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SME Policy Index: Eastern Partner Countries 2020

Assessing the Implementation of the Small Business Act for Europe

image of SME Policy Index: Eastern Partner Countries 2020

The SME Policy Index: Eastern Partner Countries 2020 – Assessing the Implementation of the Small Business Act for Europe is a unique benchmarking tool to assess and monitor progress in the design and implementation of SME policies against EU and international best practice. It is structured around the ten principles of the Small Business Act for Europe (SBA), which provide a wide range of pro-enterprise measures to guide the design and implementation of SME policies. This report marks the third edition in this series, following assessments in 2012 and 2016. It provides a comprehensive overview of the state of play in the implementation of the ten SBA principles, and monitors progress made since 2016. It also identifies remaining challenges affecting SMEs in the Eastern Partnership (EaP) countries and provides recommendations to address them based on EU and international good practice examples. The 2020 edition also features a novelty: An assessment of three new dimensions going beyond core SME policy (competition, contract enforcement and business integrity) looking at key structural reform priorities that are critical to establishing a level playing field for enterprises of all sizes and ownership types.

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Level playing field in the Eastern Partner countries

This pillar analyses the horizontal aspects of the business environment that ensure competitive neutrality and equal access to inputs and markets for all firms, regardless of their size and ownership type. In the framework of this report, the “level playing field” covers the areas of competition, contract enforcement and alternative dispute resolution, and business integrity. While these factors affect all firms SMEs are often disproportionately affected, and they often lack the resources that allow large and/or state-owned firms to operate in severely flawed institutional environments. In terms of competition, the basic building blocks for functional competition regimes are present in all EaP countries, but actual implementation remains a challenge. Moreover, competition authorities often lack sufficient resources to fulfil assigned responsibilities, and more effort is needed to ensure enforcement in the areas of cartels and merger control. While all EaP countries have ongoing reforms in the justice sector (contributing to improved contract enforcement procedures), governments should continue working towards a more predictable, transparent, adequately staffed and qualified judiciary. Ensuring equal protection of SME property rights vis-à-vis SOEs and public authorities is another area of focus. In addition, promoting alternative dispute resolution in commercial matters could be an important step towards facilitating SME access to justice. In the area of business integrity, all EaP countries have put significant effort into fighting corruption in both the private and public sectors, but more needs to be done to strengthen enforcement of anti-corruption legislation and promote business integrity principles, with a focus on SMEs.

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