The Cyprus Presidency of the Council of the EU and the European Parliament reached, on the evening of Wednesday 3 June, a provisional political agreement on one of the four proposals in the ‘Omnibus IV’ package: the proposal for a directive on mid-sized companies, the ‘small mid-caps’, i.e. companies with fewer than 1,000 employees (see EUROPE 13816/11).
This was the second trilogue meeting on this legislative simplification strand. In this new simplification package, the Commission had proposed, among other things, extending simplification measures to SMEs and these new mid-sized companies in the Markets in Financial Instruments Directive (MiFID) and the directive on the resilience of critical entities.
Other proposals were put forward in this ‘Omnibus IV’, notably a proposal for a directive on digitalisation and common specifications and a proposal for a regulation on digitalisation and common specifications. These latter aspects will be the subject of further trilogues on 9 June.
As regards the strand on which agreement was reached on 3 June, the main objective is “to extend certain mitigation and support measures intended for SMEs to companies that have exceeded the SME definition. These companies play an essential role in the EU economy, accounting for 6% of total employment and being strongly present in key sectors for European competitiveness, such as electronics, aerospace and defence, energy, energy-intensive industries and health”, the Presidency explains.
A new category of small and medium-sized enterprises (SMEs) should therefore make it possible to: - avoid a cliff edge effect and facilitate the transition from SMEs to mid-sized companies; - allow mid-sized companies to retain the same supportive environment as before when they were classified as SMEs (fewer than 250 employees); - provide further incentives for SMEs to grow.
The Commission’s initial proposal defined this new category of companies as those with fewer than 750 employees and with either turnover of no more than €150 million or an annual balance sheet total of no more than €129 million.
In the provisional agreement, the co-legislators raised these thresholds to companies with fewer than 1,000 employees and with either annual turnover of no more than €200 million or an annual balance sheet total of no more than €172 million.
Furthermore, within five years of the new legislation entering into force, the Commission will review the application of this definition, in particular its impact on reducing administrative burdens and on the competitiveness of SMEs.
Lastly, the provisional agreement extends by 15 months, following its entry into force, the deadline for transposition of the directive in order to give Member States the time needed to implement the amendments. (Original version in French by Solenn Paulic)