EN

Brussels, 06.06.2005

SEC(2005) 768

COMMISSION STAFF WORKING PAPER

Progress report on the implementation of Phase I key actions of the Action Plan:

The European Agenda for Entrepreneurship

{COM(2004) 70 final}

TABLE OF CONTENTS

1. Introduction (...)3

2. Strategic Area One: Fuelling entrepreneurial mindsets (...)4

2.1. Fostering entrepreneurial mindsets through school education (key action 1) (...)4

3. Strategic Area Two: Encouraging more people to become entrepreneurs (...)6

3.1. Reducing the stigma of business failure (key action 2) (...)6

3.2. Facilitating the transfer of businesses (key action 3) (...)7

3.3. Improving social security of small business owners (key action 4) (...)7

4. Strategic Area Three: Gearing entrepreneurs for growth and competitiveness (...)8

4.1. Tailor-made support for women and ethnic minorities (key action 5) (...)8

4.2. Facilitating SME´s business co-operation in the internal market (key action 6.A) (...)9

4.3. Fostering innovative clusters (key action 6.B) (...)9

5. Strategic Area Four: Improving the flow of finance (...)10

5.1. More equity and stronger balance sheets (key action 7) (...)10

6. Strategic Area Five: Creating a more SME-friendly regulatory and administrative framework (...)12

6.1. Listening to SMEs (key action 8) (...)12

6.2. Simplification of tax compliance (key action 9) (...)13

7. Results to date (...)14

Annex: Table reflecting progress made per sub-action 17

1. Introduction

The Action Plan: The European Agenda for Entrepreneurship [1] was adopted in February 2004 in the light of the results of the public consultation launched by the Green Paper on Entrepreneurship [2]. The Action Plan suggests that, to further the entrepreneurship agenda, the Commission would act in five strategic policy areas:

(1) fuelling entrepreneurial mindsets;

(2) encouraging more people to become entrepreneurs;

(3) gearing entrepreneurs for growth and competitiveness;

(4) improving the flow of finance; and

(5) creating a more SME-friendly regulatory and administrative framework.

This mid-term progress report has its origin in the Action Plan’s text itself, which states that, from 2005 onwards, the Commission will draw up a report on progress made towards the objectives set and different “key actions”.

To transform the five Entrepreneurship Action Plan strategic areas into concrete results and to provide more detailed information on what the Action Plan means in practice, the Commission defined a series of 9 “key actions” for 2004 and 2005 (phase I key actions) Each of them is described in a standard way in a key action sheet, reflecting background, objectives and sub-actions. A list of already existing good practice examples appears as an Annex to the sheets. These good practices aimed at gearing inspiration, show how some Member States have already implemented actions that support the Action Plan objectives.

The key actions are addressed to both the Commission and, under the open-method of co-ordination, national and regional policy-makers and other relevant stakeholders. The phase I key actions are the following:

· Key action 1, Fostering entrepreneurial mindsets through school education;

· Key action 2, Reducing the stigma of business failure;

· Key action 3, Facilitating the transfer of businesses;

· Key action 4, Improving social security of small business owners;

· Key action 5, Tailor-made support for women and ethnic minorities;

· Key action 6.A, Facilitating SMEs business cooperation in the internal market;

· Key action 6.B, Fostering innovative clusters;

· Key action 7, More equity and stronger balance sheets;

· Key action 8, Listening to SMEs;

· Key action 9, Simplification of tax compliance.

Each key action is the umbrella for a series of sub-actions. A sub-action is an operating part with independent objectives and timing that, together with other sub-actions, contributes to the overall key action’s purposes. The pie chart below shows the current status of the existing sub-actions (see also the annex):

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x.x | This report is structured on the basis of the five strategic areas and nine key actions above-mentioned. Small “clocks” next to paragraphs reflect the status of the sub-actions (in progress, nearly finished, etc.). The progress is indicated with regard to the Commission efforts. Consequently, a sub-action is considered completed even if Council and/or European Parliament action is still pending. The small boxes on the left intend to be a guidance to the reader as well; they show the key action number and a letter, which stands for the sub-action as listed in the key action sheets [3]. For example, 1.A means that we are reading one of the sub-actions of key action 1 (concretely the sub-action A in that key action sheet). The same reference system has been used in the annex to this document. |

2. Strategic Area One: Fuelling entrepreneurial mindsets

Without prejudice to other Commission initiatives in favour of a better appreciation of entrepreneurs and of creating greater awareness of a career as an entrepreneur, key action 1 was put in place to foster entrepreneurial attitudes and skills among young people and entrepreneurship education.

