8. 3. 78 Official  Journal  of the European  Communities No C 59/1 
II 
(Preparatory  Acts) 
ECONOMIC  AND  SOCIAL  COMMITTEE 
Opinion  on small  and  medium-sized  enterprises  in the Community  context 
The opinion  of the Committee  does  not relate  to any  particular  text. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 140th  plenary  session  held  on 1 July  1976  the Committee,  acting  on a proposal  from  its 
Bureau,  decided  to deliver  an opinion  on the abovementioned  subject  on its own  initiative. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its opinion  at its 153rd  plenary  session  held  in 
Brussels  on 23 and  24 November  1977. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the decision  taken  by the full  Com-
mittee  on 1 July  1976,  at the proposal  of its Bureau, 
instructing  the Section  for Industry,  Commerce,  Crafts 
and Services  to draw  up an own-initiative  opinion  on 
small  and  medium-sized  enterprises  in the Community 
context  (fourth  paragraph  of Article  20 of the  Com-
mittee's  Rules  of Procedure), 
Having  regard  to the Commission's  observations  on the 
study  by the  Economic  and  Social  Committee  of the 
situation  of small  and  medium-sized  undertakings  in the 
European  Community, 
Having  regard  to the opinion  issued  by the Section  for 
Industry,  Commerce,  Crafts  and  Services  at its meeting 
on 14 and  15 June  1977, 
Having  regard  to the  oral  report  submitted  by the 
rapporteur,  Mr  Kolbenschlag  and  the  co-rapporteur, 
Mr. Bourel, Having  regard  to the discussions  at its 153rd  plenary 
session  held  on 23 and  24 November  1977  (meeting  of 
23 November), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
with  two  votes  against  and  five  abstentions: 
1. GENERAL  COMMENTS 
1.1. At its 121st  plenary  session,  held  on 26 and  27 
June  1974,  the  Economic  and  Social  Committee 
adopted  a study  entitled  'the  situation  of small  and 
medium-sized  undertakings  in the  European  Com-
munity'.  The  Commission  subsequently  commented  on 
the study  in a document  entitled  'observations  on the 
study  by the  Economic  and  Social  Committee  of the 
situation  of small  and  medium-sized  undertakings  in the 
European  Community'. 
On 1 July  1976  at another  plenary  session  of the 
Economic  and  Social  Committee,  a speech  by the 
Commission's  President,  Mr Ortoli,  was  followed  by a 
No C 59/2 Official  Journal  of the European  Communities 8. 3. 78 
debate  on the  position  of small  and  medium-sized 
enterprises  (SMEs).  The  European  Parliament  discussed 
the matter  on 11 May  1976,  making  express  reference 
to the Committee's  study.  It passed  a resolution  urging 
the Commission  to provide  more  particulars  of what  it 
had done  to help  smaller  firms. 
1.2. The  Commission  states  in its abovementioned 
'observations',  that  the Committee's  study  will  be used 
as a work  of reference  in coming  years  and  that  its 
impact  should  therefore  be assessed.  It points  out  that 
the first  main  part  (Chapter  2) of the study  deals  with 
the characteristics,  role  and  importance  of SMEs,  with 
their  internal  and  external  structures,  with  the impact  of 
national  policies,  and  with  the measures  and  machinery 
introduced  to help  them.  The  Commission  makes  no 
specific  comments  on this  Chapter  2. However,  the 
second  main  part  (Chapter  3) of the study  (conclusions 
and objectives)  is discussed  point  by point  in the Com-
mission's  observations,  and  specific  recommendations 
are made. 
1.3. Basically,  the Committee  endorses  what  is said  in 
the ESC  study.  The  recommendations  made  in the pre-
sent opinion  supplement  those  made  in Chapter  3 of the 
study. 
1.4. Once  again,  for  the  reasons  already  given  in the 
study  (see  paragraph  1.2.4),  the  Committee  has  ex-
cluded  agriculture  and  the professions  from  its survey. 
1.5. In its observations  on the recommendations  made 
in Chapter  3 of the  study,  the  Commission  acknow-
ledged  the  importance  of SMEs.  it is at pains  to take 
their  requirements  into  account;  by way  of example  it 
mentions  the setting  up of a special  SME  Division,  its 
support  for the European  Investment  Bank's  scheme  of 
global  loans  and  the  creation  of the  Business  Coop-
eration  Centre. 
