SMEs in a stalemate: entrepreneurs' confidence in the economy drops below 35%

Only one in three entrepreneurs still believes that the national economy will have a positive direction this year, said Florin Jianu, former president of the National Council of Small and Medium-sized Private Enterprises in Romania (CNIPMMR), current social-democrat senator, Fridey, on the occasion of the launch of the 23rd edition of the White Paper on SMEs, a study conducted on a sample of over 1,000 SMEs between January and February 2025.

Florin Jianu stated: "This year, we have created a profile of the entrepreneur who uses what digitalization means. We looked at young entrepreneurs, who are starting to see themselves in the economy, and at their specific attributes, but a common attribute is that the Romanian entrepreneur manages to adapt to crises, economic instabilities or legislative changes. Entrepreneurs in the digital area work remotely, no longer they have fixed headquarters for companies, the leadership is oriented towards the development of human resources, they are very active in the social media area, they pull various brands after them, they are multifunctional in the first two to three years - they are managers, accountants, employees, those who do sales and customer support - and they create systems. The main motivating factors for business are financial autonomy and professional independence. Compared to the last three years, we see an increase in the percentage of women entrepreneurs, which represents 32.2%. A gratifying thing is the fact that 24% of SMEs allocate a maximum of 20% of investment funds for innovation. At the same time, those who are interested in European funds remain at a high and constant level, even if this year the percentage has decreased to 55.14% compared to 64.51% in 2024. Confidence in the evolution of Romania's economic situation has decreased dramatically, to 34.69% this year, compared to 49.95% in 2024 and 61.22% in 2023, when entrepreneurs believed in a better evolution of it. Practically only one in three entrepreneurs currently believes that the evolution of the economy will be better or as good”.

He also showed that financing remains a problem for small and medium-sized enterprises and for public policies, as long as 45.43% of the companies participating in the annual study conducted by CNIPMMR are self-financing, and presented the difficulties faced by entrepreneurs in our country.

• Unfair competition, a growing phenomenon

Florin Jianu also showed: "As for the difficulties encountered by SMEs, in the top three, inflation is in first place (46.42%), followed by unfair competition (45.3%) and the decrease in domestic demand, consumption (40.39%). As we have drawn attention in the last three years, unfair competition has appeared on the radar of the difficulties encountered by SMEs and it is an alarm signal that we are raising regarding the fact that, if entrepreneurs mention unfair competition, then it is a real problem in the economy. It is not up to them to eliminate what is meant by unfair competition or the gray economy or tax evasion, but it is up to ANAF, the state institutions to streamline their activity. From the analysis carried out, we note that unfair competition is only one percent away from first place and, if we are to look at the evolution, I am afraid that next year we will have unfair competition unfairness as the main difficulty faced by SMEs, because inflation is decreasing".

The White Paper on SMEs 2025 also mentions that the main financing needs of SMEs in recent years have remained roughly in the same scope, investments in equipment, technologies or real estate (52.14%), development of products, services or accessing new markets - 37.53%, financing of stocks and working capital - 27.71%. Investments in human resources, more precisely in employee training, are at a small percentage - 12.09% - down from last year, when it was at 18.09%. Regarding business opportunities for SMEs, the first place is occupied by the increase in demand on the local market (57.89%), followed by the use of new technologies (51.02%) and the creation of a business partnership (37.28%)

Florin Jianu also presented the proposals for supporting the business environment as they result from the White Paper on SMEs for the year 2025: .

"As I have said repeatedly, the focus must be on stimulating the economy, on stimulating investment, on stimulating entrepreneurship, in its various forms. There are proposals in the area of stimulating the economy, increasing depreciation by 30% per year, gradually reducing the corporate tax starting with 2028, by 1% per year, so that in 2032 the tax burden is below 25% compared to the current 30%, supporting the green economy, e-mobility and expanding the allocation for research-development-innovation. These proposals do not come from nothing, but are taken from reality. Germany has just done these things. In a period when economic engines are decreasing , in which we no longer find an appetite for economic growth, public initiatives must be stimulating”.

• The Competition Council is preparing a package of laws on the functioning of markets

Regarding the conclusions of the 2025 White Paper on SMEs regarding the increase in the phenomenon of unfair competition, Bogdan Chiriţoiu, the president of the Competition Council, stated that, if this finding is made based on tax evasion, then the institution he heads has no authority in that field.