2.1. Fostering entrepreneurial mindsets through school education (key action 1)

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1.A | The booklet “Helping to create an entrepreneurial culture” was published under DG Enterprise and Industry publications series in 2004 and disseminated in 12 languages. Some 21 examples of good practice are proposed in promoting the spirit of enterprise in young people through the education system, from primary school to university. A short description is provided for each good practice, along with contact details of the organisations or institutions promoting that particular practice, so that further information can be easily obtained. |

| Following a series of technical reports on the subject, a Commission Communication on entrepreneurship education is under preparation. DG Enterprise and Industry Directorate-General and DG Education and Culture have joined efforts in order to present the state of play of current developments and good practice examples which should enable to promote entrepreneurship education more systematically in Europe. |

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1.B | The Best Procedure project on “Mini-companies in secondary education” focuses on pedagogical tools that were identified as particularly effective by the 2001-2002 Best procedure project on “Education and training for entrepreneurship”. A final report, currently under preparation, will, on the one hand, present a definition of mini-companies and, on the other hand, explore programmes and practices using these methodologies, highlighting factors for success and existing support from public authorities. |

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1.C | A joint group of national experts coordinated by Education and Culture DG discussed progress on Entrepreneurship education [4]. The conclusions and recommendations from the joint working group endorsed the results of previous activities carried out by Enterprise and Industry DG (Best Procedure projects), thus addressing a coherent message to the national ministries responsible for education. It is for instance recommended that different Ministries cooperate at national level for the promotion of entrepreneurship education; that national curricula include explicit objectives for entrepreneurship; and that schools are provided with practical support and incentives. |

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1.D | The 2004 Charter for small enterprises reporting exercise [5] had “Education for entrepreneurship, especially secondary education” as a priority area. Within the Member States Report [6], the chapter on education for entrepreneurship contains a comparative table on the implementation of selected indicators; good practice examples; relevant conclusions; and specific recommendations for action. The good practices identified will be presented in a workshop on entrepreneurship education within the June 2005 Conference on the Charter for small enterprises [7]. |

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1.E | The Commission’s proposal for an integrated action programme in the field of lifelong learning includes the promotion of an entrepreneurial spirit among its objectives. Accordingly, the next generation of education and training programmes [8] will take into account issues related to entrepreneurship and enable wider participation than in the past thanks to the envisaged simplification of administrative and financial procedures. Also, the proposed Youth in Action Programme 2007-2013 will include among its main objectives encouraging in young people creativity and the spirit of initiative and enterprise. |

3. Strategic Area Two: Encouraging more people to become entrepreneurs

To alleviate some burden of risk intrinsically linked to entrepreneurship, the Commission launched key actions 2 to 4, addressing key subject-matters such as the prevention of business failure, the dissemination of a better understanding of failure-wise issues, facilitating business transfers and the possibilities social security schemes offer to entrepreneurs.

3.1. Reducing the stigma of business failure (key action 2)

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2.A | The fifth report on Implementation of the European Charter for small enterprises, published on 8 February 2005 [9], has “better regulation, especially bankruptcy law” as a priority area. A specific questionnaire based on the final report of the expert group on “Restructuring, bankruptcy and a fresh start” [10] recommendations was used to assess Member States` progress. The result is presented in a comparative table with a scoreboard and illustrated by good practice examples. Key recommendations for the future range from the usefulness of external advice in preventing bankruptcy and encouraging settlements, through the importance of streamlined and predictable insolvency proceedings, to the importance of clearly distinguishing between fraudulent and non-fraudulent bankruptcies so as to improve the success rate of fresh starts. The workshop on bankruptcy law within the June 2005 Conference on the Charter for small enterprises will present the good practices identified. |

