From Barriers to Breakthroughs:
Advancing SME Growth Through the Next Phase of the Single Market

On Wednesday, 25 June 2025, SME Connect organised a working breakfast titled “From Barriers to Breakthroughs: Advancing SME Growth Through the Next Phase of the Single Market”, hosted by HENRIK DAHL MEP, Committee on the Internal Market and Consumer Protection (IMCO), in the European Parliament, Brussels.

The panel featured distinguished experts including MARIE-HÉLÈNE PRADINES, Head of Unit SMEs (GROW A.2) at European Commission; JULIETTE BEAULATON, Policy Director at Ecommerce Europe; DHARMESH MEHTA, Vice-President of Amazon; EVA RYTTER SUNESEN, Partner at Implement Consulting; CHRISTOPHE DE SMET, Founder of Garzini; and MARTINA MANNA, Co-Founder of Benvolio. The discussion was moderated by HORST HEITZ, Chair of the Steering Committee of SME Connect.

In his opening remarks, HENRIK DAHL highlighted the 30th anniversary of the EU Single Market as both a cause for celebration and a moment for critical reflection. Drawing from Denmark’s success in fostering business growth through clarity, simplicity, and consistent rule enforcement, he emphasised the need to adopt a similar approach across the EU. Mr. Dahl voiced concerns that for many SMEs, the Single Market remains fragmented, with confusing cross-border procedures and redundant regulations acting as real barriers to growth and innovation. He criticised the EU’s tendency to over-regulate and called for a shift in focus from producing new legislation to improving the quality and enforcement of existing rules. He underlined the importance of thorough and honest impact assessments, particularly with strong SME checks, and stressed the need for political culture to prioritise practical, usable laws over sheer volume. Despite the challenges, Mr. Dahl expressed optimism, noting that the active engagement of institutions and stakeholders signals a valuable opportunity to reshape the Single Market into a more supportive environment for SMEs.

MARIE-HÉLÈNE PRADINES, representing the European Commission, underscored the institution’s commitment to supporting SMEs as a top priority under the new mandate. Emphasising the motto “simplification for a simpler and faster Europe,” she detailed several initiatives aimed at reducing administrative burdens and enhancing the business environment. A key example was the adoption of the first omnibus package in February, which exempts SMEs from certain corporate sustainability reporting obligations, streamlining compliance. Ms Pradines also highlighted the newly launched Single Market Strategy, focused on removing internal barriers, promoting digitalisation, and boosting SME competitiveness. She introduced efforts to improve regulatory processes through tools like the SME test, now elevated to the Commission’s highest levels, and the development of SME-friendly provisions. Additionally, she discussed the revised definition of “small mid-caps” to support scale-ups, and the accompanying legislative proposals aimed at extending benefits previously limited to SMEs. Further initiatives include a start-up and scale-up strategy, the proposed 28th company statute for cross-border business facilitation, and strengthened local SME support networks such as the Enterprise Europe Network and SME envoys. While acknowledging that financing remains a key issue, Ms Pradines noted that upcoming proposals under the new Multiannual Financial Framework are expected to address this. She closed by affirming the Commission’s clear intent to create a more enabling environment for SMEs through both policy reform and practical tools.

DHARMESH MEHTA underlined Amazon’s long-standing commitment to supporting SMEs globally and within the EU, describing the Single Market as the most important opportunity to strengthen EU competitiveness and promote cross-border business. He noted that over 60% of Amazon’s sales come from independent sellers—most of them SMEs—and that in 2024 alone, 127,000 EU-based SMEs sold over 1.3 billion products worldwide via Amazon, creating an estimated 350,000 jobs across the EU, many in rural areas. Mr Mehta highlighted Amazon’s significant European presence, with 10 marketplaces, over 350 facilities, and 150,000 direct employees, and explained how the company leverages technology—including fulfilment services, advertising tools, and AI-driven features—to help SMEs scale and innovate. He stressed the importance of trust and compliance, particularly regarding product safety and authenticity. In light of the EU’s Single Market Strategy, Mr Mehta called for continued collaboration to remove remaining barriers and proposed three key policy measures: introducing a standardised digital product label, creating a streamlined EU-wide digital one-stop shop for Extended Producer Responsibility (EPR), and ensuring the effective implementation of the VAT One-Stop Shop under the “VAT in the Digital Age” package. He concluded by reaffirming Amazon’s strong commitment to working with policymakers and stakeholders to unlock the full potential of the EU Single Market for SMEs.

