OPINION of the Economic and Social Committee on the Communication from the Commission on the financial problems experienced by small and medium-sized companies
Date: 1994-07-06
Institutions: European Economic and Social Committee
Subjects: corporate finance, financing policy, small and medium industries, small and medium-sized enterprises













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51994AC0850

OPINION of the Economic and Social Committee on the Communication from the Commission on the financial problems experienced by small and medium-sized companies  


Official Journal C 388 , 31/12/1994 P. 0014 





Opinion on the Communication from the Commission on the financial problems experienced by small and medium-sized companies (94/C 388/04)On 22 February 1994 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the abovementioned Communication.The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee`s work on the subject, adopted its Opinion on 8 June 1994. The Rapporteur was Mr C. Lustenhouwer.At its 317th Plenary Session (meeting of 6 July 1994), the Economic and Social Committee adopted the following Opinion unanimously.1. Introduction 1.1. The Committee played an important part in the preparation of the Commission Communication now under discussion. The views expressed by the Committee on the financing of SMEs () have contributed to the growing interest in this question at European level.1.2. At the meeting of the Council of the European Union of 11 November 1993 the Council adopted a Resolution () on strengthening the competitiveness of enterprises, in particular of small and medium-sized enterprises and craft enterprises, and developing employment in the Community. At the meeting the Commission also submitted the Communication now under discussion.In its Resolution the Council asks the Commission 'to promote ... the relations of SMEs with financial institutions and, inter alia, a closer relationship between the creators of enterprises and suppliers of capital`.The Council also asks the Commission to take care that the European Investment Fund assistance really did benefit the SMEs concerned and, in the case of the smallest SMEs, ensure that there was access to guarantee mechanisms.The Council asks the Member States to:'take care that both public and private intermediaries, specialized in financing SMEs, are in a position to call on the EIF for the granting of guarantees to SMEs`,and to'take care that a stable and favourable financial climate exists for SMEs so that they can achieve the balanced financial structure they need to anticipate more accurately the various economic cycles`.1.3. In the White Paper on Growth, Competitiveness and Employment submitted by the Commission to the European Council of 9 and 10 December 1993, the Commission draws attention specifically to the question of improving the financing of companies (chapter 2.7). The Commission points to the need for measures to improve relations between financial institutions and SMEs for the purpose of paving the way for a more generous allocation of private finance to SMEs, and to ensure that the most appropriate financial instruments are made available to a greater number of companies. The Commission also says that the 'introduction of new financial facilities for SMEs` should be one of the three main pillars of a future integrated Community initiative for this sector.The proposal for this Community initiative has now been submitted () and the Committee will be issuing a separate Opinion on this.2. Reasons for an EU Policy on the financing of SMEs 2.1. The financing problems of SMEs have so far not been dealt with systematically at European level. Existing facilities (the seed capital project, the Community SME initiative, the Adapt initiative and R& D facilities) have been drawn up in isolation with a single, ad hoc objective.The European Investment Bank also lends large amounts to SMEs for its own account, by making global loans to financial institutions or trade banks at national or regional level.The very limited number of EU financing arrangements available include seed capital funds.2.2. Despite the sources of finance for SMEs referred to in point 2.1, it cannot yet be said that the EU has a coherent overall policy for the financing of SMEs. One possible explanation for the European Union`s reticence in this area is that small companies are by their nature usually active only in local markets and in most cases therefore have to be financed locally.Differences between firms in various sectors also make a European initiative in this area difficult; the financing situation of commercial companies, for instance, is very different from that of industrial companies.In this connection, it is striking that the Round Table of High-Level Representatives of the Banking Sector, set up by Commissioner Vanni d`Archirafi, does not include any representative of the wholesale or retail trades.2.3. Despite all the differences, European SMEs do have sufficient common characteristics to make an EU financing policy worthwhile.Reasons why such a policy is needed:- SMEs in all EU Member States have the same financing problems (point 2.3.1);- the establishment and operation of viable SMEs creates employment (point 2.3.2);- SMEs are becoming increasingly international (point 2.3.3);- it would provide an opportunity for new entrepreneurial activity at EU level by making EU and national financial infrastructures more transparent (point 2.3.4);- there must be healthy competition between firms in the EU Member States (point 2.3.5).For a more complete account supported by statistical data, the Committee would refer to the Second Annual Report of the European Observatory for SMEs (), which contains a