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2.B2.D | Mid-2004 the Commission launched the two-pronged MAP [11] project on “Stigma of failure and early-warning tools”. The expert group for this project, gathering more than 30 members, met for the first time in February 2005. Experts provided with inputs both for putting in place a self-evaluation test for entrepreneurs for risk-assessment and for elaborating an info kit to promote better understanding of business failure. Following the exchange of experiences on the awareness for prevention of failure and the use of support services by entrepreneurs, a first version of the self-evaluation test has already been drafted and circulated amongst experts. |

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2.C | A European conference on insolvency matters shall further public agenda on action in favour of fresh start of previously failed entrepreneurs and help spreading good practices on the four axes of the Best procedure project on “Restructuring, Bankruptcy and a Fresh start”. Preparation has started; an exact date and format have to be decided. |

3.2. Facilitating the transfer of businesses (key action 3)

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3.A | As a first step to the new Commission Communication on business transfers, we obtained information on progress made by Member States in adopting the 1994 Commission Recommendation on “transfer of small and medium-sized enterprises” [12]. The new Communication will report on legal and fiscal achievements and then focus on “soft” factors (e.g.- preparation and emotional aspects linked to transferring a business). |

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3.B | In the context of facilitating transfer of SMEs ownership, the Commission launched in 2004 a project to provide a platform for participating countries to agree on the most essential features for transparent market places matching supply and demand. More than 20 experts take part in this project called “Fostering uniform transparent market places” and met in February 2005. They identified existing inefficiencies and possible ways to tackle them. The final report should facilitate the setting up of transfer market places. |

3.C | The Enterprise Programme Management Committee (EPMC) [13] rejected the Commission proposal on analysing the reasons for success and failure of SME transfers in Europe. Sub-action 3.C has been cancelled. |

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3.D | The Commission adopted the proposal for the Competitiveness and Innovation Framework Programme (CIP) on 6 April 2005 [14] with a proposed budget of more than €4 billion. This integrated tool running from 2007 to 2013 will include new guarantee instruments to guarantee equity and quasi-equity instruments for transfer of business purposes. Commission financial instruments will not only be available for start-ups. The Competitiveness and Innovation Programme will be presented to the European Parliament and the Council for approval. |

3.3. Improving social security of small business owners (key action 4)

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4.A | A European seminar on the social protection of women entrepreneurs, independent and co-working spouses took place in June 2004 in Brussels allowing drawing up proposals for better social regulation in the EU, to compare the reasons behind deficiencies in social security coverage and to identify good practices [15]. The seminar allowed not only to restart the debate on the situation of some sensitive statutes, but also to link some European organisations of women heads of enterprises concerned with these issues, while enabling them to meet and submit to the European Commission their position on the subject. |

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4.B | A study on the influence of the social coverage level for entrepreneurs and their co-helping partners on the decision taken by the new entrepreneurs at the moment of creating their company is about to be launched. In particular, the study will compare national legislations and social security related invalidity, pensions, survivors (especially co-helping partners), unemployment, and social insurance in the event of bankruptcy. An expert group will map the situation in each country and will participate in a good practice exchange. Countries participating [16] in the Multiannual Programme for Enterprise and Entrepreneurship [17] are currently appointing the expert group members. |

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4.C | Beginning with a fact-finding study followed by a series of expert meetings in 2003 and 2004, the Commission undertook a project to analyse the obstacles that might make the change from dependent employee to self-employed business owner particularly difficult. The expert group final conclusions and report “Second Career” are available on-line since summer 2004 [18]. The group of experts found that the most important problem faced by dependent employees who want to become self-employed is the often unclear legal definition of the self-employment status. Another structural problem that might prevent employees to risk changing to self-employment is the possible loss of unemployment insurance claims. |

4. Strategic Area Three: Gearing entrepreneurs for growth and competitiveness

Since the Commission is committed to fostering top-class and client-oriented support services, it launched the key action 5 focussing on facilitating women and ethnic minorities’ access to specific support measures and networking. Networking is also one of the main purposes on key action 6 which, for management reasons, was split in key action 6.A (match-making events) and key action 6.B, favouring clusters.

