No C 206/24 Official Journal of the European Communities 6. 8. 84 
(a) evidence is produced that it is business-related 
and (b) expenditure in individual cases is within 
generally accepted norms. 
For simplicity, guide values or ceilings could be set 
in line with the scale and importance of the under-
Done at Brussels, 23 May 1984. 
1. General comments 
1.1. At present nearly 13 million persons through­
out the European Community, that is 11,5 % of the 
working population, are unemployed. The young, 
the elderly and women are particularly affected and 
on an increasingly long-term basis with little imme­
diate hope of re-entering the labour market. The 
Commission consultations have indicated a new taking. In addition eligibility should be vetted 
according to strict criteria. 
Deductibility in respect of gifts made in connection 
with business activity should be limited to articles 
costing 20 ECU or less. 
The Chairman 
of the Economic and Social Committee 
Francois CEYRAC 
spontaneous local growth of employment initiatives 
including many by unemployed persons themselves 
which require tangible support. The Committee 
therefore welcomes the communication and agrees 
that employment creation policies ought to take 
more account of the potential of local employment 
initiatives (LEIs). It also recognizes that, whereas 
some LEIs resemble or may eventually mature into 
normal small and medium-sized enterprises, the vast Opinion on the Commission's communication to the Council 'Community action to 
combat unemployment — the contribution of local employment initiatives' 
- (84/C 206/09) 
The text referred to the Committee has been published in Official Journal of the Euro­
pean Communities No C 70 of 12 March 1984, page 1. 
A. LEGAL BASIS FOR THE OPINION 
On 1 December 1983 the Council, acting in accordance with Article 198 of the Treaty 
setting up the European Economic Community, asked the Economic and Social Com­
mittee for an opinion on the abovementioned communication. 
Procedure: 
The Section for Social Questions was instructed to prepare the Committee's work on 
the matter. The Section adopted its opinion on 10 May 1984 after hearing a report by 
Mr Brian E. Roycroft. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
At its 217th plenary session, meeting of 23 May 1984, the Economic and Social Com­
mittee adopted the following opinion unanimously. 
6.8.84 Official Journal of the European Communities No C 206/25 
variety of LEIs — especially socially motivated pro­
jects sponsored by diverse prime-mover groups — 
justifies separate analysis. The Committee is con­
scious of the need to be realistic and constructive in 
its opinion, in view of the sustained high levels of 
unemployment throughout the Community, and 
recognizes the increasing activity at the grassroots in 
LEIs arising from entrepreneurial or from social 
community-based motivations. 
The Committee nonetheless registers its deep con­
cern that the growth in LEIs has also been moti­
vated by the fear of remaining or becoming unem­
ployed due to the absence or insufficiency of offi­
cial policies aimed at employment growth. There­
fore, while supporting genuine entrepreneurial or 
socially motivated projects and the need to create a 
change of attitude and a community climate of hope 
and self-help, the Committee would not want to 
encourage withdrawal by public and governmental 
authorities of primary employment growth creation 
responsibilities. 
In this connection, the Committee considers that 
LEIs should not be judged solely in terms of creat­
ing sustained employment, but also in terms of alle­
viating the psychological stress and frustration 
among the long-term and young unemployed, and 
of integrating and involving these persons in the 
local community where their skills and energies can 
be put to beneficial use. 
1.2. The consultations carried out in Member 
States have revealed a wide range of enterprises: 
— very small firms with a traditional profit orienta­
tion, 
— cooperatives which, whilst seeking a trading sur­
plus, have their own distinctive organization 
and philosophy, 
— a variety of community-based enterprises which 
are more motivated by social objectives, new 
models of working and which, in some cases, 
are helping to integrate particularly disadvan­
taged groups into the labour market. 
Whilst locality is the common characteristic, LEIs 
nonetheless do not represent a homogeneous group 
and the Committee feels that there are real difficul­
ties in attempting to deal with them thoroughly in 
one communication, given their different develop­
mental needs. As a result the communication is not 
clear in its definition of LEIs, their role in the labour market and their possible contribution in 
relation to training and net job creation. The action 
proposals are therefore superficial in some respects. 
1.3. The communication should be clear about the 
main objective in the promotion of LEIs. If it is to 
create new employment then it seems likely that net 
job gains will be modest, at best, when compared 
with the large scale unemployment across the Com­
munity. For this reason, the Committee emphasizes 
the point made in the communication, that the 
promotion of LEIs cannot be seen as a substitute for 
policies aimed at employment growth in the Com­
munity. 