separate chapter (Chapter 6 - Capital and Finance) summarizing the similarities and differences with regard to the financing of Europe`s small companies.2.3.1.Financing problems of SMEs in the EUSome fifteen problems affecting the financing of SMEs are listed in the Commission Communication.These can be categorized as follows:a) Lack of knowledge: - on the part of SMEs, of forms and sources of finance and management skills; - on the part of providers of capital, of SME demand for capitalb) Lack of security which can be offered by SMEsc) Attitude of financial institutions: - the rigid policies of banks and leasing companies; - the increasing risk-aversion of venture capital companies; - the reduced willingness to finance small investmentsd) The high cost of supervising and assisting SMEse) The lack of capital markets for SMEs: - the inadequate number of 'marriage bureaus` bringing together private investors and SMEs; - lack of exit routes for venture capital companies; - the lack of a properly functioning 'over the counter` stock market.Studies of SMEs in the various Member States reveal common problems. However, the Commission Communication also shows that the willingness of banks to take equity stakes in firms varies.An EU policy could help solve some of these common problems.2.3.2.Job creation, inter alia, by the setting up and operation of viable SMEsIt is by now well known that SMEs` contribution to economic development and employment is substantial. The EU has some 14.7 million very small companies (0-9 employees) and the total number of SMEs (0-499 employees) is some 15.8 million. The SME sector employs over 68 million workers, i.e; 72% of the total workforce in the private, non-primary sector (excluding agriculture). The average number of employees ranges from four in Italy and Spain to ten in Luxembourg and the Netherlands (1990 figures).SMEs` share of total employment remains very stable, particularly in times of economic downturn. SMEs shed jobs more slowly than large companies and take on workers more quickly when economic growth resumes.It is for this very reason that Commission President Delors` White Paper on Growth, Competitiveness and Employment draws attention to support for the development of SMEs. As the White Paper states (), financing and improved access to financing and credit facilities play a role here, at EU level too.Small promising companies (i.e. companies which want to grow and which have the potential to do so) must be given the chance by the EU to grow and thus contribute to job creation. Corporate life cycles and patterns of development ensure that companies with growth potential can take the place of firms ceasing to trade. One of the conditions for continued growth is financing. The question arises as to whether suitable forms of finance can be offered by suitable sources to these growing firms.2.3.3.The increasing internationalization of SMEsAs Europe progresses towards a single market, European SMEs will be increasingly encouraged to increase their interests in companies in other Member States. There is already evidence that small firms are increasing their export activity (including direct exports) and entering into more transnational associations with other small firms and also larger firms.This, coupled with direct cross-border investment, means that the financial interests of SMEs, and thus the demand for finance abroad, are likely to grow substantially.More Community measures and instruments are needed to help counter the deterioration in the financial situation of small firms. This need is highlighted by recent research showing an increase in the average time taken to pay bills in all the Member States (cf. point 3.5.2).2.3.4.Transparency of EU and national financial infrastructuresAgainst this background, it is not just the availability of finance in the home country (national, regional) which is important, but also knowledge of availability abroad (national, regional). A knowledge of EU financial facilities for SMEs also becomes more important.It is often particularly difficult for small companies lacking specialized staff to find their way through the maze of regulations in order to identify the most suitable financial instruments and the bodies (public authorities, banks, financial markets) which manage them.2.3.5.Healthy competition between Member StatesThe non-distortion of competition between Member States is one of the EU`s most important policy aims. National policies are in competition in the financial and tax fields. The EU is using the Community Framework Regulation to attempt to establish a framework for national government support for SMEs.EU policy includes many financial facilities. The Commission Communication lists a number of these which are of relevance to the financing of SMEs. What is not clear, however, is how, and to what extent, SMEs in the various Member States make use of these.The Commission may increasingly need to coordinate and even initiate financial facilities in the interests of healthy competition. This will necessitate a real EU policy vision on the financing of SMEs.3. Basis for EU Policy 3.1.SMEs` lack of knowledge3.1.1. The financing of small companies is only one of the many questions demanding the attention of entrepreneurs. Often the small, independent entrepreneur is a specialist rather than an all-round manager. But in a dynamic internal market specialization will have to give way to modern entrepreneurial skills if the small company is to stay in business. This requires investment in the abilities and skills (specialist, management and language skills, knowledge of the laws of other Member States, etc.) of both the entrepreneur and his workforce. It should be reiterated that an efficient