4.1. Tailor-made support for women and ethnic minorities (key action 5)

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5.A5.B | The Commission launched the tendering procedures to carry out a study to identify national measures and support schemes for promoting ethnic minority entrepreneurs and to identify good practice. It shall be signed mid-2005. Following the evaluation procedure for the study, meetings with national experts on this issue will follow. |

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5.C | In order to bring together public administrations, professional organisations and finance providers and to explore innovative approaches facilitating female entrepreneurs’ access to finance, the Commission has envisaged organising a seminar on access to finance. It should take place in Autumn 2005. |

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5.D | With an aim to facilitate networks amongst business organisations of women entrepreneurs and disseminating links, significant initiatives, etc., the portal “Women’s Entrepreneurship” was put on-line in January 2005 [19]. The portal is open to host any worldwide organisation, network, project or event relevant to women entrepreneurship. |

4.2. Facilitating SME´s business co-operation in the internal market (key action 6.A)

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6.A.A | Within the context of the Euro Info Centres (EIC) [20], a methodological approach to “Business Co-operation” [21] has been developed with the help of European experts (workshop, training sessions, etc). It is supported by a “Business Co-operation database” (partner search database which contains a large amount of cooperation profiles) and includes a standard set of instruments for the network services on international Business Co-operation that secure a common and unified EIC service in the field of activity. The network effect is thereby exploited accordingly. These instruments are refined and managed by DG Enterprise and Industry. The system and service allow for exchange of company profiles and Match-Making of SMEs across Europe and beyond. “Business co-operation” has been put forward as one of the core activities of the EICs in 2005. The EIC network is currently conducting Business Co-operation and match-making events at trade fairs and taking advantage of the assets and resources of such a framework. EICs network members and their host structure can benefit as well from a fair trade calendar regularly updated.In the “Pan-European Business Co-operation Schemes - PES” 2004 – 2006 fostering inter-enterprise relations and competitive a Pan-European website was created in April 2005 with references to the 6 PES-Schemes [22]. The “Pan-European Business Co-operation Schemes” consists of 32 business- and match-making events in 20 industrial sectors or related commercial activities at major international trade fairs in the EU. Around 4000 companies from EU 25, EFTA/EEA countries, candidate countries as well as Russia, Ukraine and Moldova participate. 8 pilot events have taken place so far with more than 1 200 companies participating (in Hanover, Stuttgart, Milan, Madrid, Paris, etc) which have been well received. After the pilot phase the scheme will be further refined to serve as a basis for continuous activities. |

4.3. Fostering innovative clusters (key action 6.B)

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6.B.A | The 10th update of the Work Programme “Research and Innovation” to be adopted in July 2005 will be the framework for the launching of a study on mapping industrial clusters in the EU25 and establishing a mechanism for monitoring their evolution over the time. The call for tenders for the study is expected to be launched in Autumn 2005. |

6.B.B | DG Research has cancelled this sub-action B. |

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6.B.C | A working group of 14 Innovation Relay Centres (IRCs) has met in 2004 and 2005 for developing cooperation between the IRC network and sectoral clusters. This should result in promoting innovation, technology transfer and transnational technology cooperation amongst business organisations. An agreement on the definition of clusters and cluster initiatives has been reached. 28 clusters with working relationships with IRCs have been surveyed and results analysed. The group is currently working on the definition of services to clusters, identification of good practices as well as a template for agreement for cooperation between an IRC and a cluster. The final results of the group are to be presented at the IRC annual conference end of June 2005. |

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6.B.D | With the objective of creating a network of regions interested in cluster-based strategies for innovation and economic development, a group of 13 members representing multiple European regions have met in 2004 and March 2005. Key challenges to cluster development and topics for coming meetings have been identified. The action is organised in a way that the participants, who are movers and shakers in their regions, go through a learning/training process broken down into a series of modules. The first meeting brought consensus of participating regions on the objectives, expected outcomes and operation within a sub-group and on the structuring of the learning modules. As to such structuring, topics were defined and then sub-groups responsible for each topic were created. |

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6.B.E | 59 proposals were received following the publication of the call of proposals for the action “Networking business clusters” late in 2004 under the “Research and Innovation” activity area of the Commission Research and Development 6th Framework Contract. Some 11 proposals might be the selected ones leading to three year-contracts with a total budget of €10 million. The contractors will provide support to both the networking of existing business clusters and joint projects in sectors such as ICT, biotechnology, space, energy and automotive. |

5. Strategic Area Four: Improving the flow of finance

Since access to finance is essential for firms at any stage of their life, the Commission launched key action 7 in order to intensify its actions in various finance-related fields, ranging from business angel financing, through favouring debt finance via national taxes, to State aid rules relating to risk capital.

