Brussels, 25/06/2008 (Agence Europe) - On Wednesday 25 June 2008, the European Commission unveiled the Small Business Act (SBA) for Europe, an action plan to stimulate the growth of small and medium-sized enterprises (SMEs) and encourage them to create more jobs (see EUROPE 9686 and 9668). The SBA sets out ten political principles to guide action for SMEs at national and European level, like thinking of SMEs first, encouraging entrepreneurship and ensuring easier access to funding. It also includes a number of flagship items of legislation like a draft regulation to create a statute for European private companies (SPE). Draft rules will be adopted next week to revise the rules granting SMEs block exemptions from EU state aid legislation and EU rules on reduced rate VAT for local or highly labour intensive services. Hoping to gain the backing of the European Council, the Commission also included an integrated follow-up mechanism for the revised Lisbon Strategy to ensure progress is made with the SBA measures. European competitiveness ministers will be discussing this at their meeting in Versailles, France, on Thursday 17 and Friday 18 July 2008.
EU Enterprise Commissioner Günter Verheugen said an attempt would be made to fill the gaps that have been identified in SME policy. He identified several areas where action at EU level would provide value-added, namely administrative simplification, state aid and measures to combat late payment of commercial transactions. On the latter point, the SBA announces a review in the spring of 2009 of Directive 2000/35/EC to increase pressure on bad payers. On SME access to public tender, Verheugen admitted that the idea of reserving public contracts for SMEs had been ruled out after studies showed that some small companies were very dynamic in this domain. The adoption of a voluntary code of conduct is being recommended instead in order to encourage public authorities to make their tender procedures more attractive to SMEs and to get them to provide greater information about contracts below the EU cut-off level.
SPE (European private company). 'Entrepreneurs will no longer need to go through a legal labyrinth if they want to do business in the Single Market,' explained EU Internal Market Commissioner Charlie McCreevy as he unveiled the draft regulation to introduce a statue for European private companies (SPE, see EUROPE 9680). In order to set up in several Member States, SMEs face a plethora of different legal set-ups (Gmbh in Germany, SARL in France, limited company in the United Kingdom, and so on), which is of greater benefit to lawyers than anyone else. McCreevy explained: 'The potential savings on legal costs of the SPE could be between €2,000 and €10,000 for setting-up companies and between €750 and €8,000 for day-to-day operating costs.' The regulation covers areas like the creation of companies, capital requirements, shareholders, internal organisation and staff participation in the SPE. It allows SPEs to be created with a single euro as the minimum capital requirement. Issues relating to labour law and tax legislation remain in the hands of the Member States. McCreevy said he was confident that the regulation would be adopted during the current EP's term of office, hoping the rules could come into force part way through 2010.
EIB. Philippe Maystadt, President of the European Investment Bank (EIB), confirmed the European Commission's analysis that SME funding remained a problem, particularly for strongly growing innovative companies. The EIB wants to improve on the indirect support it gives SMEs through the intermediary of a network of a hundred-odd banks. Maystadt said this improvement was based on four key terms - simplification, modernisation, diversification and transparency. The EIB will simplify the obligations placed on banks to report back to it on their activities to support SMEs and will authorise investment in 'intangibles' like changing production processes, setting up distribution networks and buying licences. The EIB will share the risks of investment in intangibles with the banks. SMEs should be informed that the advantageous loan conditions they are benefitting from depend on the EIB. The EIB grants €6 billion of aid to SMEs each year and this is expected to increase in the future. Maystadt said that a €40 million fund would be launched in September specialising in microcredit.
State aid. Next week, the Commission will adopt a draft regulation updating EU rules exempting Member States from the requirement to notify the European Commission of aid they grant to SMEs. It will be made possible to grant greater state aid, which will go from 7.5$ to 10% for medium-sized companies and from 15% to 20% to small companies.
The new European rules will include aid granted in the form of risk capital and will facilitate the granting of public aid for training, research and development and protection of the environment. To help member states make better use of Community regulations, the Commission will also publish a guide on state aid for SMEs. SMEs, especially start-ups, are often either put off by cumbersome procedures or unaware of what exists.
There were a few changes between the provisional and the definitive versions of the SBA. With regard to establishing technical norms and standards, the Commission no longer requires standardisation bodies to make new standards available free of charge for a period of five years. It now asks these bodies to “reconsider” their economic model “to reduce the cost of access to the standards”. The target of increasing the level of SME involvement in the research and development framework programme (7th RDFP) from 15% to 19% has also gone by the board. The Commission says simply that it will pursue efforts to encourage SME involvement in the 7th RDFP through simplifying procedures, better communication and use of higher levels of funding. (M.B./C.D./transl.rt)