human resources policy is needed, particularly in small companies where experience accumulated in large companies can be applied, mutatis mutandis. As well as staff policy and internal organization, more professional SMEs need to pay attention to financing. Entrepreneurs` expertise in this area needs to be kept constantly under review and here the European Union has a role to paly in lending support.3.1.2. The Commission`s view on the EU policy to be developed in this area is set out in paragraph 67 of its Communication, where it states that EU measures should be coordinated with existing national and regional measures. It is difficult to gain an overview of new measures to promote financial and management skills in SMEs. SMEs thrive best on local business knowledge.The ESC endorses this view but stresses that the EU should encourage the Member States to do more to raise the level of financial and management skills in SMEs. This can be done by making EU resources available to national authorities, and thus indirectly to SMEs. The Member States would be able to use these resources to develop counselling and training programmes for entrepreneurs. Investing in the improvement of management skills often makes a greater structural impact than one-off financial assistance.3.2.Lack of security which can be offered by SMEs3.2.1. Apart from good management and the prospect of good investment returns, lending institutions require security for their loans.Many EU SMEs are not in a position to provide such security. Another factor is that in some Member States banks are very risk-averse. They justify this attitude by the need to protect their depositors` savings. The Committee feels that the banks place too much emphasis on security. It is regrettable that more weight is not attached to the applicant company`s medium to long-term prospects.3.2.2. A way round this situation has been found in some Member States, where mutual guarantee companies have been set up specifically to provide security for loans to small companies. For example, Germany has long had its 'Bürgschaftsbanken`, and France its 'sociétés de cautionnement mutuel`. In the last few years a European association of guarantee institutions of this kind has been set up with the help of the European Commission, and efforts have also been made to establish institutions of this kind in countries where there is a need for them. In its Opinion on the subject () the Committee wholeheartedly endorsed the role of mutual guarantee systems of this kind, as well as the Commission`s activities in this area.3.2.3. The ESC also strongly recommends the use of guarantee arrangements by the Member States as a policy instrument for the financing of companies unable to provide sufficient security. Experience accumulated over several decades in the Netherlands shows that loans needed for investment can often be obtained in this way where there is a shortage of security. The Commission should look into the possibility of setting up EU guarantee arrangements for financing joint investments by firms from different Member States.3.3.Financial independence of SMEsThe heads of many SMEs attach great importance to their independence. Medium-sized firms are often reluctant to make use of external risk capital for fear of losing part or all of their financial independence. Shareholders expect a say in the running of the company, and dividends. This does not always suit the firm`s owner or majority shareholder. The desire to retain financial independence may even result in potentially profitable investments being forgone. Entrepreneurs often tend to resist interference by outsiders.The entrepreneur sometimes fails to appreciate that the loss of financial independence can have compensating benefits (financing of expansion, stronger balance sheet, improved image, greater share liquidity).It should also be borne in mind that ideas on the independence of SMEs have changed radically over the years.Cooperation is now often seen in a positive light. Through cooperation entrepreneurs can increase their market strength, consolidate their competitive position and improve their market performance as they form part of a network of firms and organizations which create added value. A few decades ago even the taking on of (bank) loans was approached with great reserve.Loans and cooperation have, however, opened up new and promising prospects for entrepreneurs and boosted their competitiveness.The ESC feels that more needs to be done to convince SME entrepreneurs of the advantages of attracting external risk capital. Banks and investors unrelated to firms should be encouraged to take more equity stakes.3.4.Start-upsIn most Member States start-ups have difficulty obtaining finance, especially during recessions. During recessions financial institutions, including private venture capital firms, banks and leasing and factoring companies are less willing to finance start-ups. This is a consequence of losses on equity stakes in, and loans to, start-ups in the recent past.The cost of supervising and assisting start-ups is also relatively high in all the Member States. This creates high barriers for many firms.Consequently, many new companies are established with an inadequate capital base, which rapidly puts the brakes on future expansion. The ESC stresses once again how important it is that an entrepreneur be properly prepared before setting up a company. Drawing up a realistic business plan requires thorough training and preparation. A newly established firm should always be based on such a business plan. It gives an insight into the market prospects of the new firm and is an important management tool, e.g. with regard to obtaining credit facilities.The ESC therefore