Simon De Cesare, MBB President
This Opinion Piece featured on The Sunday Times of Malta, on 4th April 2021
The European Union has recently adopted the Multi-Annual Financial Framework (MFF), a seven-year framework regulating the EU’s spending in the given period. The MFF sets out the framework for the numerous funds that businesses and citizens can tap for the purpose of implementing a broad range of projects and programmes. This funding is managed according to strict rules to ensure control, transparency and accountability over the use of the funds.
In this context, the Malta Business Bureau (MBB) has conducted an in-depth research on the impact of EU funds on the economy, the benefits for businesses and how they can better access EU funds, and to recommend ways to overcome those issues in a tangible and realistic way. The MBB also intended to kick-start a dialogue with businesses on EU funding, to encourage them to overcome possible intimidations and to demonstrate that EU funds may meet their financing needs under certain situations.
The benefits of EU funds to businesses have long been apparent, and our research aims to quantify that. Businesses benefit in two ways, firstly by being direct beneficiaries of the fund themselves and, secondly, even when businesses are not the direct beneficiaries of the funds, they can still benefit through the provision of the good or service procured by the beneficiary of the fund.
The €838 million of EU funds allocated to Malta during the 2014-2020 programming period brought about crucial demand-side benefits that resulted from the expenditure of the funds and is estimated to contribute a further €662 million to Malta’s GDP over a seven-year period, and 1,920 full-time jobs over the period. In addition, businesses have also seen medium- to long-term supply-side benefits that result from investing the funds, bringing about productivity improvements.
These are harder to quantify, but headline indicators show that Malta’s performance relative to the EU-27 is positive in the areas of business internationalisation and the efficiency of public administration, but weaker in access to finance, innovation and energy.
Yet despite the obvious benefits, it has been consistently apparent throughout the last two programming periods that Maltese businesses tend to struggle to make the most of EU funds as a source of investment. For EU funds administered directly from Brussels, businesses often rely on intermediary bodies, such as the MBB, among others, to benefit through funded training programmes and other initiatives.
There is, therefore, massive potential and a yet untapped investment resource for private enterprise to benefit from EU funds directly. However, it is apparent that enterprises tend to either be unaware of these opportunities or choose to ignore the opportunities for several reasons.
One reason is the complexity of the application process and administration which comes with managing funds allocated for the implementation of a particular project. One has to consider that EU funds are public funds and it is to be expected that certain procedures must be in place to ensure that every euro is used for EU and national priorities and that they are accounted for.
Our research shows how several of the surveyed businesses claim to face excessive administrative procedures when attempting to access funding
Our research shows how several of the surveyed businesses claim to face excessive administrative procedures when attempting to access funding, particularly direct EU funds, and a significant number confirmed that more awareness is needed on the different strands of EU funding opportunities available.
Through its report the MBB proposes multiple, tangible and implementable solutions to improve the situation. These recommendations target both the EU institutions and the government and seek to alleviate any bottlenecks or disproportionately burdensome situations businesses face when attempting to access EU funds.
For example, we propose that pre-screening of applications is introduced to avoid that SMEs waste too much time, money and effort in developing an application only to see it fail for issues that could have been identified earlier in the application development process. This is already done for certain programmes and should be implemented across the board.
Adequate promotion and visibility in the business community should also be ensured, so that more opportunities are taken up. We also propose ways to facilitate the process to find international partners and suggest specific ways of streamlining certain administrative processes during the application process.
The subject of EU funds and the opportunity they present to businesses is one of the MBB’s core missions. Over the years, the MBB has implemented several EU-funded projects to support businesses with deliverables ranging from cutting down on utility costs to organising training sessions on several topics such as financial literacy, and more.
The MBB believes that businesses should be empowered to directly tap EU funds to meet their own specific needs, and we hope that this research serves to continue the debate on how to improve the conditions for business to increase activity in this area. One thing that has been learnt throughout this process is that while businesses may have many ideas for projects that may be eligible for EU funding, they sometimes are unable to identify the correct funding stream where to propose their ideas for funding.
Therefore, the MBB will be increasing its efforts to support businesses to tap directing funding in Brussels by welcoming proposals and help identifying the correct funding stream for their project ideas. Through this service, that will be offered under the auspices of the Enterprise Europe Network, the MBB will welcome concept notes from businesses with project ideas and will verify whether the concept is good enough for consideration for EU funding, provide general feedback and suggest an adequate funding stream, where it exists, and relevant contact points for businesses to pursue their project application.
It is hoped that this service will go a long way in helping businesses overcome the perception that procuring EU funds is an unsurmountable task and, in turn, facilitate the path for more businesses to bring more investment for their project ideas and the economy in general.
The Malta Business Bureau is the EU-business advisory and support office of The Malta Chamber and the Malta Hotels and Restaurants Association. The MBB is a partner of the Enterprise Europe Network.