1.6. The  Commission  welcomes  many  of the  recom-
mendations  made  in the  Committee's  study.  The 
Commission  points  out,  however,  that  its financial  and 
other  resources  are limited  so that  it cannot  take  up all 
the recommendations  right  away. endorse  the suggestions  put  forward  in the ESC  study. 
Knowledge  acquired  since  publication  of the study  will 
also be assessed,  and  the recommendations  made  in the 
original  study  will  be updated  in the light  of the  new 
findings. 
1.7.1.  In its  concluding  sentence,  the  Commission 
advocates  that  an 'order  of priority'  be established  with 
respect  to the  problems  of SMEs.  The  Commission, 
thanks  to its direct  contacts  with  the  Member  States, 
had a good  overall  view  of the situation,  ancl  is there-
fore in a position  to establish  these  priorities.  The 
Committee  trusts  that  the  Commission  will  draw  up 
such  an order  of priorities,  that  it will  do so in liaison 
with  the  relevant  organized  interests,  and  that  the 
Economic  and  Social  Committee  will  have  an opportun-
ity to state  its views.  In view  of the urgency  of the mat-
ter, the  Committee  expects  the Commission  to set up 
machinery  which  will  enable  it to implement  all the 
proposed  measures  at an early  date. 
1.8. The  European  Parliament  has  put  questions  to a 
number  of national  and  international  associations.  The 
questions  asked  include:  Is there  a coherent  policy  on 
SMEs?  Are  SMEs  considered  useful  and  is this  reflected 
in policy  towards  them?  Is there  a minister  or state  sec-
retary  for SMEs?  What  is the outlook  for  SMEs?  Are 
adequate  statistics  available?  Are  there  adequate  credit 
facilities?  What  are the views  on the tax system? 
1.8.1.  The  European  Parliament  also  asked  about  the 
effectiveness  of the  European  Centre  for the Develop-
ment  of Vocational  Training,  whether  account  is taken 
of the situation  of SMEs  in the approximation  of com-
pany  law,  and  what  steps  have  been  taken  to prevent 
distortion  of competition. 
1.8.2.  It seems  urgently  necessary  to have  the subjects 
in question  (which  were  also  dealt  with  in the  Com-
mittee's  study)  examined  in more  detail  by experts  in 
direct  discussions  with  the  organizations  of the  indi-
vidual  Member  States.  It also  seems  necessary  to obtain 
more  detailed  information,  and  compare  the situations 
in the individual  Member  States. 
1.8.3.  The  Commission  should  include  in its list  of 
priorities  the drawing-up  of a programme  of investiga-
tions  to be referred  subsequently  to experts  in the indi-
vidual  countries. 
1.7. In order  to show  what  ways  and  means  of promot-
ing SMEs  are considered  particularly  important,  Section 
2 of this  opinion  will  examine  the observations  made  by 
the Commission,  particularly  where  the latter  does  not 1.9. Section  3 roughs  out  basic  guidelines  for a pro-
gramme  for  systematic,  purposeful  promotion  of the 
Community's  SME  sector.  The  Commission  is urged  to 
8. 3. 78 Official  Journal  of the European  Communities No C 59/3 
endorse  these  guidelines,  and to recommend  their  adop-
tion by the member  governments. 
2. APPRAISAL  OF THE  COMMISSION'S  OBSERVATIONS 
2.0.1.  The  Commission  measures  mentioned  in the 
observations  will  not check  the increasing  trend  of re-
cent years  towards  concentration.  Nor  will  they  check 
the associated  structural  changes.  A large  economic  unit 
like the European  Community  needs  a specifically-de-
signed,  concrete  and  coherent  blueprint  for SMEs.  No 
such blueprint  exists.  Indeed,  little  is being  done  in this 
field. 
2.0.2.  It is fair  to say  that  SMEs  are not  genuinely 
helped  by common  policies  which  fail to take  account 
of their  special  circumstances  and  importance,  or to 
afford  them  equal  opportunities. 
2.0.3.  The  special  division  to which  the Commission 
refers  was  stated  in the Committee's  study  to be com-
pletely  inadequate.  The  small  size  of the division  is out 
of. all proportion  to the extent,  complexity  and  import-
ance of the SME  sector. 