urges the banks to pay more attention to the financing of start-ups, even in periods of recession. The handling of loan applications from young entrepreneurs starting up in business will in particular require extra supervision. An increasing number of these entrepreneurs are women and in many cases it will be necessary to assess the technological and innovative calibre of the starting-up company.The ESC advocates financial support to offset the high cost of supervising and assisting SMEs.In particular, the ESC asks that attention be paid to the supervision and assistance of restarts. The problems of this specific group of companies have not been sufficiently studied. Assistance should be made available from Community (e.g. the new Community SME initiative) and national resources to offset the cost of advice and information.3.5.Cross-border transfers of small amounts3.5.1. The cross-border transfer of relatively small sums (ECU 2,500-10,000) is another under-researched aspect of international and European business deals. There are problems with speed, cost and transparency. The main suffers are SMEs, which make the most use of this kind of small-scale transfer.The ESC urges the EU, in consultation with the banks, to tackle in the near future the technical problems of cross-border payments, in particular the cost of small transfers. Commissioners Scrivener and Vanni d`Archirafi have taken an initiative aimed at improving the transparency of such transactions and tackling the problem of the duplication of fees (). The Committee will be looking into this issue in greater detail in a separate Opinion.3.5.2. In this connection, the ESC draws attention to the problem of late payment of bills. Small supplier companies suffer particularly from this practice. The Committee awaits with interest the Commission`s reaction to its Opinion on this point.3.6.Capital market3.6.1. The Commission Communication highlights the problem identified in many Member States of venture capital companies` lack of an exit route from their equity stakes.The Communication also points out that there is no properly functioning over-the-counter market for the shares in medium-sized companies.Medium-sized companies have access to only a limited market for external risk capital.In order to fill this gap in the financial infrastructure for SMEs, the possibility should be studied of establishing a formal capital market for SMEs.A number of initiatives of this kind have been taken over the last few years in some Member States.Some of these initiatives are at the experimental stage, others still in their infancy.The ESC feels that the EU should support initiatives of this type.3.6.2. The lack of an official capital market for SMEs has been compounded by the absorption of markets on which the shares of medium-sized companies were previously traded, such as Britain`s third market and the Netherlands` 'parallelmarkt`, into stock markets with more stringent admission conditions, which many medium-sized, and even large, companies cannot meet.It may be that the disappearance of these national capital markets will make room for an official European capital market for SMEs. The advantage of such a market is that shares in companies would be in adequate supply and demand, thus enhancing liquidity.The ESC urges the EU to carry out a feasibility study on the establishment of a recognized European market giving European firms, especially small firms, access to (risk) capital.3.7.The accessibility of EU fundsThe ESC has stated in the past that SMEs cannot make sufficient use of EU funds, as a result of complex, non-transparent rules, limited accessibility and inadequate information. There are similar problems over government contracts for works and the supply of goods and services.The ESC calls for simplification of EU financial facilities for SMEs and better information.Information could be improved by the inclusion of examples in the explanatory material. This would make it easier for entrepreneurs and their advisers to understand the rules.3.8.European Investment Fund (EIF) ()3.8.1. The ESC notes with satisfaction that following the Commission`s proposal to boost economic development in the EU, which was submitted to the Edinburgh Summit in December 1992, a new ECU 1 bn loan facility, the EIF, has been launched for SMEs. It has also been decided to set up an interest-rate subsidy instrument for SMEs. The Committee is, however, surprised that it has taken so long to make such an instrument available.Under this instrument, banks lending EIF funds as European Investment Bank (EIB) intermediaries may make use of interest-rate subsidies of up to two percentage points.Loans must be used for job-creating investment in SMEs. However, it is expected that little use will be made of this instrument in some Member States. In some Member States the problem of financing is one of obtaining risk capital, e.g. in the form of subordinated loans or equity. The EIF is not likely to help solve this problem.The ESC urges all those involved in implementation, the EIF, the EIB and the national intermediaries, to make the facilities as accessible as possible to small as well as medium-sized firms. This includes firms with fewer than ten employees, which find it less easy to obtain information on EU facilities. In the interests of accessibility, the facility should be tailored to the firm.The implementing EU institutions must ensure that the firms concerned obtain the full benefit of EU interest-rate subsidies.3.8.2. In conclusion, another aspect of the accessibility of financial facilities for SMEs is the big difference that exists between firms with a few hundred employees (up to a maximum of 500) and firms with fewer than 25 employees. A