European Union and SMEs in Cyprus

European Union and SMEs in Cyprus

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Dr. Written by Ambrozio Prodromos *

In our previous conversation, we mentioned the EU’s annual SBA fax sheet, marking the year’s small and medium enterprise (SME) performance in the Union and marking the impact of the epidemic. The annual report also outlined a number of issues identified in SMEs across the Union, and although there were assessments in 27 member states, most issues were common, so they should be general. Policies to be developed in the Union to address them. Of course in this approach one must have an understanding of the specific circumstances that exist in each country.

There is a lot of information about SMEs in the Republic of Cyprus, however the first annual report does not focus more on the performance of each country, but tries to give a more comprehensive approach due to the epidemic and the parallel economy. Inflation in the Union and in the world. At the time of the epidemic, the Republic of Cyprus activated a series of measures, which in most cases were common in some countries, but in others the media was considered inadequate because it did not leave the companies on display. .

In terms of wage subsidies, the Republic of Cyprus, like other member states (with the exception of Estonia and Finland), has been given special place in this region, which has adequate support following the recommendations of the European Central Bank (ECB). Employees. This has had a positive impact on job security, otherwise it could have caused immeasurable damage to the state’s overall economy. The alignment with the policy of the European Central Bank is therefore considered correct. What needs to be considered is not part of the report, but the effectiveness of the measures, because many of them are clear and acceptable even to members of government who do not meet the needs of society and are not rationally consistent and consistent.

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The report focuses on another major issue for small and medium enterprises, namely the corporation tax, and more specifically, the deferral of its payment. Unfortunately, the system of the Republic of Cyprus has not changed, and our country is one of only three countries in 27 (including Lithuania and Malta) not to. As a result, many small and medium enterprises, especially in areas such as tourism, which have been shut down for several months, face very serious liquidity as banks refuse to provide more cash and / or loans.

The problem with the provision of social security is similar, as one of the five member states of the Republic of Cyprus (along with Ireland, Latvia, Lithuania and Romania) has not implemented a minimum policy in relation to the problem. For small and medium enterprises that have lost the right to work. For Cyprus, and especially for companies in the tourism sector, this is utterly devastating and does not present great opportunities for companies. Given the small turnover for two consecutive years, the collapse of many companies is unfortunately a foregone conclusion. This is especially visible to those who are close to the area, and the state is causing more problems for a number of reasons than even an aid.

Another problem faced by SMEs in the Republic of Cyprus has been identified by analyzing the practices of other countries and their technical and digital support through various functions of the state machinery in collaboration with the private sector. Some of the examples that can be easily cited by the Ministry of Innovation cited in the report (p. 119) are those of Austria, Italy and France. All three countries have worked with the private sector and other actors for SMEs to enable them to adapt to the growing digital modernization needs of their operations. This is a huge gap that the Republic of Cyprus needs to understand, as it is directly related to the survival of SMEs, but also their competitiveness and productivity. At the same time, companies themselves need to pay the necessary attention and move in this direction, because this is a strategic requirement and they can ensure sustainable development.

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The above are just a few of the many things that can help small, medium businesses understand, analyze and make the right decisions. The annual report is an important tool in the hands of the state and the media and must be used properly. Although the report was prepared on a different basis due to pandemic, the information provided is significant. Unfortunately, many companies perished because the orders were beyond any financial logic and we expressed strong opposition from the beginning. Unfortunately we were right.

* Academic – Education and Business Consultant

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