2.0.4.  The  Commission  should  at least  set up an ad-
equately  manned  directorate.  This  would  be able  to 
examine  the situation  of SMEs  effectively.  But it should 
primarily  be a coordinating  unit  which  would  collect 
information  on SMEs  and  see that  it is brought  to the 
attention  of those  responsible  for policy  making.  In 
addition,  the Commission  should  give  all its directorates 
a general  responsibility  for the SME  sector  and  take 
steps  to increase  awareness  of the problems  of the SME 
sector. earmarked  for this  purpose,  and  to improving  the con-
ditions  governing  the granting  of loans.  Global  loans 
should  account  for a greater  proportion  of the money 
lent by the EIB.  Interest  rates  and  repayment  periods 
should^  at the least,  be aligned  on the most  favourable 
terms  in the relevant  Member  State.  Steps  must  be taken 
in the  individual  Member  States  to cover  exchange 
risks.  To  make  the  loans  attractive  the  minimum 
amount  should  be substantially  less  than  100  000  units 
of account  — especially  as their  share  of the aggregate 
financing  requirements  of projects  does  not exceed  20 
to 40%.  In view  of the frequent  criticism  of the time 
taken  before  loans  are granted,  the paperwork  should 
be done  by Member  State  institutions  (in order  to re-
duce  processing  time),  and  the EIB  should  merely  be 
responsible  for overall  supervision.  The  amounts  lent  to 
SMEs,  and  their  purposes,  should  be specified  in more 
detail  in the annual  reports.  The  criteria  used  when 
examining  creditworthiness  should  also  be made  public. 
2.0.7.  Not  enough  experience  has been  gained  to date 
to enable  a final  judgement  to be passed  on the Business 
Cooperation  Centre.  Nevertheless,  in the ESC  study  it 
was suggested  that  the BCC's  terms  of reference  should 
be amplified  to take  in the promotion  of subcontracting. 
The BCC  should  encourage  subcontracting  by facilitat-
ing the exchange  of experience,  information  and  docu-
ments,  by providing  technical  and  financial  assistance 
for sales  promotion  at trade  fairs,  exhibitions  and  other 
events  and  by affording  appropriate  support  for the 
activities  of national  and  regional  business  promotion 
offices  set up by chambers  of commerce  and  trade  and 
professional  associations.  The  Commission  should  also 
support  the development  of a uniform  system  for the 
gathering  of information  on subcontracts  and  subcon-
tracting  opportunities  by data  collection  units  of the 
chambers  of commerce  and  trade  and  professional  as-
sociations.  If the BCC  were  called  upon  to carry  out any 
additional  tasks  it would  first  have  to be provided  with 
the necessary  manpower  and  material  resources. 
2.0.5.  It must  be made  easier  for SMEs  to tap a wide 
range  of finance  sources.  To this  end,  comprehensive 
information  must  be provided  on all finance  institutes 
which  are suitable  for SMEs.  Most  Member  States  have 
special  machinery  for SMEs.  The  Member  States  which 
do not have  such  machinery  should  be urged  to set it 
up. 
2.0.6.  The  global  loans  of the EIB  (European  Invest-
ment  Bank)  have  proved  their  value  as a source  of 
finance  for SME  projects,  and especially  for job-creation. 
Consideration  should  be given  to increasing  the funds 2.1. Demarcation,  definitions 
2.1.0.  The  Commission's  document  on definitions  of 
craft  and other  SMEs  seems  to constitute  a sound  base 
for further  research.  The  contents  of the  document 
should  be widely  publicized.  The  ESC's  study  pointed 
out that  the highly  disparate  character  of the definitions 
used in the Member  States  made  it difficult  to tackle 
problems  in a uniform  manner.  The  study  added  that 
individual  measures  (e.g.  relating  to credit  policy  and 
award  of contracts)  needed  to be adapted.  As regards 
No C 59/4 Official  Journal  of the European  Communities 8. 3. 78 
the definition  of 'small  and medium-sized  enterprise'  the 
Committee  considers  that  for the time  being  firms,  with 
more  than  500  employees  should  not be classed  in this 
category. 
2.1.1.  It should  be permissible  for special  definitions  to 
be laid  down  for  craft  trades  in individual  Member 
States  and  for certificates  attesting  to vocational  train-
ing (or the right  to exercise  given  occupations  in indi-
vidual  Member  States)  to be regulated  by law. 2.2.1.  Competition  policy 
2.2.1.0.  The  circumstances  of SMEs  should  be taken 
into consideration  by the Commission  when  it proposes 
general  measures  in the  economic,  tax  and  social 
spheres.  Next  to this,  one  of the most  important  re-
quirements  is a competition  policy  that  is geared  to firm 
size. Such  a policy  should  cater  more  strongly  for the 
needs  of smaller  businesses  and,  in particular,  should 
counter  distortions  of competition  caused  by cut-throat 
practices  or by abuse  of dominant  positions  on the 
buying  side  of the market. 
2.1.2.  Statistics 
2.1.2.0.  Statistics  relating  to developments  in the SME 
sector  are  at present  completely  inadequate,  and  the 
situation  will  not be significantly  improved  by the in-
tended  provision  of statistics  on the industrial  activity 
and fixed  assets  of firms  employing  20 or more  persons. 
These  statistics,  which  are mentioned  by the Commis-
sion,  will  cover  only  a small  proportion  of SMEs  and 
will not  give  a true  picture  of the  SME  sector  as a 
whole.  It is also  planned  that  firms  with  less  than  20 
employees  should  be surveyed  at maximum  intervals  of 
five years.  Surveys  at such  intervals  are inadequate. 
2.1.2.1.  The  improved  statistical  situation  resulting 
from  the  conduct  of various  surveys  by the  SOEC 
(Statistical  Office  of the European  Communities)  should 
induce  the Commission  to evaluate  these  statistics  regu-
larly  with  a view  to assessing  developments  in the SME 
sector  as compared  with  the large-firm  sector.  It should 
also open  the way  to more  extensive  publication  of find-
ings. 
2.2. Economic  policy 2.2.1.1.  The  Commission  appreciates  the need  for a 
competitive  situation  favourable  to SMEs,  and  in this 
connection  the Commission  considers  that  State  aids,  as 
currently  granted  in some  Member  States,  are compat-
ible with  general  competition  policy.  Under  this  head  fall 
State  aids  in the  form  of interest  subsidies,  credit 
guarantees,  capital  participations,  aids  to promote  re-
search  and  development  and  to help  cover  the cost  of 
installing  data-processing  equipment,  and  technical  as-
sistance. 
2.2.1.2.  The  promotion  of cooperation  between  firms 
can also  improve  the economic  position  of SMEs.  The 
supply  of information  and  establishment  of contacts 
should  be improved  (through  greater  involvement  of 
professional  and  trade  associations  and  intensification 
of the activities  of the Commission's  Business  Cooper-
ation  Centre),  but above  all steps  will  have  to be taken  in 
the fields  of company  and  restrictive-practices  law  to 
promote  such  cooperation  (see  paragraphs  2.2.2  and 
3.3.9). 
2.2.1.3.  Orientation  of SMEs  towards  foreign  markets, 
i.e. promotion  of exports,  is becoming  more  and  more 
important.  It is just  as necessary  to support  export  ad-
visory  services  for exporter  groupings,  catalogues  and 
samples  exhibitions  as it is to promote  participation  in 
trade  fairs  and give  assistance  for market  surveys. 
2.2.0.  The  study  does  not advocate  a policy  of protect-
ing SMEs.  The  Committee  agrees  with  the  Commis-
sion's  views  on economic  policy.  The  Member  States 
regularly  adopt  structural  measures  applying  to indi-
vidual  industries  or specific  regions.  In the majority  of 
cases,  however,  there  are no measures  specifically  relat-
ing to firms  of a particular  size,  e.g. to SMEs.  Yet such 
measures  are  of considerable  importance  to SMEs. 
SMEs  can be a major  force  for growth  and  job creation 
in a service-based  economy  which  is seeking  to conserve 
raw materials  and  energy.  Community  economic  policy 
should  take  this  into  account. 2.2.1.4.  More  technical  assistance  and  financial  help 
should  be provided  for meetings  held  for the purpose  of 
comparing  the measures  that  the individual  States  oper-
ate to assist  SMEs  (international  interfirm  compari-
sons). 
2.2.1.5.  The  annual  reports  on the development  of the 
common  competition  policy  should  be evaluated  with 
reference  to the circumstances  of SMEs  and  should  be 
more  extensively  publicized  in these  circles. 
8. 3. 78 Official  Journal  of the European  Communities No C 59/5 
2.2.1.6.  More  and  more  voices  are being  raised  in criti-
cism of the  Community's  competition  policy.  At the 
present  time  this  policy  could  be said  to be completely 
non-existent  in a large  number  of areas.  The  social  goals 
(first  and  foremost,  full  employment)  and  the task  of 
reorienting  the economy  (battle  against  inflation,  bal-
ance  between  regions  and  economic  sectors)  call  for a 
competition  policy  that  counters  unrestrained  industrial 
concentration  and  dominant  market  positions. social  insurance  contributions  and other  public  financial 
charges  has  cut SMEs'  profits  and  thus  reduced  their 
ability  to invest.  The  repercussions  on the  level  of 
economic  activity,  the  labour  market  and  economic 
growth  have  been  considerable  and have  highlighted  the 
limits  to the tax burden  which  can be carried  by SMEs. 