If the objective is to encourage the creation of more 
small, independent enterprises then this, on balance, 
is to be welcomed, particularly if it helps to remove 
an over-dependence in some locations on one or 
two large firms and help to restore self-confidence, 
retain skills and to avoid diversion into the 'black 
economy'. 
However, there are points to which the Committee 
wishes to draw attention. 
— the need to avoid indiscriminate support for 
"market-oriented" LEIs leading to unfair com­
petition and resulting merely in job substitution 
or job loss in established firms, 
— the need to avoid the emergence of a dual econ­
omy, based on different standards, by ensuring 
that LEIs receive management training and 
guidance on wage rates and working conditions, 
— local authorities should continue to be seen as 
the providers of basic public services, and the 
promotion of LEIs should not be used to rein­
force pressures to 'privatize' or reduce such key 
services. 
1.4. The Committee agrees that concern must be 
with viable enterprises and LEIs which aspire to via­
bility if long-term jobs are to be created, i.e. income 
must be at least equal to expenditure. In this con­
text, the promotion of small, viable enterprises is 
particularly justified in the more deprived regions of 
the Community. This should also apply in situations 
No C 206/26 Official Journal of the European Communities 6. 8. 84 
where viable parts of larger uneconomic concerns 
can be rescued, where local skills can be retained 
and where there is a market for new services and 
products. 
However, viability may be a more distant prospect 
for some LEIs, particularly for those which seek to 
sustain socially useful employment for disadvan­
taged groups — women, the long-term young unem­
ployed, handicapped and ethnic groups — for 
example. In these situations there will be a demand 
for more continuous support and 'hand-holding' 
over a longer period. There is also the scope for 
more permanent and meaningful support in the 
form of co-development between LEIs and local 
authorities. 
1.5. Notwithstanding the reservations expressed, 
the Committee agrees that the European Com­
munity and Member States should offer positive 
support to LEIs. Major employment growth policies 
will take time to have effect and traditional large 
firms are not currently creating substantial new 
employment. Most importantly, there does appear 
to be a significant and spontaneous growth of LEI 
activity throughout the Community which needs a 
more tangible form of support. 
1.6. The Committee particularly stresses the need 
for full consultation and commitment by the social 
partners and by local authorities in the promotion 
and organization of LEIs. 
1.7. The action proposals should seek to create an 
economic climate in which positively motivated 
LEIs can prosper, that is a climate which is condu­
cive to wealth creation, community consciousness 
and well-being, and the avoidance of exploitation or 
fear of unemployment. It is also important to create 
the right political and administrative attitudes which 
will unlock the human resources within the Com­
munity. 
1.8. The Commission's consultations revealed a 
demand for support from LEIs in ways which are 
relevant to their different characteristics and needs. 
However, whilst the proposals for aiding and pro­
moting LEIs are sensible, they are also limited. Much 
of what is proposed appears to be directed to the 'entrepreneurial' style of enterprise. Reference has 
already been made to the wide variety of LEIs and 
the difficulties of adequately dealing with them in 
one document. This difficulty manifests itself in the 
action proposals. More attention should be paid to 
the often quite different developmental needs of the 
various types of LEIs. 
1.9. Improving LEI access to existing European 
Community funds on a more direct basis is vital 
because resources are not reaching down to very 
small concerns. The further research proposed by 
the Commission should not prejudice progress on 
this or hold back the proposed review of Com­
munity instruments. New forms of financing and 
procedures are needed which correspond to the 
needs and capacities of LEIs and which make it eas­
ier to assist Member States in encouraging and sup­
porting LEIs. New measures should also take into 
account the different forms that LEIs take and the 
particular need for decentralized decision-making, 
flexible guidelines and speedy processes. The review 
of Community instruments should seek to align pro­
cesses and guidelines more closely and enable 
comprehensive support from the limited sums 
available to be obtained under a variety of funds as 
a single package for job creation schemes. 
The greatest financial need of LEIs, particularly 
community-based enterprises, is for small amounts 
of start-up and working capital. Traditional small 
firms and some cooperatives can find it easier to 
obtain finance, often because they are better under­
stood and appear more credible. Therefore there is a 
clear need for resources to be applied, either directly 
or through intermediary bodies, in the form of small 
loans, credit guarantees, start-up grants and 
development funds, training and research grants. 
