Opinion on the integrated programme in favour of SMEs and the Craft Sector (94/C 393/33)

On 20 July 1994 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the integrated programme in favour of SMEs and the craft sector.

The Committee instructed its Section for Industry, Commerce, Crafts and Services to prepare its work on the subject. The Economic and Social Committee decided to appoint Mr Lustenhouwer to act as Rapporteur-General.

At its 318th Plenary Session (meeting of 15 September 1994) the Economic and Social Committee adopted unanimously the following Opinion.

1. Introduction

1.1. SMEs and the craft sector are high on the political agenda. Whilst in 1983 a 'European' Year had to be organized in order to focus political and public attention on the role played by small businesses in society in the EC, this role is now appreciated and recognized as a matter of course.

1.2. The European Union and its citizens are also becoming ever more 'enterprise-minded'. The Second Annual Report of the European Observatory () points out, inter alia, that every year some 1.5 million Europeans decide to go into business. Over the last 5 years, the number of enterprises in the EU has thus increased at an annual average of 9% per year, as against a 2.5% increase in population over the same period. It should however be pointed out that the failure rate for SMEs is regrettably still at a disturbingly high level for a variety of reasons, such as the quality of management and underfinancing.

1.3. Against this background it is thus hardly surprising that the European Commission has opted for an integrated approach to its activities in the field of SMEs (which should be based on Article 130 of the Treaty) as a follow-up to the White Paper on growth, competitiveness and employment.

2. The integrated programme

2.1. The Economic and Social Committee welcomes the fact that so soon after the publication of the White Paper, the Commission has endeavoured to adopt an integrated approach to tackling the problems facing SMEs in the EU and to coordinating the various measures already taken by the EU to assist SMEs.

This begs the question: has the Commission been really successful in its endeavours and can such an integrated approach also be achieved in practice?

2.2. Three points stand out after an initial examination of the integrated programme:

1. The programme differs from others in that no additional funds are provided for. The reason for this is that the current measures are as a rule funded from their own budgets which have already been approved and established, as is made clear in the table at the end of the introductory chapter of the Commission document.

2. The programme refers to a number of projects and actions already set out in the current multi-annual action programme for SMEs ().

3. The programme contains only a small number of really new measures.

Against this background, it is difficult for the Committee to interpret the contribution which this cataloguing of projects and actions makes to the establishment of an integrated body of measures. This does not detract from the Committee's appreciation of sections of the programme but it does believe that in this case there is an element of exaggeration.

2.3. The Committee also considers that if a logical package of measures is indeed to be established in the form of regenerated SME policy, there has to be the political will within the Commission to achieve this integrated approach. With this aim in view, there has to be a readiness to examine the impact on SMEs of all proposed measures and to give political substance to these measures.

2.4. The Committee is pleased to note that the first steps in this direction have been taken recently. The measures taken by the Commission in the areas of, for example, the funding of SMEs and the recent Commission Communication () and Recommendation () on the fiscal environment for SMEs, are excellent examples of what has been achieved and the Committee readily accords the Commission the praise which it deserves.

3. New measures

3.1.

Simplification of administrative procedures affecting enterprises

The Committee supports the Commission's endeavours to make a contribution, at EU level too, towards easing the administrative burdens placed upon enterprises in recent years. In the Committee's view, the proposed working party of experts in this field must cooperate closely with organizations representing SMEs in order to permit a realistic appraisal of the most pressing problems. The Committee takes the view that it too should undoubtedly be involved in the drawing-up of the reports by this working party in order to enable it to express its standpoint. There must also be some coordination with the work of the deregulation committee set up on a proposal from the German Minister for Economic Affairs. This committee is to examine the scope for abolishing or simplifying existing European (secondary) regulations in order to abolish unnecessary red-tape for enterprises.

3.2.

Coordination of measures to support enterprises

Given the limited scope for establishing a policy on SMEs at EU level, most initiatives are obviously taken by national and local authorities. Exchange of information with regard to best practice may also help to prevent a certain amount of inefficiency in policy-making. The Committee also warns against excessive expectations about the benefits to be gained from such an exchange of information and urges that the subjects be defined in a succinct and well-balanced way, so as to avoid interminable discussions. The imporance of such a discussion would also be enhanced if participation were not confined to the Commission and the Member States but extended to the European Parliament, the Economic and Social Committee and the Committee of the Regions. Before meetings are arranged to exchange such information, thorough preparations must clearly be made, in the form of an analysis and assessment of national experience, if meaningful discussions are to take place in practice.

Furthermore, the organizations representing SMEs should also be consulted about this exchange of information, as entrepreneurs' views on what constitutes best practice may differ considerably in a number of areas from those of government spokesmen.

4. Improving the environment for enterprises

4.1. The subjects dealt with in this chapter are very varied but what they all have in common is their importance to the policy on SMEs. They are virtually all subjects for which practical solutions must be found by concerted actions at both EU and national level.

The Committee thus supports the intensification of the impact analyses of measures on enterprises and looks forward to the expansion of cost-benefit analyses in respect of proposed EU legislation.