2.2.2.  Policy  for establishing  suitable  legal  structures 
2.2.2.0.  The  attempts  to develop  suitable  legal  ve-
hicles  for SMEs  should  be continued.  It is regrettable 
that no progress  has been  achieved  so far. 2.2.5.1.  To achieve  the longer-term  objective  of a re-
turn to appropriate  growth  and  a reduction  in unem-
ployment,  it will  be necessary  to encourage  firms'  pro-
pensity  and ability  to invest.  Alongside  the possible  forms 
of tax relief  outlined  in the Committee's  study,  one par-
ticularly  suitable  way  of taking  some  of the strain  off 
firms  would  be tax deferment  for investment  reserves. 
2.2.3.  Regional  policy 
2.2.3.0.  Now  that  funds  have  been  made  available, 
regional  policy  has got under  way.  It is regretted  that  no 
change  has yet been  made  in the jobs  condition  for as-
sistance  (at least  10 jobs  have  to be created),  so as to 
make  it easier  for SMEs  to benefit  from  the Regional 
Fund.  It is, however,  expected  that  the Commission  will 
at least  allow  a number  of smaller  firms,  to be grouped 
together  so that  they  meet  the jobs  condition  for Re-
gional  Fund  assistance. 
2.2.4.  Technological  research  and development  policy 
2.2.4.0.  The  Committee  regrets  that  the Commission 
has withdrawn  the proposal  on cooperative  industrial-
development  contracts,  because  the Council  has  failed 
to take  a decision.  Special  encouragement  should  be 
given  to cooperative  research  and  all possibilities  of 
technological  transfer  to SMEs.  It has always  been  true 
to say that  a large  number  of SMEs  are highly  efficient 
in the technological  research  field.  As the Commission 
states,  it is necessary  in particular  to improve  infor-
mation  on matters  of interest  to SMEs  and  to open  up 
paths  to cooperation  agreements.  To this  end use could 
be made  of bodies  such  as chambers  of commerce,  trade 
and professional  associations,  etc.,  where  they  already 
exist. 
2.2.5.  Promotion  of SMEs  in the EEC  through  tax 
measures 
2.2.5.0.  The  economic  position  of smaller  firms  in the 
European  Community  has deteriorated  in recent  years. 
The growing  burden  of company  taxation,  employers' 2.2.5.2.  Among  the measures  to be considered  the in-
troduction  of investment  reserves,  in particular,  would 
enable  smaller  firms  to save  money  for future  invest-
ment  (increase  in risk  capital)  and  thus  at the same  time 
enlarge  their  scope  for borrowing.  It should  be possible 
to use these  reserves  to finance  up to 50%  of the in-
vestment  costs  of specific  projects.  So as to have  the 
desired  effect  in helping  smaller  businesses,  the reserve 
should  be limited  to a certain  percentage  of annual  pro-
fits (say  25%)  and  a maximum  annual  sum;  the sums 
involved  would  become  liable  to taxation  after  a certain 
period  of time  (maximum  of five  years)  if they  were  not 
invested.  This  taxation  measure  is likely  to help  SMEs 
not only  by reducing  their  competitive  disadvantages 
with regard  to the financing  of business  investments  but 
also by improving  the climate  for economically  sound 
investment  behaviour  and,  in the longer  run,  stabilizing 
investment  by smaller  firms  and  levelling  out the ups 
and downs  in the trade  cycle.  The  arrangements  for 
financing  social  security  from  public  funds  and specific 
contributions  differ  considerably  from  Member  State  to 
Member  State.  The  Commission  should  consider  this 
question  carefully,  giving  due weight  to the job-creation 
aspects. 
2.2.6.  Training  policy 
2.2.6.0.  The  Committee  welcomes  the  fact  that  the 
Commission  is urging  that  the European  Centre  for the 
Development  of Vocational  Training  set up a division  to 
No C 59/6 Official  Journal  of the European  Communities 8. 3. 78 
deal with  the specific  problems  of SMEs.  It also  advo-
cates  a greater  measure  of collaboration  within  the 
European  Committee  for Consultant  Services  and  the 
European  Association  of National  Productivity  Centres. 2.2.8.2.  In view  of the importance  of advisory  services 
for SMEs  in particular,  attention  is again  drawn  to the 
need  to promote  such  services,  and to the need  for stan-
dardized  programmes. 