Commission report () issued two years ago stated that Brussels financial facilities would define SMEs differently, according to the target group.It is more difficult for small firms to obtain information on Brussels facilities than for larger ones.If the aim really is that financial facilities should also reach smaller SMEs, then in the course of implementation account needs to be taken of smaller firms` difficulties in obtaining access.3.9.Financial infrastructure for SMEsIn tackling the financing of SMEs, it is important to aim for optimum diversity of supply on the capital market (in the broadest sense), combined with greater opportunities for internal financing. However, the supply of risk capital in many cases lacks transparency. It has repeatedly been established that sufficient funds are on offer, but the only access to these funds is via informal personal and institutional networks.It is also not clear what forms of finance are on offer, how much, and on what conditions. Nor is it clear whether these networks are interconnected, and if so, how. No overview of total supply is available. Large companies know their way around these networks, but an SME entrepreneur is less well placed. These informal networks do little or nothing to facilitate SMEs` access to capital. This part of the financial market is effectively closed to SMEs.3.10.Private individuals3.10.1. Private individuals have traditionally played a major part in the financing of SMEs. But government policy in some Member States does not reflect this. The continuing involvement of this important group of investors is of great importance to SMEs.The kind of private investor involved can be described and categorized in greater detail. At all events these investors are private individuals, not institutional investors, such as pension funds and insurance companies, nor private venture capital companies.Private investors can be subdivided into:- informal investors;- medium-sized passive private investors;- small passive private investors.3.10.2. Large-scale private investors fall into the informal category. They are usually actively involved in the running of the firms which they part-finance. They provide advice as well as funds. The informal investor can be briefly defined as a medium-sized active private investor.3.10.3. Medium-sized passive private investors are another identifiable group. These are investors willing to invest a large sum but not wishing to be actively involved in the business.3.10.4. Finally, there are small passive private investors who invest relatively small sums. These are typically men or women who, in addition to saving via institutions, are able to save, or have already accumulated, substantial sums.Small private investors include the entrepreneur`s family, friends and acquaintances (the traditional source of finance for SMEs). It is not known what proportion of external risk capital is contributed by this group. No research has been carried out in this area.Although the involvement of this group is believed to have declined over the years, its importance should not be underestimated. The fact that the size of the group is not known is evidence of failure to appreciate its past, and possibly present, importance.3.10.5. The ESC feels that more attention should be paid to this group of investors, and stresses its importance in the financing of SMEs. A particularly interesting phenomenon is the emergence of 'business angels`, themselves often entrepreneurs, or former entrepreneurs, who are willing to invest relatively small sums (in the UK approximately £ 50,000 per deal) in young companies with good prospects.Except in the United Kingdom and the Netherlands, where some data is available, further research is needed to fill the large gaps in our knowledge of private individuals` preferences with regard to investment in high-risk projects and firms, and their objectives with regard to the risk-reward ratio of investment in SMEs.3.11.Professional investors and the provision of risk capital to SMEs3.11.1. The previous paragraph emphasized the role of the small private investor. But this leaves aside the very important role in the provision of risk capital of professional investors, who could form the (hard) core of a (formal) capital market for SMEs.These investors can be categorized as:- operating in a more or less professional environment;- having extensive business knowledge;- taking sizeable stakes, linked with a degree of supervision.This category includes informal investors, medium-sized passive investors, institutional investors, banks, investment funds, specialized investment institutions and private venture capital companies. These investors have a greater need than the small private investor for information on the firm, the sector in which it operates, and other relevant information.3.11.2. Firms wishing to raise risk capital in a (formal) capital market need to bear this in mind. Relevant information needs to be made available periodically. The company needs to keep its shareholders informed on its financial situation. This requires good financial management. This and the publicizing of financial information are an important part of company policy.The ESC stresses the need for professionalism in managing the financial affairs of SMEs. Where financial knowledge appears insufficient, the problem needs to be tackled by means of information and courses. More emphasis should be placed on finance in the training of self-employed entrepreneurs.3.12.Institutional investors and the provision of risk capitalMany EU institutional investors invest a relatively small part of their funds in risk capital in large, usually stable, companies. The rest of their funds are invested in lower-risk instruments (property, mortgages, bonds etc).The institutions could be encouraged to invest a greater part of their funds in SMEs.The institutions point, however, to the limited returns on investment in SMEs, and the associated risks, but many SMEs produce good returns.4. Fiscal instruments Apart from the direct financing instruments listed above, the Member States` tax systems are clearly also relevant to the financing of small firms. Thus, many Member States offer tax breaks to stimulate certain types of entrepreneurial activity. The business angel phenomenon could, for example, be encouraged by providing tax incentives for investments of this kind. Moreover, the absolute level of taxation affects firms` competitive position. Although these instruments fall within the sphere of direct taxation, and thus to a great extent outside the European Union`s field of responsibility, the ESC nonetheless feels that attention should be paid at European level to the tax aspect of the financing issue. The Committee is pleased to note that this issue receives attention in Commission Communication on a strategic programme for the internal market (). This deals specifically with the self-financing capacity of (usually small) firms which are not incorporated.The Communication also looks into the question of taxes levied on transfers of ownership of undertakings. The Committee feels that the Recommendation to be published on the matter should take as its starting point the need to maintain the liquidity position of companies changing ownership. Transfers of ownership often take place within families, and the tax liability thus arising often represents a serious threat to the continuation of the firm as a going concern.In conclusionAs the above text makes clear, there are many aspects to the financing of small and medium-sized enterprises. The discussion of the matter at European level, currently underway, must examine each of these aspects and identify the right level at which to tackle problems. In most cases the solution will have to come from the market itself, by granting small firms easier access to sources of finance.The Committee has also noted with interest the results of the Round Table of High-Level Representatives of the Banking Sector, as set out in the Report entitled 'Towards a more effective partnership between the financial institutions and SMEs`, submitted to Commissioner Vanni d`Archirafi. Whilst valuing the work of the Round Table, the Committee cannot help being slightly disappointed by the 'toughness` of the recommendations contained in the Report. The recommendations on bank credit and the strengthening of SMEs` equity bases in particular do not go far enough. Moreover, the recommendations pay little or no attention to the need for the banks to become less risk-averse and more open to the growth potential of new clients. It is striking, however, that in the Report the banks themselves concede that the skills their staff bring to the assessment of loan applications from small firms leave room for improvement.Despite these reservations, the Committee welcomes this initiative by a member of the Commission and suggests that he continue these activities in the form of a round table of high-level representatives of non-banking areas, such as the venture capital sector, informal investors and business angels, institutional investors and operators in the capital markets (secondary and tertiary markets). In some other cases financing problems will be mainly a matter for the Member States. And yet action is also needed from the European Union in a significant number of areas discussed above.Attention has been drawn to the importance of training of entrepreneurs and workers, and improved information. The recently submitted proposal for a Community initiative aimed at SMEs can be put to good use here. But the Committee feels that financing SMEs is a problem in all regions of the Community. To the extent that the Community initiative is limited in scope, being aimed at specific backward areas, the Committee feels that the need for additional policies to meet small entrepreneurs` need for skills should be looked into now.Done at Brussels, 6 July 1994.The Presidentof the Economic and Social CommitteeSusanne TIEMANN() In this Opinion SMEs are defined as small and medium-sized private-sector enterprises in all sectors (industry, trade, crafts, services) excluding agriculture.() OJ No C 326, 3. 12. 1993, p. 1 et seq.() The future of Community initiatives under the Structural Funds [COM(94) 46 final, 16. 3. 1994].() The European Observatory for SMEs, Second Annual Report, April 1994 by the European Network for SME Research and coordinated by EIM, Zoetemeer, The Netherlands, ISBN 90-371-0499-1.() White Paper on Growth, Competitiveness, Employment, December 1993, chapter 2, B, points 2.6 and 2.7.() The Role of Mutual Guarantee Systems in the Financing of SMEs in the European Community, ESC Opinion of 29. 4. 1992, CES 492/92, OJ No C 169, 6. 7. 1992, Rapporteur: Mr E. Muller.() 'Transparence et qualité d`exécution des paiements transfrontaliers`, Communication from Mr Vanni d`Archirafi and Mrs Scrivener, Brussels, 2. 12. 1993, 0/93/358.() In this connection the ESC would refer to its Opinion on the role of the EIB (Rapporteur Mr E. Muller), which deals in greater detail with the relationship between the EIB and SMEs (OJ No C 133, 16. 5. 1994).() Report from the Commission to the Council on the definitions of small and medium-sized enterprises (SMEs) used in the context of Community activities [SEC(92) 351 final], Brussels, 29. 4. 1992.() Communication from the Commission to the Council - Making the most of the internal market: Strategic Programme, COM(93) 632 final, Brussels, 22. 12. 1993.