Greater encouragement should be given to attracting 
private funds into LEIs and intermediary bodies, 
perhaps through differential tax advantages. Com­
panies should be given an incentive to invest. Such 
new forms of encouragement should not necessarily 
be seen as being distinct or detrimental to, or more 
privileged than, practices and arrangements appli­
cable in the promotion of SMEs. 
6. 8. 84 Official Journal of the European Communities No C 206/27 
'Locality' is the key characteristic of LEIs and there­
fore local authorities have a particularly important 
role. However, their ability to act is often limited by 
restricted powers and resources. This needs to be 
remedied if local authorities are to be increasingly 
active in relation to LEIs. 'Hand-holding' can be an 
expensive and time-consuming role, particularly in 
start-up situations and many LEIs fail because sup­
porting agencies are often not able to persevere with 
assistance. 
1.10. LEIs prosper where good support structures 
exist and this is where intermediary bodies have a 
key role to play. Such bodies should receive State 
support and should be the focus for Community 
intervention. The most sensible basis for supporting 
huge numbers of LEIs would be to operate through 
intermediary agencies and local authorities with 
direct links to the appropriate Community auth­
orities and funds. The reservations which social 
partners may feel about the promotion of LEIs can 
be mitigated by securing their close involvement in 
intermediary bodies. In some areas, however, there 
may well already be too many such bodies, and 
pilot actions should not be set up in a way which 
encourages a 'horse race' for funds. Aid to interme­
diary bodies should be dependent on their willing­
ness to cooperate with other similar bodies and 
avoid overlap. An important role for local govern­
ment is to be clear what support structures are 
needed at the local level, to encourage their creation 
and allocate resources accordingly. 
1.11. Reference has already been made to the need 
to consider new methods of financing LEIs, particu­
larly during the start-up period. As part of this pro­
cess, temporary income support measures rather 
than unemployment benefits, accompanied by 
appropriate safeguards and common legal provi­
sions, might be necessary in order to allow those in 
receipt of State benefits to move into self-sustaining 
employment. 
1.12. In view of the current resources being spent 
on the training and retraining of the unemployed 
and on temporary job-creation schemes, the Com­
mittee feels that particular attention should be given 
to encouraging any potentially viable enterprises 
which emerge, and to remove the obstacles which 
prevent or discourage those involved in training 
courses or temporary work schemes from making a 
smooth transition to employment in LEIs. 1.13. Training for business management is of great 
importance and the Committee welcomes the 
emphasis on training in the communication. Atti­
tudes to future employment are often established 
whilst young people are still at school. In this con­
text, there should be more discussion of the poten­
tial for involvement in a wide range of self-sustain­
ing employment including local community-based 
activities within the school curriculum in order to 
encourage youth participation and to facilitate a 
transition towards such forms of youth employment 
after completion of basic education. 
1.14. Complex legislation and regulations are a 
particular problem for LEIs and should be stream­
lined to a sensible minimum. 
1.15. When public authorities are approached by 
those who wish to establish LEIs, local bureaucrats 
must be sensitive, have time to listen and be pre­
pared to understand as well as offer unbiased 
advice, particularly as regards the use of EC funds, 
irrespective of political views. 
1.16. Public authorities are major consumers of 
manufactured goods and services, and they could 
encourage indigenous manufacture or provision by 
making known their procurement policies. They 
could also help to promote similar practices in lar­
ger local firms. This process would be likely to ben­
efit LEIs as well as local SMEs. 
1.17. Company, legal and tax regulations vary 
between Member States, in relation to cooperatives 
for example. The Commission should seek to align 
these more closely across the Community and 
remove those obstacles which discourage new forms 
of small enterprise and cooperation. 
2. Specific points 
2.1. Article 11.1 
The Committee emphasizes that encouragement to 
establish LEIs should not involve any form of coer-
No C 206/28 Official Journal of the European Communities 6. 8. 84 
cion of individuals, and that the recognition and 
encouragement of LEIs should not outpace the 
creation of the necessary support structures, other­
wise frustration will result. 
Close communication between the social partners 
and public authorities is important and support 
should be directed to those local areas where the 
willingness to cooperate can be demonstrated. 
2.2. Article 113 (ii) 
The Committee emphasizes the need to avoid any 
duplication and unhelpful competition between 
intermediary bodies in a particular locality. Local 
authorities have an important role to play here. 
2.3. Article 11.3 (Hi) 
The provision of premises is important, particularly 
if this can be coupled with other appropriate sup­
port measures, e.g. the reduction of initial premises 
costs, the provision of common services, counselling 
and advice services. 