5.1. More equity and stronger balance sheets (key action 7)

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7.A | In order to evaluate the state of business angel financing in Europe, a group of national experts met in June 2004 and data collection was made in the second half of 2004. The final survey cannot be considered as representative because of the lack of replies from France, United Kingdom and Germany. The European Business Angel Network (EBAN) has been urged to take over the data collection effort. |

| The expert group of the project on “Best practices in accessing early-stage finance”, aimed at identifying the best national practices and at promoting them as potential models for other countries, has met already once in October 2004. The criteria to select the public sector good practices in early-stage financing are being drafted. Project results will feed the risk capital conference co-organised by the Commission and the UK Presidency and which shall take place in October 2005. |

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7.B | The new Community risk capital instruments to be included in the Competitiveness and Innovation Framework Programme (2007-2013) [23] have been redesigned for increased flexibility and budget. The Competitiveness and Innovation Framework Programme proposal has to be approved by the European Parliament and the Council. |

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7.C | Dissemination conferences on the introduction of the new Basel Capital Accord (Basel II) have been organised all around Europe since the second half of 2004. By July 2005 60 information conferences will have taken place. Representatives of SMEs, banks and business organisations will have been gathered to discuss ways to prepare for a rating culture that will result from the implementation of the reform of the bank legislation under Basel II. A guide on how to deal with the new Basel Capital Accord is being printed. |

| A study on how to use asset-backed securities in increasing the availability of SME lending was posted on the Commission website in December 2004 [24]. The report commences with a description of securitisation and an overview of US and European securitisation volumes, including those in the SME sector. Then it tackles the key issue, namely, does securitisation aid SME access to finance? In the closing section, the report goes through possible developments of the market, which could facilitate increases in the volume and efficiency of SME securitisations, and discusses how continuing public sector support might act as a catalyst in deepening the SME securitisation market. |

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7.D | The expert group for the project “Effects of tax systems on the retention of earnings and the increase of own equity” has agreed on the tendering specifications for a study. The Commission launched this project mid-2004 with a view to identifying ways of promoting retained earnings as a means to strengthening the capital base of companies, especially the smaller ones. The study will examine the understanding and perception of the relevant tax provisions by business owners as basis for their decision on the retention of earnings or the distribution of profits. Because of a possibly divergent tax treatment of sole trader enterprises, partnerships and corporations and SMEs according to their size, all these variations will be differentiated and analysed. |

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7.E | On a capital market sometimes short of financial resources, European companies, and in particular small and medium-sized enterprises (SMEs) and the high-technology sector, face an equity gap. In order to ensure that European enterprises do not become over-dependent on debt finance, the European Union prones a general policy in favour of promoting risk capital. Late in 2004 the Commission published a Vademecum [25] describing the possibilities Member States currently have outside the specific sectors to promote innovation through State aid [26] without distorting competition to an extent contrary to the common interest. Moreover, the Commission intends to produce in 2005 a Communication in which the need and potential to expand the possibilities to aid innovation will be explored. Studies, consultations and preparatory work for adoption of a revised framework for State aid to research and development and a revised Communication on State aid to risk capital [27] are in progress. |

6. Strategic Area Five: Creating a more SME-friendly regulatory and administrative framework

In order to reduce and simplify regulatory and administrative burdens in relevant areas for entrepreneurs, the Commission launched key action 8, focused on giving SMEs a stronger voice in decision-making processes, and key action 9, intended at simplifying burdensome tax compliance procedures related both to business direct taxation with cross-border activities and to the value added tax (VAT).

6.1. Listening to SMEs (key action 8)

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8.A | The Commission launched the Best project on “Consultation of stakeholders in the shaping of small business policy at national/regional level” with a view to improving consultation mechanisms via benchmarking the existing ones. A group of national experts has already met three times so as to exchange expertise. The results of an online survey, launched via the Interactive Policy Making (IPM) tool [28] and reflecting the views of public administrations and business organisations across Europe, are available on the Commission website [29] and on the “Your Voice in Europe” [30] web pages. Even though about 55 of business organisations answered that government consults either always or frequently with the small business community when proposing new regulations affecting business, some 60 per cent of respondents find that the consultation process existing in their country is not satisfactory. |

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8.B | Mechanisms such as the SME Envoy and the inter-service SME Network have contributed to ensuring better consideration of SME dimension in EU policy making. The SME Envoy, a recognised interface between the SME Business Community and the Commission services, has contributed in particular to further integrating SME issues in the next programming period of Commission research and regional policies. The SME Envoy Report issued in February 2005 [31] presents a unique overview of all EU programmes and initiatives in favour of SMEs, making several recommendations on how to improve SME participation in EU programmes and initiatives. The inter-service SME network has contributed to increase the exchange of views among Commission services on EU issues, thus contributing to a more “SME-friendly” approach throughout all Commission activities. At the same time Commission impact assessments will take into account the SME dimension in the evaluation of the effect of a proposed legislation on businesses. Finally, the future nomination of a Deputy SME Envoy and the creation of a new unit in charge of horizontal SME policies, also supporting the SME Envoy, will both contribute to reinforce the capacity of the SME Envoy to intervene throughout Commission policies and to make its voice heard. |

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8.C | The SME test panel project has been integrated in the Specific Action to be developed by the Euro Info Centres (EIC) network in 2005/2006 and will enable the direct involvement of SMEs in specific areas of policy making through a consultation mechanism under the responsibility of EICs. The call will be launch in the coming months. |

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8.D | Thanks to an active promotion of the IPM Exploitation Mechanism throughout Commission, different services have already benefited from data obtained through the IPM tools, helping them to obtain feedback from SMEs on their programmes and legislative initiatives. In practice, the IPM Exploitation Mechanism has been promoted in several inter-services meetings, in particular in those related to “New Approach” directives [32]. As a result, some services (e.g. those in charge of the following fields: low voltage, medical devices and pressure equipments) have requested the launch of on-line consultations or the review of the data encoded in the IPM feedback database, then influencing their original proposal according to the feedback obtained. Other contacts have also taken place with services responsible for customs, information society, and environment in order to know better the opinion of SMEs as regards policy initiatives taken. A report reviewing the different exploitation activities (in particular of cases encoded in the IPM database) and showing how the feedback from SMEs has been used, was issued in February 2005. |

6.2. Simplification of tax compliance (key action 9)

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9.A | In June 2004 the Commission published a document entitled “Outline of a possible experimental application of Home State Taxation to small and medium-sized enterprises”. It explains a pilot project aimed to tackle the tax obstacles encountered by small and medium-sized enterprises when they operate in other EU Member States in addition to their own by granting them the possibility to apply the corporate tax rules of their home state only. A Commission Communication on Home State Taxation promoting such pilot project has been drafted. The draft takes stock both of the public consultation run till end of 2004 and stakeholders´ replies to a specific questionnaire. The related impact assessment is nearing finalisation. |

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9.B | A proposal [33] for a Council Directive amending Directive 77/388/ECC with a view to simplifying value added tax obligations was published in October 2004 and then subject to discussions in the Working Party on Tax Questions – Indirect Taxation (VAT) at the Council. The proposal concerns a VAT One-Stop-Shop System so as to simplify current VAT compliance obligations for cross-border traders supplying goods and/or services to other EU member States. The Commission proposal is currently being discussed by the relevant committees of the Council and the European Parliament. If it is adopted in the second half of 2005, the final implementation of the One Stop Shop System is expected to be on 1 January 2007 at the earliest. |

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9.C | The MAP project “Simplified tax compliance procedures for SMEs” was launched mid-2004. The 25-members expert group has already met and identified high potential areas for simplification in participating countries in view to reducing taxation-wise administrative burden for SMEs. Corporate income tax, income tax and wage tax are the backbones of this benchmarking exercise. Based on the existing difficulties pointed out by SMEs, the experts will be focussing on tax obligations in the field of registration, filing tax returns, tax accounting/ documentation and payment of taxes. |

7. Results to date

The actions taken in the context of the Action Plan aim at showing results in terms of their impact on entrepreneurial performance in the EU. Three were the main indicators retained in the Action Plan text: more entrepreneurial mindsets; better business performance translating into more competitiveness and growth; and a better business climate. Phase I key actions will represent clear progress for entrepreneurship once delivered.

