WRITTEN QUESTION E-1815/96 by Roberto Mezzaroma (UPE) to the Commission (5 July 1996)

Subject: Incentives for small and medium-sized European undertakings

A number of rather interesting findings emerged from an international symposium on the craft industry held recently, which provide food for thought for the European Union.

In Europe, small and medium-sized undertakings account for 99% of the production system and employ 66% of the work force in this sector. Over the past three years, they have created 75% of all new jobs and have recorded an annual increase in turnover of 6%, as opposed to 3-4% for large undertakings.

Despite the importance of these findings, European economic policy focuses mainly on large industrial groups.

There is therefore a need to create favourable conditions for small and medium-sized undertakings, to promote a new, dynamic form of entrepreneurship, to cooperate with the public authorities in individual Member States and to promote 'twinning' arrangements between undertakings from different Member States in promising areas.

1. Given the above, would not the Commission agree that this trend should be reversed to the benefit of small and medium-sized undertakings, not by means of traditional incentives but by creating the conditions such undertakings require in order to be able to develop?

Answer given by Mr Papoutsis on behalf of the Commission (16 September 1996)

The Commission agrees small and medium sized enterprises (SME) are a key sector for generating growth and employment opportunities. However, in order to unlock SMEs' potential to meet the objectives of growth, competitiveness and employment more effort and resources are needed. The Commission therefore presented a policy paper to the Madrid European Council calling for a more ambitious approach in favour of SMEs. The European Council endorsed the Commission's ideas and called for the objectives of the Madrid SME policy paper to be put into practice as soon as possible, in the framework of the next integrated programme for SMEs. The Commission has therefore just adopted a new integrated programme for SMEs and the craft sector ((COM(96) 329 final. )) in order to provide a comprehensive framework for the increased coordination of policy measures in favour of SMEs under various Community policies. The integrated programme itself covers three main elements of SME policy:

- measures to promote greater coordination of Member States' policies affecting SMEs, in particular through the exchange of best practice;

- measures ensuring better coordination of the various Community measures in favour of SMEs through their programmes and policies such as the structural funds, or the research and technological development programme, the European investment bank and the European investment fund;

- measures for SMEs developed within the framework of the specific Community SME policy actions proposed in the third multiannual programme for SMEs (1997-2000) ((OJ C 156, 31.5.1996. )) which is currently under discussion in the Council.

It is to be hoped that this new dynamic and integrated approach will be of benefit to small and medium sized businesses throughout the Community. A major part of this policy, both at the Community and Member State level, is the improvement of the overall business environment which encourages entrepreneurship and risk taking in order that businesses may grow and develop.

An important step was taken in December 1994 with the setting up of the Commission's committee on improving and simplifying the business environment. This committee is a practical instrument demonstrating the joint commitment of Member States and the Commission to a policy of administrative and regulatory simplification particularly in respect of SMEs. It constitutes a framework for the exchange of best practice between Member States. Where appropriate, the Commission will be making recommendations to the Member States about measures which could be taken to further improve the business environment and the relationship between administrations and business.