2.2.6.1.  The  Committee's  study  highlighted  the import-
ance of providing  further  training  for businessmen.  The, 
Community  should  promote  business  courses  and,  in 
particular,  the publication  of model  programmes  and 
the exchange  of experience. 2.2.8.3.  The  Committee  wholeheartedly  welcomes  the 
Commission's  support  for the idea  of encouraging  par-
ticipation  in European  and  national  trade  fairs  and 
exhibitions.  The  Commission's  attention  is drawn  to the 
differences  between  the levels  of State  financial  assist-
ance  for trade  fairs  and exhibitions. 
2.2.7.  Social  policy 
2.2.7.0.  One  of the fundamental  social  demands  of the 
self-employed  is that  they  should  have  social  security 
coverage  (sickness  insurance,  pension  insurance,  acci-
dent insurance  and  unemployment  insurance).  In the 
long run SMEs  will only  be able  to fulfil  their  important 
economic  role  of catering  for the needs  of local  and 
regional  communities  if their  owners  are insured  in the 
same  way  as employees  against  the main  economic  and 
social  risks  (e.g.  through  sickness,  accident  and  pension 
insurance,  and  other  social  welfare  schemes  such  as 
supplementary  benefits  and  family  allowances).  The 
idea of introducing  a guaranteed  minimum  income,  as 
mentioned  by the Commission  in its comments,  is very 
interesting  in this  connection,  but  it is of secondary 
importance  compared  with  coverage  against  the risks 
referred  to. 
2.2.7.1.  The  Commission  has  pointed  out  that  the 
European  Social  Fund  has  been  used  very  little  by the 
self-employed  and by professional  people.  This  indicates 
that these  circles  are not  being  adequately  informed 
about  the Fund.  The  Commission  must  therefore  find 
ways  of improving  the flow  of information.  Above  all, it 
would  seem  to be necessary  to enlarge  the scope  of the 
Social  Fund  provisions  so that  the  self-employed  be-
come  eligible  for assistance. 
2.2.8.  Special  assistance  measures 
2.2.8.1.  The  Committee's  study  stated  that  the Com-
mission  should  make  a detailed  analysis  of conditions  in 
the various  SME  sub-sectors,  including  crafts,  commerce 
, and  services.  The  fact  that  limited  funds  are available 
under  the budget  cannot  be accepted  as a convincing 
explanation  for the complete  lack  of activity  here.  It is 
therefore  expected  that  the  Commission  will  shortly 
draw  up a programme  of such  analyses  of individual 
sub-sectors,  with  a timetable  for their  execution. 2.2.8.4.  The  group  of government  experts  has  taken 
the line  that  a register  of the institutes  which  carry  out 
research  concerning  SME's  is not  an urgent  require-
ment.  Nevertheless,  it is absolutely  essential  that  the 
Commission  should  have  a clear  picture  of what  insti-
tutes  exist  and  what  research  programmes  they  are 
working  on, so that  it may  call upon  them  where  neces-
sary. 
2.2.8.5.  The  better  statistics  which  the Statistical  Office 
of the European  Communities  is expected  to provide, 
could  be evaluated  in annual  reports  on the SME  sector 
(see paragraph  2.1.2).  The  Committee's  study  could 
perfectly  well  provide  the basis  for the first  of these 
reports.  Once  the first  report  has  been  drawn  up, the 
task of drawing  up subsequent  reports  will  be much 
easier. 
2.2.8.6.  Attention  is drawn  to the desirability  of invit-
ing observers  from  SME  associations  to attend  each 
year meetings  of  government  experts  on  small 
businesses  from  national  ministries  for economic  affairs. 
2.2.8.7.  The  high  level  of unemployment  in the Com-
munity  represents  a serious  problem,  particularly  for 
SMEs.  Such  firms  are  harder  hit by the  recession. 
However,  they  are endeavouring  to create  jobs  and,  in 
doing  so, are helped  greatly  by the subsidies  granted  in 
some  countries. 
3. BASIC  GUIDELINES  FOR  A PROGRAMME  FOR 
PROMOTING  THE  COMMUNITY'S  SME  SECTOR 
3.1. A Community  programme 
3.1.0.  In recommending  such  a programme,  it is not 
our object  to lay  down  possible  ways  of providing 
support  in order  to solve  specific  problems  of industrial, 
trade,  craft  and  service  SMEs.  It remains  the task  of 
8. 3. 78 Official  Journal  of the European  Communities No C 59/7 
the national  governments  to take  such  specific,  region-
ally differentiated  assistance  measures  as part  of their 
general  economic  policies. 
3.1.1.  What  we are recommending  is the adoption  by 
the Commission  of a minimum  programme  for  a 
common  policy  on the Community's  SMEs.  The  past 
decade  has  seen  concentration  and  expansion  of the 
large-firm  sector  of the Community  economy,  and  the 
Community's  market-economy  and  social  aims  could 
well be jeopardized  if we fail  to maintain  a balanced 
mix of small,  medium-sized  and  large  firms. 
3.2. Aims  of the programme 
3.2.1.  The  programme  is intended  to provide  the basis 
for a policy  of balance,  which  is to be pursued  in con-
junction  with  a structural  policy  that  takes  firm  size into 
consideration.  In a market  economy  the purpose  of such 
a policy  is to further  equality  of opportunity,  in order  to 
ensure  that  the structure  of the economy  is as well  bal-
anced  as possible,  and  that  there  are an appropriate 
number  of efficient  SMEs.  Only  if general  economic, 
financial  and  social  measures  are  backed  up by an 
appropriate  policy  on SMEs  will  it be possible  to ensure 
that our economy  develops  in a balanced  way  conducive 
to the establishment  of equilibrium  between  the various 
sectors,  between  regions  and  between  small,  medium-
sized  and  large  firms.  Such  a policy  will  also  make  a 
major,  indeed  indispensable,  contribution  to the elimi-
nation  of unemployment  and  the shortage  of training 
places  — a goal  which  can  be furthered  not only  by 
measures  pertaining  to large  firms,  but also  by promot-
ing local,  decentralized  jobs  and  training  places. 
3.2.2.  Another  aim  of the programme  is the establish-
ment  of a sound,  uniform  approach  to the problem  of 
maintaining  and  consolidating  the economic  functions 
of SMEs,  i.e. their  function  as suppliers  of goods  and 
services  to the  general  public,  and  their  function  as 
sub-contractors,  suppliers  and customers  of other  firms. 
3.2.3.  The  proposed  programme  also  aims  at 
strengthening  competition,  which  will  ossify  if there  are 
not enough  SMEs. 
3.2.4.  A further  noteworthy  aim  of the programme  is 
to promote  the role  of smaller  firms  as training  estab-
lishments.  The  overall  economic  significance  of such 
firms  lies  in particular  in their  training  of skilled 
workers  in numbers  in excess  of their  own  needs. 3.3. Basic  guidelines  for the programme 
3.3.0.  The  basic  guidelines  for  the  proposed  pro-
gramme  are implicit  in the abovementioned  aims. 
3.3.1.  Action  (above  all in the form  of tax and  compe-
tition-law  measures)  should  be taken  to improve  the 
economic  environment  in which  industrial,  trade,  craft 
and service  SMEs  operate,  in order  to safeguard  and 
strengthen  their  position,  capability  and competitiveness 
and enable  them  to fulfil  their  role  in the  market 
economy.  Specifically,  steps  must  be taken  to further 
cooperation  between  firms,  to promote  advanced/ 
further  training  facilities  and  to improve  advisory  ser-
vices  in the areas  of management,  production  engineer-
ing and  design. 
3.3.2  Jobs  and  training  places  in SMEs  must  be 
safeguarded,  and  the number  of such  jobs  and  training 
places  increased  in cases  where  structural  adjustment 
has occurred. 
3.3.3.  SMEs  should  be helped  to adjust  to economic 
and technological  change  by furthering  the development 
of advisory  services,  information  and  documentation 
services,  research  and  adaptation  to SME  production 
conditions  of innovations  made  in large-scale  produc-
tion.  When  funds  are allocated  for research  work,  the 
possibilities  afforded  by smaller  firms  should  therefore 
be borne  in mind. 
3.3.4.  The  opportunities  smaller  firms  have  to create 
and increase  their  own  capital  and  to borrow  should  be 
improved. 
3.3.5.  The  establishment,  acquisition,  continued  oper-
ation,  rationalization  and  expansion  of SMEs  must  be 
encouraged  and  facilitated  by: 
(a) financial  assistance  in the form  of guarantees,  and, 
in special  cases,  of low-interest  loans  and  interest 
subsidies,  within  the framework  of existing  Member 
State  subsidy  schemes; 
(b) participation  in trade  fairs  and  exhibitions,  both 
within  and  outside  the Community; 
(c) promoting  market  research  and  steps  to open  up 
markets; 
(d) promoting  the  supply  of information  on foreign 
markets,  participation  in international  calls  for 
tender,  exporter  groupings,  advisory  services  for 
exporters  (e.g.  greater  assistance  from  foreign  mis-
sions); 
No C 59/8 Official  Journal  of the European  Communities 8. 3. 78 
(e) promoting  further  training  for managers. 
