COUNCIL RESOLUTION of 9 December 1996 on realizing the full potential of small and medium-sized enterprises (SMEs), including micro-enterprises and the craft sector, through an integrated approach to improving the business environment and stimulating business support measures (97/C 18/01)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and

- to the Commission communication of 3 June 1994 entitled 'Integrated programme in favour of SMEs and the craft sector` and the Council resolution of 10 October 1994 on giving full scope to the dynamism and innovatory potential of small and medium-sized enterprises, including the craft sector and micro-enterprises, in a competitive economy (1),

- to Council Decisions 93/379/EEC of 14 June 1993 on a multiannual programme of Community measures to intensify the priority areas and to ensure the continuity and consolidation of policy for enterprises, in particular small and medium-sized enterprises, in the Community (2) and 97/15/EC on a third multiannual programme for small and medium-sized Enterprises in the European Union (1997 to 2000) (3),

- to the Council resolution of 22 November 1993 on strengthening the competitiveness of enterprises, in particular small and medium-sized enterprises and craft enterprises, and developing employment (4),

- to the Commission communication of 26 October 1994 which highlighted the need for a specific Community initiative taking into account the particular characteristics of small and medium-sized enterprises and the craft sector,

- to the Council conclusions of 6 and 7 November 1995 on industrial competitiveness and services to business,

- to the Council resolution of 27 November 1995 on small and medium-sized industrial enterprises (SMEs) and technological innovation (5),

- to the outcome of the European conference on craft businesses held in Berlin on 26 and 27 September 1994 and to the Commission communication of 12 December 1995 which identified special priority initiatives for the development of the craft sector and of small and micro enterprises,

- to the Commission communication of 8 September 1995 and the Council resolution of 22 April 1996 on the coordination of Community activities in favour of small and medium-sized enterprises and the craft sector (6),

- to the report submitted to the Madrid European Council on the role of SMEs as a dynamic source of employment, growth and competitiveness in the European Union,

Noting with interest the Commission communication of 10 July 1996 on an integrated programme for small and medium-sized enterprises and the craft sector;

RECALLING:

- the Commission's White Paper of December 1993 on Growth, competitiveness and employment, which emphasized the important contribution of small and medium-sized enterprises (SMEs) to the competitiveness of Community industry,

- the Commission communication of 14 September 1994 entitled 'An industrial competitiveness policy for the European Union`, the Council resolution of 21 November 1994 on the strengthening of the competitiveness of Community industry (7) and the conclusions of 7 April 1995 on an industrial competitiveness policy,

- Council Decision 96/413/EC of 25 June 1996 implementing a Community action programme to strengthen the competitiveness of European industry (8),

- the Commission's European confidence pact for employment, which aims at full mobilization of all the actors in a comprehensive strategy in the fight against unemployment,

- the conclusions of the Florence European Council which called for an integrated approach whereby national, regional and local authorities, the social partners and the Community institutions each take practical action in favour of growth and employment;

RECOGNIZING THAT:

- SMEs make a vital contribution to job creation and competitiveness within the European Union,

- the further development of SMEs is of great importance to economic growth, regional development and social cohesion in the European Union,

- there are a number of inhibitors which restrict growth and job creation in SMEs,

- SMEs face a complex business environment,

- there is a need to reduce the administrative burden for entrepreneurs and to simplify rules in force,

- an increased effort is necessary to stimulate and spread a truly entrepreneurial culture with the overriding goal of creating more jobs across all sectors of the economy of the European Union;

AWARE THAT creating a legislative and administrative environment favourable to the development of enterprise and effective support measures for SMEs are principally the responsibility of the Member States, in accordance with the principle of subsidiarity;

I

NOTES THAT:

the Commission's integrated programme for small and medium-sized enterprises and the craft sector is intended:

- as an initiative which aims to achieve greater consistency, effectiveness and transparency of individual actions in favour of SMEs,

- as a continuing overall framework for the implementation of actions under the multiannual programme for SMEs, concerted actions between the Commission and the Member States and other Community actions in favour of SMEs, taking particular account of the new strategic objectives identified in the Madrid SME policy paper and re-emphasized in the European confidence pact for employment,

and that the priority concerns of enterprise policy in the Community, as specified in the integrated programme, are:

- to simplify and improve the administrative and regulatory business environment,

- to improve the financial environment for SMEs,

- to help SMEs to Europeanize and internationalize their strategies, in particular through better information and cooperation services,

- to enhance SMEs' competitiveness and to improve their access to research, innovation, information technologies and training,

- to promote entrepreneurship and support target groups;

RECALLS THAT:

- a step towards administrative simplification has been taken with the creation and activities of the Committee on Improving and Simplifying the Business Environment, as the expression of the joint commitment of Member States and the Community to a policy of improving the administrative environment,

- a number of measures concerning simplification of Community legislation have been taken, notably the implementation of the business impact assessment system and the SLIMs (simplification of legislation in the internal market) initiative,

ACKNOWLEDGES THAT:

- the total cost of administrative burdens for SMEs remains high,

- the formalities associated with setting up new enterprises are a particular cause for concern,

- SMEs are heavily dependent on internal sources of finance and they experience difficulties in obtaining external finance,

- the costs of trading internationally are relatively higher for SMEs than for large enterprises,

- notwithstanding the substantive completion of the internal market and the consequential benefits for SMEs, their full participation in the internal market is still hampered by differences in the interpretation of legislation of the European Union and by technical barriers to trade;

RECOGNIZES THAT SMEs are still not benefiting sufficiently from many Community actions and programmes compared to their share of economic activity and their employment growth potential and that:

- Community financial instruments must be better oriented towards SME development,

- there are impediments to SMEs participating in public procurement markets, which should be addressed,

- the share of SMEs in vocational and management training programmes should be increased,

- consultation of organizations representing SMEs and the craft sector is necessary in the preparation of measures and policies of relevance to them at European level;

II

CALLS ON THE MEMBER STATES AND THE COMMISSION, acting in mutual consultation, to examine the extent to which the business environment for SMEs could be improved by addressing the structural impediments to the development of SMEs resulting from the legal, financial, administrative and regulatory framework;

to that end, to:

- promote administrative and regulatory simplification building on the work carried out in the Committee on Improving and Simplifying the Business Environment, focusing on the priority areas identified in the Madrid SME policy paper,

- foster an exchange of views between Member States on treatment of enterprise financing,

- speed up the full implementation of the Directives concerning the internal market, in particular in the public procurement, investment services and insurance fields,

- establish, as soon as possible, if they have not already done so, one or more contact points to help SMEs, to deal with intra-Community trade barriers, in accordance with the Council resolution of 8 July 1996 on cooperation between administrations for the enforcement of legislation on the internal market (9),

- work towards greater acceptance of the mutual recognition principle in the area of standards, so as to reduce technical barriers to trade for SMEs and ensure the effective operation of Decision No 3052/95/EC of the European Parliament and of the Council of 13 December 1995 establishing a procedure for the exchange of information on national measures derogating from the principle of the free movement of goods within the Community (10),

- facilitate access of SMEs to national and European programmes and other support measures,

- encourage adaptation of training programmes to the needs of SMEs,

- encourage the participation of women entrepreneurs and co-entrepreneurs, young entrepreneurs and entrepreneurs from disadvantaged groups in operational programmes to enhance their access to training, local services and cooperation networks;

III

CALLS ON THE COMMISSION, in concertation with the Member States:

to pursue intensive exchanges on best practice between Member States through existing Community programmes focused on:

- promoting a business culture and entrepreneurship at all levels, with particular focus on education and training systems and the stimulation of young entrepreneurs,

- stimulating the development of commerce and distribution enterprises, including a focus on the role of commerce in rural and urban areas;

to improve access by SMEs to the information society through carrying out and promoting the results of a series of pilot actions leading to the dissemination of best practice in the context of the Community action plan on the information society;

IV

CALLS ON THE COMMISSION:

fully to implement Community measures under enterprise policy, as well as under other relevant Community policies, particularly through the following:

- continuing to work to improve its cost/benefit evaluation system for Community legislative proposals and, in particular, completing its review of the business impact assessment system,

- pursuing the SLIMs pilot project (simplification of legislation for the internal market) and considering, in consultation with Member States, areas for more wide-ranging actions,