JULIETTE BEAULATON, speaking for Ecommerce Europe—which represents national e-commerce associations made up mostly of SMEs—stressed that small firms sit at the heart of three overlapping policy imperatives: a fully functioning Single Market, global competitiveness, and a fair level­-playing field. She welcomed recent EU focus on these areas but urged continued effort, noting that digitalisation, especially for micro-enterprises, remains uneven despite progress since the pandemic. Beaulaton identified two priorities: firstly, completing a resilient, circular Single Market—because SMEs drive much of Europe’s circular-economy innovation—and secondly, ensuring fair competition. She cited fragmented Extended Producer Responsibility rules as a prime example of burdensome regulation that deters SMEs from exporting, advocating a digital one-stop shop to harmonise compliance across member-states. Finally, she warned that non-compliant sellers can undercut lawful businesses by up to 40 percent, and applauded recent EU steps (customs reform, CPC actions, DSA enforcement) aimed at closing that gap so compliant SMEs can compete and grow.

EVA RYTTER SUNESEN underlined the pressing importance of including SME perspectives in shaping the Single Market, particularly in light of geopolitical, economic, and technological shifts. She presented the newly released Business Case Catalogue, based on over two years of research involving more than 3,300 export-oriented SMEs across 11 European countries. The findings reveal a strong consensus on common barriers—especially regulatory divergence—and broad support for deeper Single Market integration. Among the 11 recommendations in the report, many are already reflected in the EU’s new Single Market Strategy, such as simplifying administrative procedures, improving enforcement, harmonising product and data regulations, and facilitating free data flow. Ms. Sunesen also referred to three in-depth studies addressing regulatory quality, the costs of cross-border payments, and barriers to trade in climate-related goods and services. Each report outlines concrete proposals for reform. In closing, she urged policymakers to move from analysis to implementation, stating: “We don’t need more insights. We need action now.”

CHRISTOPHE DE SMET, founder of Garzini, shared the journey of his e-commerce-driven accessories brand, which has grown from a single product concept in 2016 into a true omnichannel business operating in around 30 countries. Carzini sells through its own webshop, 1,000 retail stores, Amazon, Bol.com, and other local marketplaces. Mr. De Smet highlighted how e-commerce enables direct customer feedback and international scale, particularly for niche products. However, he underlined that expansion into new EU markets involves complex considerations—including logistics, marketing, language, and notably, compliance. He focused on VAT requirements as a key barrier, explaining that physically placing even a single wallet in another EU country requires a local VAT number, a process that can take up to three months. For a seasonal product, this delay can mean missing the market window entirely. De Smet concluded with a clear call for a single EU-wide VAT registration system, which would significantly ease expansion and accelerate growth for SMEs like his.

MARTINA MANNA, speaking for Benvolio 1938, a long-established producer of organic and extra-virgin olive oils, described how her firm now reaches consumers via its own website, traditional retailers throughout Europe, and pan-European platforms such as Amazon. Despite this omnichannel presence, she said, day-to-day operations are hampered by persistent Single Market barriers—most notably the “maze” of national Extended Producer Responsibility (EPR) rules for recycling. Each country’s separate, costly registration process drains time and resources and stands as a major obstacle to cross-border trade for SMEs. Manna therefore urged policymakers to create a single, harmonised EU EPR system and to back the proposed EU-wide VAT registration scheme, arguing that only unified compliance frameworks will allow small businesses to serve customers across Europe efficiently.

Adding to the range of SME experiences shared during the event, representative from a family-run food business explained how their e-commerce journey began in 2015, initially to meet growing demand for their MasterChef Italy promotional products, which were often unavailable in local shops across Europe. Starting with a simple webshop, the business later adopted Amazon as a key channel. He highlighted two main benefits of e-commerce: broader reach across Europe and the direct relationship with customers, which provides valuable insights into preferences and helps drive innovation. However, like others, they identified VAT compliance as the most difficult aspect of cross-border sales. They described the confusing reality of having to manage three different VAT systems—domestic, foreign, and the One-Stop Shop—depending on the sales route. With expansion plans hindered by this complexity, the speaker echoed earlier calls for urgent VAT reform, ideally before 2028, to support SMEs striving to grow within the Single Market.

Further illustrating the diversity of SME experiences, Victor from Craftelier shared his journey from a small family-run shop in a rural town in northwest Spain, to becoming a thriving e-commerce business. Having moved online over a decade ago, Craftelier now employs nearly 200 people and conducts around 85–90% of its sales outside Spain—over half of which come from outside the EU. Victor highlighted how excessive bureaucracy—at the local, national, and EU levels—creates unnecessary barriers, particularly for businesses engaged in B2C e-commerce. He noted the irony that it is often easier to sell B2B within the EU than directly to consumers. He also challenged the narrative that e-commerce harms local communities, sharing how, in his case, it has revived economic activity in a sparsely populated rural area. Rather than seeking special assistance, he urged policymakers simply to avoid placing further burdens on SMEs, so they can continue to innovate, export, and grow—even from the most remote corners of Europe.

Other business owners, such as Edu and Ester from FETĒN, a company based in Spain selling cosmetics for men, highlighted the challenge of accessing public funding, both at the national and European level, for SMEs selling online.