When a Giant Sneezes: How America Inspires Europe to Rethink Its Economic Goals

When the giant sneezes, the dwarves’ barns begin to tremble. So it is today: America’s shift in economic priorities — away from global conglomerates and toward domestic entrepreneurs — has sent a strange yet palpable ripple across the Atlantic. France suddenly remembered that boulangeries are part of the economy too. Germany retrieved the word Mittelstand from the attic and began saying it not with bitterness, but with hope. Even the Netherlands, until recently regulating business down to the last brick on a storefront, began talking about “space for flexibility.”

The U.S. and Its New Economic Vector

According to AP News, in 2024 small businesses in the U.S. received $56 billion in support — a 7% increase compared to the previous year.

The American administration, having traded its corporate megaphone for a craftsman’s whistle, launched a series of small business support programs in 2024. On the surface, it seemed like yet another round in the never-ending “bring production back home” campaign. But this time, rhetoric became reality: new tax incentives, subsidy schemes, and most importantly — a reorientation of federal procurement priorities. Trump continued the course of supporting small entrepreneurship: in the logic of “small means strategically resilient,” Washington began to regard farmers’ markets with the same seriousness once reserved for Wall Street.

Imaginary character:

— But how did Europe respond? The U.S. has always favored corporate giants.

Author:

— In fact, under the pressure of global economic shifts, U.S. policy has long turned inward toward stabilization through small business support. Direct subsidy programs and tax holidays — once considered leftist populism — have become staples of national economics. And this shift is now influencing Europe as well.

Echo Across the Ocean — Europe Listens In

Inspired by the American example, European countries began reassessing their strategies for supporting small businesses. These efforts reflect a shared aspiration to reinforce economic resilience through local entrepreneurship.

Brussels would never openly admit to following the American lead. Yet Europe’s sensitivity to global winds is so finely tuned that even a faint breeze from Washington triggers a policy pivot.

By the first quarter of 2025, French economy ministers had begun speaking of “local resilience” and “entrepreneurial fabric” — metaphors that, not long ago, seemed like relics of post-war reconstruction. 

In Germany, a term once confined to business school textbooks resurfaced: Entbürokratisierung — the removal of bureaucratic strangleholds on small business. This is not a spontaneous wave of enthusiasm, but a structured response: Europe has realized that in the new architecture of the post-globalist world, large players are vulnerable, while networks of thousands of small ones prove far more adaptable.

In the Netherlands, small business has always played an important role, but in recent years the government has begun reevaluating its approach. In 2025, new regulations were introduced to simplify doing business. Among them is the ability to voluntarily exit the VAT exemption scheme (KOR) at any time — giving entrepreneurs more flexibility in managing tax obligations. In addition, a new EU-KOR scheme now allows small businesses operating in other EU countries to receive VAT exemption there, provided their total annual turnover does not exceed €100,000. However, some restrictions remain: for example, businesses must still have their primary operations based in the Netherlands in order to qualify. These changes aim to support entrepreneurs and stimulate economic activity nationwide.

United Kingdom — Betting on Startups

Like many other countries, the United Kingdom is grappling with economic instability. In response to the crisis — and taking cues from U.S. policy shifts — the British government has announced a significant expansion in support for small businesses. One of the key measures was increasing funding for startup programs. In 2025, the UK allocated an additional £2.5 billion to support young companies, particularly in the fields of technology and innovation. The goal: to build a more competitive economy where small and medium-sized enterprises (SMEs) play a central role in driving growth and innovation.

According to The Times, in its first year of operation, the Northern Powerhouse II fund provided more than £80 million to startups and expanding businesses across Northern England. The fund, backed by the UK government and managed by the British Business Bank, is aimed at addressing the financing gap for growth-focused companies in the North East, North West, and Yorkshire and the Humber.

Spain — Innovation Meets Sustainability

In 2025, the Spanish government is continuing its small and medium business support program with a special focus on innovation and environmentally friendly technologies. Unlike some countries, Spain is introducing long-term subsidies for small businesses engaged not only in developing new products but also in implementing sustainable production methods. The program includes financial incentives for companies that demonstrate a commitment to sustainability principles, and offers tax benefits to those investing in renewable energy.

According to El País, Spain received approval from the European Commission for a €400 million plan to support renewable hydrogen production — a move that bolsters sustainable technologies and aids small business in this sector.

France — From Giants to Boulangeries

France, a country with deep traditions of centralization, is suddenly speaking the language of local entrepreneurship. Paris reconsidering its subsidy policies — not in favor of agro-industrial giants — is already the stuff of parables.

As of April 1, 2025, the France Travail reform came into effect, significantly improving conditions for new entrepreneurs. One of the key changes was an increase in the startup support grant (ARCE) from 45% to 60% of the remaining unemployment benefits (ARE). This amount is paid in two installments: the first after all conditions are met, and the second after six months, provided the business is still active. If the entrepreneur secures full-time employment during this period, the second payment is canceled. In addition, entrepreneurs can now choose between receiving the ARCE or continuing with monthly ARE payments — offering greater flexibility in financial planning. These measures aim to stimulate entrepreneurial activity and support new businesses across the country.

