WRITTEN QUESTION E-1422/96 by Bárbara Dührkop Dührkop (PSE), Ludivina García Arias (PSE), Juan Izquierdo Collado (PSE) and Fernando Pérez Royo (PSE) to the Commission (6 June 1996)

Subject: Percentage of SMEs in the European Union

In its Recommendation 96/280/EC of 3 April 1996 ((OJ L 107, 30.4.1996, p. 4. )), concerning the definition of small and medium-sized enterprises, the Commission defines SMEs in Article 1 of the annex as enterprises which have fewer than 250 employees and an annual turnover not exceeding ECU 40 million.

In various resolutions the EP has expressed the view that these figures cover enterprises which should in fact be considered as large.

What percentage of enterprises in the Community in general and in each Member State does the Commission estimate to meet its definition of a SME according to the above figures?

Does the Commission not think that, if these are the figures used, Community aid to SMEs runs the risk of being diluted?

Answer given by Mr Papoutsis on behalf of the Commission (5 July 1996)

By adopting a recommendation on the definition of small and medium-sized enterprises (SMEs) on 3 April 1996, the Commission was acting in response to the wishes of the Council and the Parliament ((Resolution of 24.10.1994 on the Commission communication on the implementation of an integrated programme in favour of SMEs and the craft sector - OJ C 323, 21.11.1994. )). This recommendation provides for the first time a body of precise rules for defining SMEs for the purposes of both Community instruments and programmes and those carried out by the Member States. Beforehand, some measures in favour of SMEs used a threshold of 500 employees or were not part of any framework of precise criteria and could therefore benefit large enterprises in some cases. However, the definition contained within the recommendation now allows the benefit of these measures to be restricted to those enterprises employing fewer than 250 people, that is to say, the enterprises which really need it.

Enterprises employing fewer than 250 people represent 99.8% of European enterprises, but only 65% of total employment and 63% of total turnover in Europe. When setting the size threshold at 250 employees, the Commission did not want to break new ground by creating a further threshold, given that several Community legal acts had already used the 250-employee threshold, particularly the fourth Directive 78/660/EEC of 25 July 1978 ((OJ L 222, 14.8.1978. )) on company law, the Community guidelines for aid to SMEs ((OJ C 213, 19.8.1992. )) and the Community SME initiative ((OJ C 180, 1.7.1994. )). As for the other criteria, that is to say those concerning independence and financial thresholds (annual turnover not exceeding ECU 40 million or balance sheet total not exceeding ECU 20 million), these have the effect of limiting the number of enterprises which can be classified as SMEs because they allow one to rule out enterprises which have capital resources comparable to those of large enterprises on the one hand and, those which, due to shareholdings on the part of large enterprises, can benefit from the support of such an enterprise, on the other.

The Commission is convinced that thanks to this recommendation, Community action in favour of SMEs, far from being diluted, will on the contrary concentrate on those enterprises which encounter difficulties due to their size. Furthermore, the Community legislator and the Member States are free to set lower thresholds (such as those of 50 and 10 employees) if they feel it necessary to give a sharper focus to some of their policies.