2.4. Article II.3 (iv) 
The Committee emphasizes that tendering for 
public contracts must not be used to reinforce pres­
sures on local authorities to withdraw from their re­
sponsibilities as the primary providers of key local 
services. The positive promotion of local purchasing 
by local authorities themselves should be encour­
aged. 
2.5. Article II.5 
Clearly LEIs which provide a community service 
and involve particularly disadvantaged groups may 
require continuing support. However, concern is 
with viable enterprises and LEIs which aspire to via­
bility, and therefore there is a need to establish a 
sensible period of aid in terms of time for support 
for LEIs, particularly those which involve the newer 
forms of community enterprise where social rather 
than commercial objectives are predominant. 2.6. Article II.6 
The Committee emphasizes that temporary income 
support measures rather than unemployment ben­
efits as such could be made available to those who 
decide to start up LEIs and that there must be 
appropriate safeguards to ensure that pressure is not 
put on unemployed persons to 'volunteer' under 
duress in starting up such activity. At the same time 
LEI projects should be appropriately examined in 
order to ensure their feasibility. 
2.7. Article II.7 
Whilst welcoming the proposals to facilitate LEI 
activity, the Committee emphasizes that official pro­
cesses are nonetheless needed in order to ensure that 
LEI projects are realistic and feasible, and in this 
respect the intermediary bodies have an important 
role to play. 
2.8. Article 11.8 
Training and education are particularly important 
and the Committee feels that they should be made 
relevant to the needs of LEIs in terms of content, 
methodology and access. In addition, as noted 
earlier, discussion of the potential for involvement 
in the wide range of opportunities for self-sustaining 
employment should be encouraged in the school 
curriculum. 
2.9. Article III.I (i) 
The use of Community instruments should be given 
urgent attention and should be reviewed on more 
imaginative lines. Progress should not be prejudiced 
by the Commission's proposals for further research 
and evaluation of LEIs. 
2.10. Article II. 1 (ii) 
On this point concerning the exchange of informa­
tion, the Commission should consider the setting up 
of a 'clearing house' for information and advice on 
LEI activity and support, on the same basis as that 
to be established for the Poverty Programme. 
6. 8. 84 Official Journal of the European Communities No C 206/29 
2.11. Article III. 1 (Hi) 
Reference is made earlier in the opinion about the 
need to be clear about the main objective in promot­
ing LEI activity. This is an essential prerequisite to 
the form of the future evaluation and research pro­
posed by the Commission. 
2.12. Article III.2 (ii) and (Hi) 
The Committee supports the proposals to carry out 
further consultations and research as a basis for 
future action on a range of issues, though this 
should not prejudice the urgent requirements to 
facilitate LEI access to existing funds and the need 
Done at Brussels, 23 May 1984. 
1.1. The Second Consumer Action Programme for 
1980 to 1985 adopted by the Council in May 1981 
must be regarded as an extension and elaboration of 
the First Programme for 1975 to 1980. However, it 
also includes a new element, viz. the producer-con­
sumer dialogue, which is seen as a new way of to review the appropriateness of existing Com­
munity instruments. 
The research work should include the following cri­
teria: 
— full consultation with the social partners, 
— a closer and representative survey of the wide 
variety of LEI activities and official support 
agencies, 
— special consideration as how best to promote 
more reasonable Community-wide bankruptcy 
regulations and support local initiatives by all 
involved to rescue viable parts of failed enter­
prises. 
The Chairman 
of the Economic and Social Committee 
Francois CEYRAC 
developing consumer policy in addition to legisla­
tion. 
1.2. The Committee's point of departure is that 
consumers should have freedom of choice with 
regard to goods and services in a market economy, Opinion on the producer-consumer dialogue 
(84/C 206/10) 
A. LEGAL BASIS FOR THE OPINION 
On 23 and 24 February 1983 the Economic and Social Committee, acting under the 
fourth paragraph of Article 20 of its Rules of Procedure decided to draw up an 
opinion on the abovementioned subject. 
Procedure: 
The Section for Protection of the Environment, Public Health and Consumer Affairs, 
which was responsible for preparing the Committee's work on the subject, adopted its 
opinion on 26 and 27 April 1984 in the light of the report by Mr Hilkens. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
At its 217th plenary session, meeting of 23 May 1984, the Economic and Social Com­
mittee adopted the following opinion by 63 votes to 48 with 27abstentions: