VDA Statement regarding the EU Commission’s "Small Mid-Caps" omnibus package

"The EU Commission’s omnibus package 'Small Mid-Caps' is not a real breakthrough and does not achieve its goal of stemming the tide of regulation, removing obstacles to growth and strengthening the performance of Europe’s industrial heartland.

The proposal from Brussels to extend the relief to companies with up to 749 employees and an annual turnover of €150mn or total assets of €129mn is unsuitable and far from sufficient to provide tangible relief to Europe's industrial SMEs. The measure neither reflects the reality of many industrial SMEs nor does it take their specific challenges into account. SME exemptions include, for example, simplified application procedures or simplified balance sheet preparation.
Industrial SMEs are a key element of innovation, employment, and competitiveness in Europe - yet they often fall through the regulatory cracks: They are 'too large' for traditional SME support, and they lack the human and financial resources to meet the demands of large companies. With its proposal, the Commission risks once again ignoring an important group: companies with 750 to 3,500 employees that invest in key sectors, conduct research, and secure value creation with regional roots.

The VDA therefore calls for a clearly defined mid-cap category with an upper limit of 3,500 employees. This category must be systematically considered in funding programs, regulatory relief, and reporting requirements. However, this category must not be introduced at the expense of existing SME funding programs, but must be conceived as a separate segment, for example, as 'large mid-caps.'

The EU Commission also proposes exempting small-mid-cap companies from the due diligence and supply chain traceability requirements for battery raw materials. However, the structural framework remains incomplete overall: The EU Commission has not yet created the urgently needed prerequisites for implementing due diligence obligations along complex supply chains - among other things, functioning notification and accreditation bodies and concrete guidelines are lacking. Furthermore, the question remains whether there is any intention to harmonize the content with other regulations. However, companies need clarity and a reliable framework early on to be able to set up their management systems efficiently and legally.

The fact is: The EU must finally implement its promise to reduce bureaucracy. Small and medium-sized businesses need less bureaucracy, clearer categories, and more targeted support - not new thresholds and requirements that once again ignore reality."