3.3.6.  The  paperwork  required  of SMEs  claiming  fi-
nancial  aids  and  help  under  assistance  programmes 
should  be simplified. 
3.3.7.  There  should  be tax concessions  for profits  re-
tained  by partnerships  and  companies  for investment 
purposes. 
3.3.8.  Procedures  which  facilitate  the participation  of 
SMEs  in public  contracts  should  be adopted  as far as 
possible,  e.g.  large  contracts  should  be divided  up into 
small  units  (on a quantity  and  trade  basis). 
3.3.9.  The  restrictive  practices  rules  should  be relaxed 
by raising  the limits  on turnover  and  share  of the mar-
ket in the  Notice  concerning  agreements  of minor 
economic  importance,  by extending  the  scope  of the 
notice  dealing  with  cooperation  and  by enacting  further 
regulations  exempting  groupings,  e.g.  purchasing, 
marketing  and  research  and  development  groupings. 3.4.3.  Trade  fair  and  exhibition  associations  could  be 
Community  mutual-help  bodies  which  meet  a propor-
tion of fair  and exhibition  costs,  to a certain  extent  take 
steps  on their  own  initiative,  and  guarantee  that  the 
prerequisites  for success  are met. 
3.4.4.  Governments  should  give  greater  priority  to 
SME  policy. 
3.5. Measures  involving  the Commission 
3.5.0.  The  'small  and  medium-sized  enterprises,  ar-
tisanat'  division  of the  Commission  should  be re-
vamped,  and  its field  of action  should  be extended,  so 
that it can implement  the proposed  programme. 
3.5.1.  In particular,  the division  in question  should  be 
involved  in all Commission  measures  which  are relevant 
to short-term  economic  policy  or to competition  policy, 
and which  have  a bearing  on the aims  of the proposed 
programme. 
3.4. Subsidiary  (supplementary)  guidelines 
3.4.1.  The  aims  and  guidelines  of the  proposed  pro-
gramme  should  be taken  into  account  in anti-cyclical, 
trade  and  financial  measures,  in structural  policy,  in 
economic  planning  and  in the activities  of the European 
Investment  Bank  and  the Regional  Fund. 3.6. Structural  report 
3.6.0.  Every  year  the Commission  produces  a report  on 
structural  economic  trends  in the  Community,  with 
special  reference  to the situation  of SME's,  their  labour 
force  and their  turnover. 
3.4.2.  As a rule,  assistance  should  be given  only  to 
projects  likely  to be successful,  and  if the relevant  na-
tional  governments  and  the  firms  involved  make  an 
adequate  contribution. 3.6.1.  These  reports  should  also  provide  information 
on the measures  taken  to help  SMEs,  and  on the special 
problems  encountered  by the  SME  sector  during  the 
period  reviewed. 
Done  at Brussels,  23 November  1977. 
The Chairman 
of the Economic 
and Social  Committee 
Basil  de FERRANTI 
to the opinionof  the economic  and  social  committee 
^hefollowing  passage  from  paragraph  of  the^ection^sopinion  was  deleted  asa  resultof  the 
adoption  of an amendment  during  the discussions^ 
'Owing  to the great  differences  between  the firms  involved,criteria  should  therefore  be laid 
down  for specific  measures  and  pro^ects^fforts  to draw  up criteriaof  general  application  should 
not he abandoned,  hut standardisation  of definitions  should  he postponed  until  further  recommend 
dationsareavailableB 
^or^^,against  ^,abstentions^^^ 
^he following  phrase  from  paragraph  of  the ^ection^s  opinion  was  deleted  asa  result  of the 
adoption  of an amendment  during  the discussions^ 
'b^ta^  incentives,  etcB 
^nanimous^ 
^he following  amendment  was  rejected  during  the discussions^ 
paragraph 
delete  the second  and third  sentences  of paragraph  ^"lt  should  be possihle^Difthe^  were 
not invested^^^he  following  sentence  should  begin  with  the words  "^a^ation  measures  are^^rest 
unchanged^ 
^or^ against  ^abstentions^  ^