WRITTEN QUESTION E-1516/01

by John Purvis (PPE-DE) to the Commission

(21 May 2001)

Subject: The definition of small and medium-sized enterprises

Middle-sized European companies in certain sectors, such as food manufacturers, who do not come under the definition of SME, are facing difficult competition from powerful multinationals when trying to enter other Member State markets. Would the Commission consider changing the definition of SME to take into account the amount and type of competition in the market place? Alternatively would the Commission consider establishing a new category to provide special consideration and policies for this vitally important grouping?

Answer given by Mr Liikanen on behalf of the Commission

(24 July 2001)

The definition of small and medium-sized enterprises (SMEs), which is set out in Commission Recommendation 96/280/EC of 3 April 1996 concerning the definition of small and medium-sized enterprises(1), is intended to replace the various existing national definitions and the various definitions of SMEs at Community level in cases where a definition of SMEs is to be used in Community policies applied within the Community and the European Economic Area. This joint definition, which has been adopted by the Member States, limits the danger of distorting competition between enterprises and the risks of inconsistency in the application of Community policies within the Union and the European Economic Area.

The Commission work programme for 2001 provides for a review of the 1996 Recommendation concerning the definition of SMEs. The main objective of this review is to adapt the threshold for turnover and balance-sheet total in order to take account of economic changes and to examine other issues, taking into account, for example, the experience acquired in the functioning of the criterion of independence of the enterprises concerned. The fact that there are these two alternative thresholds already enables the situation of enterprises with different characteristics to be taken into account, without the need for a more detailed breakdown. The contribution of SMEs to employment and the difficulties they may encounter, for example, in terms of financing, are in fact characteristics which are common to SMEs in all sectors, and there seems to be no point in establishing a complex system which would result from treating individual sectors differently.

Moreover, if certain enterprises or sectors needed to be looked at by the Commission or public authorities in the Member States, the Commission is of the opinion that it would be more appropriate to deal with the question under the relevant programmes and policies rather than adopt a definition of SMEs which differed according to the markets, enterprises and/or sectors concerned. In particular, the definition of SMEs should not be dependent on the degree of competition in the various sectors, which is mainly a matter to be considered from the point of view of competition policy and policy with respect to state aid.

In conclusion, the Recommendation concerning the definition of SMEs is not an instrument designed to conduct sectoral policies and the Commission therefore has no plans at present to introduce new categories or treatment which differs according to sector.

(1) OJ L 107, 30.4.1996.