Bogdan Chiriţoiu stated: "I don't know what the data of the study on unfair competition is based on, that is, where this distrust comes from, but obviously it exists and we must find solutions. I think that, first of all, the legislation must take SMEs more into account, because we tend to make complicated rules that we apply to everyone. For large companies, for multinationals, it is ok to have complicated rules because they have the ability to pay their lawyers, consultants, etc. But it is stupid to apply the same things to companies that have fewer employees, that do not have resources. It seems justified to me that we should always try to adapt the legislation, to have a more simplified version of the legislation for smaller companies. And at the Council we do this, on the sanctioning procedure, that is, we make a difference between larger companies and smaller companies, for the latter the amount of fines being lower, more precisely the calculation method uses lower percentages for these companies. Now we are discussing that, when we have a situation of inequality between large companies and smaller companies, in some situations we should no longer sanction SMEs at all, for example in the case of imposing the resale price. We want that in such situations, we come up with a law through which we propose that small companies, which do not have negotiating power, should not be sanctioned. But it should not be understood that small companies do not have to respect competition law. They must also respect the law. If the problem reported by entrepreneurs in the study comes from evasion - because many claim that they cannot compete with companies that illegally avoid paying taxes and fees to the state - I admit that this is a major distortion of the competitive environment, but it is not something we can do anything about, as other public institutions have responsibilities in this area”.

The head of the Competition Council also said that the institution he leads is trying to propose a package of laws regarding the better functioning of markets, through deregulation or better rules, a package that will also be drawn up with the support of the business environment.

"We have proposals, such as those in the area of RCA, passenger transport, in the pharma market. There are many sectors in which things can be made to work better in order to stimulate the Romanian economy”, Bogdan Chiriţoiu pointed out.

• Employment and vocational training, areas that are slurping up European money, without positive results

Petre-Florin Manole, Minister of Labor, Family, Youth and Social Solidarity, drew attention to the fact that the state has spent a lot of money on employment and vocational training, but, instead of the number of employees increasing, it decreased at the end of last year.

Petre Manole stated: "Because SMEs are such an important employer in the national economy, I believe that the Ministry of Labor must work more and more effectively on employment and vocational training, if we want to have a stronger economy, because these are engines of economic growth. The simplest and easiest example to explain is the correlation that needs to be made between increases in defense spending, the arms industry and the labor market. You can, from one day to the next, theoretically and practically, double the budget of a state-owned company that deals with the production of various parts for the defense industry, but you cannot from one day to the next double the number of employees trained and able to work in that company. We have no excuse to be unprepared in a year or two for what is coming from the point of view of the labor market and this industry. We probably have few SMEs in this industry, but more on new technologies, but it is a relevant example in relation to employment. This kind of efficient public policy would make us have a budget which would more easily support pension and salary increases, would make it easier for us to invest in education, health and any other field. We must assume some figures: we spent tens of millions of euros as a country last year on employment and professional training and the number of employees decreased slightly. You don't have to be an expert in macroeconomics or employment, you don't have to be a Minister of Labor, to see that somewhere, something is at least wrong. You can't spend tens of millions of euros in a field to have a decrease in the main indicator in that field at the end of the year. Paying for a loss, is a real problem, easily noticeable and a topic to be solved”.

Attila Gyorgy, State Secretary at the Ministry of Finance, recalled that the state is not only in charge of collecting taxes and fees, but also of making payments, allocating amounts to various state aid schemes aimed at supporting the development of the business environment in our country. The representative of the Ministry of Finance specified that regarding digitalization, the Treasury, a field he personally deals with, has started a process of rethinking the entire IT system that serves public institutions and all taxpayers, and the success of this approach will lead to improving the relationship and communication between public administration and SMEs.

Daniel Fenechiu, leader of the PNL senators, showed that the Government must have a real partnership with the business environment, so that things are predictable.

"Certainly, SMEs and the entire business environment want a partnership with the Government, they want a lot of predictability, because I believe that the main problem that exists in the economic environment is the lack of predictability, the fact that many entities cannot make multi-annual budgets, cannot make a strategy for the future, due to the multiple tax changes. Maybe as a result of this tough reform, things will get back on track and everything that future regulations mean will be done on a partnership basis”, concluded the leader of the liberal senators.