That's where your tow ring would go if you needed a tow. There should also be a similar hole on the front. In my old C class the tow ring was in a compartment in my trunk. It will look like what's in the attached link. You just screw that into the hole and then the eyelet can be used to hook a cable or rope for towing.
https://www.amazon.com/Genuine-Smart-Fortwo-Hook-Towing/dp/B00IOW0CY0