Placing SMEs At The Heart Of Europe’s Future

Michalis Damianos said small and medium-sized enterprises should remain central to Europe’s competitiveness strategy during an extraordinary meeting of the Employers’ Group of the European Economic and Social Committee. Speaking under the theme “Autonomy Through Competitiveness: SMEs At The Core Of Europe’s Strategic Preparedness,” Damianos said geopolitical uncertainty, technological change and the green transition are reshaping the economic landscape across Europe. According to the minister, strengthening SMEs is increasingly linked to Europe’s broader goals surrounding industrial resilience, competitiveness and strategic autonomy.

Confronting Core Challenges

Damianos noted that SMEs account for approximately 99% of the 125,000 businesses operating in Cyprus, making them central to regional development and economic activity. At the same time, many businesses continue facing structural challenges, including regulatory complexity, elevated energy costs, limited access to financing and persistent labour and skills shortages.

Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram

Bridging Policy With Practical Support

The Cypriot government has introduced policies focused on improving competitiveness, productivity and business adaptability through measures supporting entrepreneurship, financing access and industrial modernisation. Funding allocations include €227.3 million from EU Cohesion Policy programmes for 2021–2027, alongside an additional €124.5 million linked to the Recovery and Resilience Facility and the REPowerEU programme.

Coordinated European Action For A Stronger Market

Damianos said national measures alone would not be sufficient to address broader structural challenges affecting SMEs across Europe. Cyprus is therefore using its role during the EU Council Presidency to advocate for stronger coordination on competitiveness policy, industrial strategy and further integration of the Single Market. The issue was also discussed during an informal meeting of EU competitiveness ministers held in Nicosia, where officials stressed the importance of a more unified European market environment for business growth and innovation.

A Blueprint For Sustainable Prosperity

The minister also called for greater regulatory coordination and reduced market fragmentation, particularly in strategically important sectors, including defence, where more than 2,500 SMEs are active. According to Damianos, closer alignment between European and national policy frameworks will be necessary to strengthen long-term competitiveness and support sustainable economic growth across the region.