Proposal for a COUNCIL DECISION on a Third Multiannual Programme for Small and Medium-sized Enterprises (SMEs) in the European Union (1997-2000)
Date: 1996-03-20
Institutions: European Commission
Subjects: EU programme, competitiveness, economic growth, labour market, small and medium-sized enterprises

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

* 

-tr 

-it 

-tr 

Brussels,  20.03.1996 
COM(96) 98  final 

96/  0087  (CNS) 

"MAXIMISING EUROPEAN SMEs' FULL POTENTIAL _ 
FOR EMPLOYMENT, GROWTH AND COMPETITIVENESS" 

Proposal  for  a 

COUNCIL  DECISION 

on a Third Multiannual Programme 

for Small and Medium-sized Enterprises (SMEs) 

in the European Union (1997 - 2000) 

(presented  by  the  Commission) 

"MAXIMISING EUROPEAN SMEs' FULL POTENTIAL 
FOR EMPLOYMENT, GROWTH AND COMPETITIVENESS" 

9 

I 
THE MULTIANNUAL  SME  PROGRAMME 
WITHIN  THE  GLOBAL  FRAMEWORK  OF 
THE  COMMUNITY  ACTIONS  IN FAVOUR  OF  SMEs 

There is  now  widespread  recognition  that small  and  medium-sized enterprises  (SMEs) 
are  the  key  sector  for  generating  employment  opportunities  and  growth  within  the 
European  Union.  To  help  unlock  SMEs' full  potential  to  meet  these  objectives  the 
Commission  recently presented  a  report to the Madrid European  Council  calling for  a 
more ambitious policy  in favour  of SMEs.1 The conclusions of this Council endorsed this 
approach, inviting  the Commission to put the objectives of the Madrid SME Policy Paper 
into practice  as swiftly as possible.2 Accordingly,  the Commission announced that a four-
year programme  (1997-2000) would  be launched as part  of  the European  Confidence 
Pact  on  Employment  Clearly,  a  stronger  and  more  direct focus  on  SME  policy  is 
necessary  both  at  Member State  and  European Union level  to safeguard  existing  jobs 
and  to  create  new  employment  opportunities. Empirical  evidence shows  that  targeted 
help to SMEs  is a cost-effective way to support job  creation. 

A. THE CONTRIBUTION OF SMEs TO GROWTH AND EMPLOYMENT 

SMEs  are  the  key  sector  for  generating  employment  opportunities  and  growth.  SMEs 
account for 99.8% of all companies, 66% of total employment and 65% of business 
turnover  in  the  European  Union.3  The  employment  growth  rate  of  SMEs  is  greater 
than that of large enterprises.4 

Moreover, the  SME-dominated services sector has been a major  source of jobs  in recent 
years and continues to offer  significant  employment potential. Because of their  flexibility 
and  capacity  to  swiftly  adapt  to  the  evolution  and  specialisation  of  market  demands, 
SMEs  are  a  major  instrument  for  promoting  the  competitiveness  of  European  industry 
and  its capacity  to  penetrate  into third  country  markets. Especially  important  is the  role 
SMEs  play  in  less  favoured  regions  and  rural  areas  where  they  often  represent  the 
backbone of the  local economy. At the same time, the growing trend towards  contracting 
out of activities  and downsizing  of operations by large firms represents  both a challenge 
and  an opportunity  for  SMEs. The  rapidly  changing  technological  environment  and  the 
globalisation  of  the  markets  impacts  on  competitive  conditions  and  creates  new 
opportunities  for  SMEs. They  have therefore  a key role to play  for  increasing  economic 
and social cohesion in the Union.5 

B. WEAKNESSES IN SMEs'  JOB CREATION AND GROWTH POTENTIAL 

While  SMEs  are  potentially  a  dynamic  source  of  employment  growth  and  wealth 
creation,  it must  also be recognised  that they are inherently  weaker  and  more  vulnerable 
to failure,  particularly  in the early years. On average 50% of SMEs in the  EU  fail  within 
the first  five years of start-up.6 

1  "SMEs: a dynamic  source  of employment,  growth  and competitiveness  in the  European  Union",  Report 

presented  by the  Commission  to the  Madrid  European  Council,  CSE(95)  2087. 

2  Conclusions  o;  !ie Presidency,  SI(95)  1000 of  16.12.1995, p. 14. 
3  Enterprises  in  Europe, Third  Report,  1994, pp. 42-43. 
4  See  Footnote  1  above,  p.3. 
5 
6  Enterprises  in  Europe,  Third  Report,  1994, p.230. 

Ibid. 