The nine 2004-2005 key actions were started in 2004 with good progress on many sub-actions (see also the annex). The number of sub-actions being originally 38, some 25% are either completed or nearing completion, while 19 are well progressing as planned. Two sub-actions were dropped.

Examples of completed activities related to the Strategic Area “fuelling entrepreneurial mindsets” are the publication of the good practice booklet “Helping to create an entrepreneurial culture” or the joint efforts of Enterprise and Industry DG and Education and Culture DG leading to the integration of entrepreneurship and SMEs in the next generation of education and training programmes, currently under examination by the other Community institutions. Furthermore, the latest report on the implementation of the European Charter for small enterprises in the Member States contains a full chapter on entrepreneurship education showing EU25´s performance as to a series of selected indicators.

In the context of “encouraging more people to become entrepreneurs”, the recommendations from the Best project on “Restructuring, Bankruptcy and a Fresh Start” were successfully integrated into the Charter reporting process, the June 2005 Conference on the Charter for small enterprises representing its culmination. As to social security matters, the European seminar on the social protection of women entrepreneurs, independent and co-working spouses in June 2004 allowed to restart the debate on such sensitive matter, while the “Second career” project conclusions on the social coverage of employees and self-employed were published in the shape of an expert group report.

One item for “gearing entrepreneurs for growth and competitiveness” is boosting entrepreneurship and support services for specific target groups. The Women’s entrepreneurship portal is on-line since January 2005 and represents a step forward for female entrepreneurship networking. Linked to the project on Business co-operation, a series of pilot matchmaking events have been held.

As far as “improving the flow of finance” is concerned, tangible upshots have already been delivered. Both the Commission proposal for a Competitiveness and Innovation Programme including risk capital instruments and the study on asset-backed securities have been made public. Moreover, the Commission prepared a guide on how to deal with Basel II, which is currently being printed. Commission conferences on the introduction of the new Basel Capital Accord started in the second half of 2004, the last one being scheduled in July 2005.

The Commission proposal for a VAT One-Stop-Shop System already released in October 2004 aims at simplification tax compliance procedures and, accordingly, at “creating a more SME-friendly regulatory and administrative framework”. In the same line, the Commission is carrying out an impact assessment analysis on the introduction of a Commission Communication on Home State Taxation for SMEs.

This progress report is an interim report at mid-term. Phase I key actions having been conceived for the 2004-2005 period, a final progress report will be published in 2006.

Annex: Table reflecting progress made per Sub-action

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| Sub-action | Cancelled | Starting | In progress | Nearly finished | Completed |