4.2. As regards the transfer of enterprises, the Committee considers that the wide-ranging intensive debate on the Commission Communication (), which the Commission itself describes as being desirable, may well not be achieved, as the Commission did not submit the Communication until the end of July 1994 and has set a deadline of 30 September 1994 for the submission of reactions. It is clearly impossible to provide in-depth reactions within such a short deadline to such a complicated issue where the legal, fiscal and financial situations in the Member States differ markedly. This is all the more striking since the Communication is accompanied by the conclusions of a congress held on this subject as long ago as January 1993. Apparently the Commission, which itself required a year and a half to examine these conclusions, expects the organizations which it is consulting to need only three months for the purpose!

The interest groups concerned should not be treated in such an unprofessional way on such an important issue.

4.3. The Committee also considers that problems relating to the transfer of enterprises and succession are above all the responsibility of the national authorities. These authorities should thus take all necessary measures without delay to prevent enterprises from losing their capital or closing in event of the failure to find a successor. In the next few years a large number of enterprises in the European Union will change hands since the 1960s generation of entrepreneurs will, in view of their age, start to transfer their enterprises or to retire.

The authorities and the intermediary advisory bodies need to adopt a careful approach and to provide guidance so that new entrepreneurs, working in a dynamic environment, will be able to ensure continuity as regards economic development.

5. Payments between enterprises

5.1. In view of the Opinion which it has issued on this subject (), the Committee is interested in the Commission Recommendations in this field. Assuming that a practical solution may be found, the legal cooperation referred to in the Integrated Programme for the purpose of obtaining injunctions for non-contested claims should make an important contribution to promoting cross-border transactions.

5.2. To conclude its observations on this chapter, the Committee points out with regret that the activities mentioned in point 1.5 of the Integrated Programme with regard to local services are absolutely meaningless and do not provide any basis for a judgement, not even in the light of the observations made on this matter in the Conclusions of the Presidency of the European Summit in Corfu (24 and 25 June 1994). The Committee reserves the option to take up this matter again, since the Commission has now indicated that it is to submit a detailed document on this subject to the European Council in Essen in early December 1994 ().

6. Support measures

6.1. In the Committee's view, one of the strengths of the Integrated Programme is that at long last a clear picture is presented of the EU actions and projects to assist SMEs. This is particularly apparent in those sections dealing with support measures. In a number of areas, the projects in question concern areas on which the Committee has already expressed its views. References may thus be made to these earlier Opinions, such as the Opinions on Community initiatives under the Structural Funds, education and training, and research and development.

6.2. A thorough evaluation of these activities does, however, need to be carried out in future. (Did the interest rate subsidies really lead to the creation of additional jobs? Did the Community SME initiative really improve management quality, above all in Objective I regions?)

The Committee firmly believes that the results of these measures must be critically monitored, as lessons may be drawn for the future from this exercise. This assessment should form part of the annual reports on the progress in implementing the Integrated Programme.

6.3. Finally, the Committee notes with approval the Commission's renewed attention in this programme to SME funding. The Committee strongly supports, in particular the improved operation of the financial markets at European level with a view to promoting participation in SMEs; this point was also made in an Opinion issued recently by the Committee on this matter ()().

7. Conclusions

7.1. In the past, the Committee has given its views on a number of subjects set out in the proposed programme and would therefore refer to its earlier Opinions on these matters. There is no need to reiterate here the views set out in those earlier Opinions, since both the Commission and the Committee are in agreement about the main aspects of the policy. The Committee thus has no difficult in endorsing the programme. It is, however, unable to summon up any real enthusiasm for the proposal. The main reason is that no guarantee is given that all the various elements of the programme will be effectively coordinated (could such a guarantee be given?). The Committee notes that responsibility for the activities involved is spread over a number of DGs and these activities fall within the remit of various Commission members. This does not intrinsically pose a problem. If however an integrated approach to SME policy is to be pursued and a clear stance is to be taken with regard to the importance of creating a favourable climate for enterprise, the integration of SMEs has, as pointed out above, to be a political task assumed by the Community as a whole.

7.2. If this aim is to be achieved, the remit of the Commissioner responsible for SMEs must have considerable political weight and there has to be a political commitment by the Council; the proposed programme provides both the wherewithal and the justification for such steps.

The Committee hopes that when the new Commission starts work early next year, explicit reference will be made to this standpoint in both the Commission's programme of work and the definition of the remit of the Commissioner concerned.

Done at Brussels, 15 September 1994.

The President

of the Economic and Social Committee

Susanne TIEMANN

() The European Observatory for SMEs, Second Annual Report, 1994, European Network for SME Research, EIM, Zoetermeer-NL.

() COM(92) 470 final.

() COM(94) 206 final, 25. 5. 1994.

() C(94) 1305 final, 25. 5. 1994.

() Commission Communication on the transfer of undertakings. Actions to assist SMEs. See OJ No C 204, 23. 7. 1994.

() OJ No C 249, 13. 9. 1993.

() See the Committee's Opinion of 1 June 1994 on the White Paper on Growth, Competitiveness and Employment, point 7 (OJ No C 295, 22. 10. 1994).

() Opinion of the ESC on the Communication from the Commission on the financial problems experienced by small- and medium-sized companies [COM(93) 528 final] adopted on 6 July 1994.