simplicity, smart regulation, improved understanding between policymakers and implementing bodies, coordination between EU and national levels, and stronger public-private partnerships to foster cross-border innovation.
Jennifer Baker then asked Giovanni Zazzerini which examples from other markets could inspire EU innovation policies.
Giovanni Zazzerini emphasised policies that exploit specialisation and regional resources rather than replicating the Silicon Valley model. For example, Japan and Taiwan coordinated their small business ecosystem with a long-term vision which focussed on incremental rather than breakthrough innovation, as seen in cases such as Shimano and Giant. Regarding the AI value chain, he noted that Europe’s contribution remains marginal in areas such as cloud infrastructure, raw materials and operating systems. However, some European companies lead in the B2B sector, he remarked. For instance, ASML, a Dutch company, is supplying lithography machinery to Chinese microchip foundries. Mr Zazzerini concluded by stating that Europe should leverage such specialisation to build long-term growth.
The moderator then turned to Kristian Vigenin MEP, asking how the EU could define the category of SMEs without weakening support for the smallest and most vulnerable businesses.
Kristian Vigenin MEP responded that Europe cannot simply adopt the US model due to societal and organisational differences. He added that the goal is not merely less regulation, but smart regulation that benefits both companies and society. He noted that simplification efforts for SMCs must carefully consider the threshold of the employee which defines them, as extending simplification too broadly could dilute the advantages for SMEs. He also emphasised that EU legislators should always maintain better conditions for SMEs when creating or amending regulation. MEP Vigenin concluded by highlighting the European Parliament’s engagement with SMEs and organisations such as SME Connect to design the best framework for SME development and growth.
The moderator then opened the closing round of the discussion, asking the panellists for a word or phrase that policymakers should keep in mind when considering concrete changes to better reflect SME realities:
- Regina Doherty MEP mentioned principles-based legislation;
- Kristian Vigenin MEP pointed at smart regulation;
- Vladimir Prebilič MEP emphasised the question of supporting sustainability;
- Gaspard Demur highlighted the role of ecosystem in bringing SMEs to the right AI tools;
- Giuseppe Casella mentioned simplification by default;
- Giovanni Zazzerini pointed at the matter of application of innovations, acknowledging that Europe’s strength lies in invention but need for better commercialisation;
- Ray Pinto highlighted the importance of unleashing the potential of the True Single Market.
Jennifer Baker thanked all panellists for their contributions and concluded the evening reception by congratulating the Mastercard Strive EU Innovation Fund winners.
Bibliography:
Mastercard Strive. (2026). The digital transformation of European micro-businesses: Snapshot study