1.A | Commission Communication | | | √ | | |

1.B | Mini-companies | | | | √ | |

1.C | Joint group EAC | | | | | √ |

1.D | Charter process | | | | √ | |

1.E | EAC programmes | | | | | √ |

2.A | Charter process | | | | √ | |

2.B | Information kit | | | √ | | |

2.C | Conference | | √ | | | |

2.D | Self-evaluation tools | | | √ | | |

3.A | Commission Communication | | | √ | | |

3.B | Transfer markets | | | √ | | |

3.C | Study: transfers failure | √ | | | | |

3.D | Funding | | | | | √ |

4.A | Seminar women | | | | | √ |

4.B | Study: social security | | √ | | | |

4.C | Second career | | | | | √ |

5.A | Study/Conf. ethnic minority entrepreneurs | | | √ | | |

5.B | Expert meetings ethnic minority entrepreneurs. | | √ | | | |

5.C | Women: access to finance | | | √ | | |

5.D | Women: networking | | | | | √ |

6.A.A | Matchmaking events | | | √ | | |

6.B.A | Study: analysis clusters | | √ | | | |

6.B.B | Study: successful clusters | √ | | | | |

6.B.C | Cooperation IRC | | | √ | | |

6.B.D | Regional authorities | | | √ | | |

6.B.E | Networking sectoral clusters | | | √ | | |

7.A | Early stage finance | | | √ | | |

7.B | Reshaping Comm. Funds | | | | | √ |

7.C | ABS Study. Basel guide. Basel seminars | | | | √ | |

7.D | Retained earnings | | | √ | | |

7.E | State aid rules review - risk capital | | | √ | | |

8.A | Consultation of stakeholders | | | √ | | |

8.B | Inter-service SME network | | | √ | | |

8.C | SME test panel | | √ | | | |

8.D | IPM feedback exploitation | | | √ | | |

9.A | Commission Communication on Home State Taxation | | | √ | | |

9.B | VAT One-Stop-Shop (proposal) | | | | | √ |

9.C | Simplified tax compliance | | | √ | | |

[1] http://europa.eu.int/comm/enterprise/entrepreneurship/action_plan.htm

[2] Green Paper “Entrepreneurship in Europe”, document based on COM(2003) 27 final. On-line version: http://europa.eu.int/comm/enterprise/entrepreneurship/green_paper/green_paper_final_en.pdf

[3] See footnote number 2

[4] Progress Report on the implementation of the “Education and Training 2010” Work Programme, Group B “Key Competences”: http://europa.eu.int/comm/education/policies/2010/doc/basic2004.pdf

[5] http://europa.eu.int/comm/enterprise/enterprise_policy/charter/charter2005_base.htm

[6] See the fifth report on Implementation of the European Charter for Small Enterprises in the Member States - SEC(2005)167, pages 7 to 20

[7] http://europa.eu.int/comm/enterprise/events/charter/conf_2005.htm

[8] http://europa.eu.int/comm/dgs/education_culture/newprog/index_en.html

[9] See the fifth report on Implementation of the European Charter for Small Enterprises in the Member States - SEC(2005)167, page 22 onwards

[10] http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/failure_bankruptcy/pdf_final_report/failure_final_en.pdf

[11] MAP stands for Multi-Annual Programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises, approved by Council Decision (2000/819/EC) of 20 December 2000. Further information under:

- http://europa.eu.int/comm/enterprise/enterprise_policy/mult_entr_programme/programme_2001_2005.htm

[12] Commission Recommendation of 7 December 1994: “Transfer of small and medium-sized enterprises”, OJ L 385 of 31.12.1994, p. 14, and OJ C 400 of 31.12.1994, p. 1.

[13] See also link in footnote number 9.

[14] http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/05/389&format=HTML&aged=0&language=EN&guiLanguage=en

[15] http://europa.eu.int/comm/enterprise/entrepreneurship/craft/craft-women/documents/conclusions-en.pdf

[16] EU Member States, Candidate Countries (except Croatia) and EFTA/EEA countries.

[17] The Multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005) was adopted by Council Decision 2000/819/EC, OJ L 333/84 of 29.12.2000

[18] http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/second_career/

[19] http://europa.eu.int/comm/enterprise/entrepreneurship/craft/craft-women/womenentr_portal.htm

[20] http://europa.eu.int/comm/enterprise/networks/eic/eic.html

[21] http://eic.cec.eu.int/BCD/

[22] http://eic.cec.eu.int/PES

[23] See also point 3.3 and footnote number 9

[24] http://europa.eu.int/comm/enterprise/entrepreneurship/financing/docs/report_en.pdf

[25] http://europa.eu.int/comm/competition/state_aid/others/vademecum/innovation_vademecum.pdf

[26] http://europa.eu.int/comm/competition/state_aid/legislation/

[27] http://europa.eu.int/eur-lex/pri/en/oj/dat/2001/c_235/c_23520010821en00030011.pdf

[28] http://ipmmarkt.homestead.com/index.html

[29] http://www.europa.eu.int/comm/enterprise/entrepreneurship/consultation/index.htm#results

[30] http://europa.eu.int/yourvoice/

[31] See footnote number 4

[32] http://europa.eu.int/comm/enterprise/newapproach/

[33] Proposal: COM (2004) 728 of 29 October 2004

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