- improving further its procedures for processing complaints by business, including SMEs, about obstacles to the proper functioning of the internal market,

- improving access of SMEs to venture capital by European Investment Fund (EIF) equity investment in the capital of appropriate financial intermediaries,

- developing the Euro-Info-Centres as 'First Stop Shops` for SMEs, as appropriate, in the context of Member States business support networks, acting as a single interface directing requests to relevant networks and service providers, thereby facilitating access of all SMEs to the full range of Community programmes,

- identifying ways of enabling SMEs to participate fully in all Community programmes, while noting the Commission's intention to transmit to the Member States, not later than the end of 1997, a recommendation on ways to increase the share of SMEs in Community policies and programmes,

- introducing comprehensive measures to remove impediments to SME participation in public procurement, including action to ensure that the European Economic Interest Grouping (EEIG) can participate on equal footing when bidding for public contracts and submitting a communication on this matter not later than the end of 1996,

- encouraging SMEs to create or develop an activity in another Member State, through the removal of obstacles to cross-border investment and joint ventures within the European Union,

- improving the awareness of European SMEs as regards strategic advances by SMEs in third countries and strengthening the access of European SMEs to these countries through existing Community programmes,

- improving access of SMEs to Community RTD programmes and encouraging market oriented transnational technological development through better information and promotion as well as improved selection and management procedures, including reduced delays in decisions and payments;

V

RECOGNIZING THAT:

- small and micro-enterprises play an important role in terms of growth and generate a high proportion of new jobs,

- the job creation performance of the Community can be enhanced by improving the business environment for small and micro-enterprises at both Community and Member State level,

- small and micro-enterprises could benefit more from some Community actions and programmes,

- the burden arising from a complex business environment is heaviest for small and micro-enterprises,

- some Community financial instruments should be better oriented towards the needs of small and micro-enterprises,

- the share of small and micro-enterprises in vocational and management training programmes should be increased;

STRESSES THAT small and micro-enterprises have a central role in local development and employment and that women, young entrepreneurs and entrepreneurs from disadvantaged groups play an increasingly important role in the emergence of new small and micro-enterprises;

CALLS ON THE MEMBER STATES AND THE COMMISSION:

to give concrete and practical recognition to the particular role which small and micro-enterprises play in the generation and maintenance of employment in the European Union and to the particular difficulties of enterprises of such size arising from the burden imposed by a complex business environment;

Therefore, within the Community's existing measures, to take account of the special needs and priorities of small and micro-enterprises by the following actions:

- promoting targeted administrative and regulatory simplification,

- enhancing local development and employment initiatives,

- undertaking specific information and communication measures for small and micro-enterprises within existing programmes,

- addressing the needs of small and micro-enterprises in the transition to a single currency, particularly with regard to timing and information,

- improving access to Community programmes and particularly structural funds,

- promoting consultation of organizations representing small and micro-enterprises in the preparation of measures of relevance to them at both national and European levels;

Also CALLS ON THE COMMISSION in conjunction with the Member States, to undertake exchanges of best practice at national level aimed at improving support mechanisms in favour of small and micro-enterprises, taking into account the specific needs of those categories of enterprise, including appropriate arrangements for programme delivery;

Furthermore, CALLS ON THE COMMISSION to

- continue to develop innovative measures to improve the financial environment for small and micro-enterprises, addressing particularly the factors inhibiting their access to enterprise finance,

- ensure access of small and micro-enterprises to the information society in the context of the Community action plan,

- promote the involvement of small and micro-enterprises as subcontractors in the downstream phases of projects under Community RTD programmes.

(1) OJ No C 294, 22. 10. 1994, p. 6.

(2) OJ No L 161, 2. 7. 1993, p. 68.

(3) OJ No L 6, 10. 1. 1997, p. 25.

(4) OJ No C 326, 3. 12. 1993, p. 1.

(5) OJ No C 341, 19. 12. 1995, p. 3.

(6) OJ No C 130, 3. 5. 1996, p. 1.

(7) OJ No C 343, 6. 12. 1994, p. 1.

(8) OJ No L 167, 6. 7. 1996, p. 55.

(9) OJ No C 224, 1. 8. 1996, p. 3.

(10) OJ No L 321, 30. 12. 1995, p. 1.