Germany — Reviving the Mittelstand

If the German economy had to choose a spiritual guide, it would surely be the Mittelstand — the backbone of its economic doctrine. But the past decade has shown: even myths require maintenance. The energy crisis, rising costs, and tax pressures have drained family-owned businesses as swiftly as they once displaced the factories of the 19th century.

Small and medium-sized enterprises (SMEs) have always formed the core of Germany’s economy, but recent years have brought significant challenges. In response, the new government under Chancellor Friedrich Merz has introduced an ambitious stimulus plan featuring major tax incentives and infrastructure investments. However, as noted in Reuters, experts warn that these measures could be delayed by bureaucratic hurdles and labor shortages. According to representatives of the Mittelstand association, “injecting funds into infrastructure alone is not enough”; structural reforms are also needed to ensure effective use of these resources.

Berlin has unexpectedly begun speaking the language of simplicity. And as the U.S. experience suggests, this might be the key not only to preserving the SME sector but to safeguarding Germany’s entire export-reliant economic model.

Imaginary character:

— But won’t these measures help small businesses?

Author:

— They certainly could spark momentum. But it’s crucial that the funds don’t get swallowed up by bureaucracy and administrative barriers.

Poland — Smart Path to Innovation

In 2025, Poland continues to actively support its small and medium businesses with a focus on innovation, digitalization, and sustainable development. A flagship initiative is the Ścieżka SMART (“Smart Path”) program, offering funding for the implementation of innovations, digital technologies, and research. Special attention is given to enterprises in the eastern regions through the Fundusze Europejskie dla Polski Wschodniej (European Funds for Eastern Poland), aimed at improving competitiveness and resilience. New initiatives also include tax breaks, job creation subsidies, and simplified administrative procedures for family-run businesses.

Scandinavia — Small Business as Social Contract

In Norway, small and medium-sized enterprises (SMEs) have access to a range of government support programs. One such initiative is SkatteFUNN, which offers tax deductions to companies engaged in R&D activities. Another is Eurostars, a cross-border funding program for innovative international collaborations. In addition, Innovation Norway offers grants, loans, and advisory services to entrepreneurs.

In Sweden, changes introduced in 2025 simplified the rules for issuing invoices, reducing the administrative burden on SMEs. The government continues to support small businesses with tax benefits and subsidies. The national budget for 2025 includes significant investments in infrastructure and research, creating new growth opportunities.

In Denmark, the Start-up Denmark program continues to attract foreign entrepreneurs and investors. The country also maintains the Vækstfonden, which offers financing for startups and scaling firms. Several public agencies provide tax incentives, grants, and consulting services for SMEs.

Looking at the broader European context, The Economist forecasts growing interest in domestic production and local entrepreneurship as a strategic response to global economic and technological disruptions. Countries such as Italy, Spain, and Greece are expanding tax benefits and job creation subsidies to support sustainable innovation and competitiveness in uncertain times.

Why “Small” Suddenly Matters — Geopolitically and Culturally

We live in an era where vulnerability is no longer the burden of the weak — it has become systemic. Large corporations with sprawling supply chains have proven too sluggish to respond quickly, too public to be flexible, and too centralized for an economy of fragments. Small and medium-sized enterprises, on the other hand, have shown themselves better suited for a world in upheaval: faster, more local, and more agile.

Whereas governments once turned to SMEs as a last resort in times of crisis, today they are the first element of long-term economic strategy. Under the influence of America’s recent “inward shift,” Europe has begun to feel out its own philosophy of economic decentralization — one where the entrepreneur is no longer a cog in the machine, but a cell in a living economic organism. And that may be the quietest, yet deepest, revolution of recent years.

The Quiet Resistance — Who Fears the Small, and Why

Not everyone is thrilled about the new romance with small business. In the corridors of Europe’s largest industrial associations, warnings are already being voiced: “Decentralization will lead to fragmentation,” “Government subsidies will distort the market,” “Small businesses can’t provide stable jobs.” Lobbyists for major retailers and energy conglomerates are especially vocal — for them, the rise of local competition isn’t modernization, it’s a threat to the status quo.

In Germany, representatives of the industry federation BDI have bluntly stated that “shifting focus from industrial clusters to scattered initiatives will dilute the country’s innovative potential.” Even in the European Parliament, a faction is calling for a “balance between the old and the new” — which, as we know, often means the old in a new wrapper.

But therein lies the paradox: resistance to small business is itself a recognition of its rising importance. If it were still marginal, no one would be pushing back.

Small as a Survival Strategy — Not a Trend, But a Template

Small business is no longer just about charming storefronts and friendly faces behind the counter. It has become part of a larger geopolitical and economic matrix — one in which resilience matters more than scale, and adaptability outperforms centralization.

Europe, observing the shift in the United States, intuitively realized that large systems don’t fracture from impact — they crumble from internal rigidity. And so the continent began to recalibrate its compass: away from fragile pyramids and toward flexible networks.

This is not a regression into the past — it’s a new kind of rationality. As if the continent suddenly remembered: when the towers fall, those who survive are the ones who know how to build bridges — not from glass, but from wood.