> 

The relative weakness and vulnerability of SMEs arises primarily from  five sources: 

II 

• 
• 
• 

• 
• 

the increasingly complex legal, fiscal  and administrative  environment; 
difficulties  in accessing research programmes and exploiting research results; 
structural  weakness  of 
programmes; 
difficulties  in obtaining finance  at reasonable cost; 
barriers to accessing product and services markets. 

their  management  capacity  and 

ill-adapted 

training 

C.  REALISING S M E S'  POTENTIAL TO CONTRIBUTE TO EMPLOYMENT AND GROWTH 

To  maximise  SMEs'  contribution  to  growth,  competitiveness  and  employment,  it  is 
essential  that  Member  States  and  the  European  Union  reinforce  and  co-ordinate  their 
policies  in  favour  of  SMEs,  to  take  into  account  the  new  challenges  facing  European 
businesses.7 

Most measures for  SMEs need to be taken at Member  States level, as close as possible to 
the business itself. As highlighted  in the Commission's  SME Policy Paper for the Madrid 
European  Council8, all Member  States  (in particular  Germany, France, United  Kingdom, 
Spain and Belgium) have recently  strengthened  their policies for  SMEs and there is now 
a considerable degree of convergence between these policies.9 

In  this  area,  the  European  Union  can  play  a  vital  and  complementary  role  while  fully 
respecting the principle of subsidiarity. 

D.  THE COMMUNITY'S SME  POLICY 

In  line  with  the  objectives  of  Article  130  of  the  Treaty,  the  White  Paper  on  Growth. 
Competitiveness  and Employment  and the Integrated  Programme  in favour  of SMEs and 
the Craft  Sector, the Community's SME Policy aims at: 

•  encouraging an environment favourable  for the development of SMEs throughout the 

• 

EU; 
improving 
Europeanisation and  internationalisation. 

the  competitiveness  of  European  SMEs  and  encouraging 

their 

To  achieve  the  above  objectives  the  Community's  SME  Policy  is  based  on  two 
interrelated  programmes  :  the  Integrated  Programme  in  favour  of  SMEs  and  the 
Multiannual  SME  Programme.  The  synoptic  table  on the next  page  sets  out  the  various 
Community actions in favour of SMEs. 

Commission  White  Paper on Growth,  Competitiveness  and  Employment,  p. 92. 
See Footnote  1 above. 
See Footnote  1  above, section  1, p.2 and  Annex  I. 

h 

Madrid  priorities 

1.  Administrative 
simplification 

2.  Information 

Concerted  actions  with  M e m b er  States 
(exchange  of  best  practices) 
- Committee  on  improving and simplifying  the 

business  environment 

TABLE  I : COMMUNITY'S ACTIONS IN FAVOUR OF  S M ES 
Actions  under  other  Community  policies 
of  interest  to  SMEs  (*) 
- Guidelines for regulatory  policy 
- Simple VAT definitive  system 

- Follow-up  Single  Report on  Employment (non 
wage  labour costs, flexible  & simpler  labour 
regulations) 
- Concerted  actions on business support  measures 

and stimulating  demand 

Community  networks such as EC-BIC, Craft  Focal 
Points, Innovation  Relay Centres,  Multimedia 
Information  Demonstration  and Support Network, 
EURES, Rural Carrefours,  European  Crossborder 
Consumer Information  Centres... 
ESF (Community  Support  Frameworks) 
ADAPT (ECU  1.57  billion)) 
EMPLOYMENT NOW(460 MECU) 
LEONARDO (620 MECU) 
4th R&TD framework  (12,3 billion ECU  including 
700 MECU specific  SME) 
INFO 2000 
ERDF 

LIFE : 450 MECU  (96-99) 
Environment & Growth  Initiative 

Competition  policy (including State Aid) 
Cross-border public  procurement 
Cross-border economic areas 
JOP (CEEC+CIS 50 MECU 96-99); ECIP (250 
MECU  95-99), MED INVEST (no budget  approved 
for 96); AL INVEST(41 MECU 95-2000); ASIA 
INVEST (to be  defined) 

- Access to structural  funds  (ERDF, ESF) 
- Community  Initiative for  SMEs (ECU  1 billion) 
- EIB global loans for  SMEs 
- EIF loan  guarantees 
- Follow-up Communication  on SME tax  treatment. 

Complementary  actions 
(Multiannual  SME  P r o g r a m m e) 
* Business  impact assessment system 
- Cost/benefit  analyses 
- Transfer  of businesses 

- EICs as first-stop-shops for other Community 
networks 

- SME pilots (management  training) 
- actions for promoting business culture 
- Women & young  entrepreneurs 

- SME pilots (e.g.NTBFs, COMMERCE 2000) 

- EIC information  on  environment 
- impact environmental  legislation  on SMEs 
- craft:  environmental  management 
-  Partner search networks (BC-Net/ BRE) 
- Direct partnerships (Europartenariat - Interprise) 
-  Subcontracting 
- SME pilots -  internationalisation 
- Actions for craft  & small  enterprises 
- Actions for commerce & distribution 
- Legal environment (retention  of title, dispute 

settlement,  legal structures) 

- Late  payment 
- Access to loan financing  (e.g. Round  Table) 
-  EASDAQ 
- Factoring & Credit  insurance 
.- NTBF pilot 
- Consultation  of businesses 
- Statistics & SME Observatory 
-  Promotion 

1 

Training 

- Follow-up  Single Report on employment  (training 

in SMEs) 

- Follow-up  White Paper on education  (business 

culture and  entrepreneurship) 

- Follow-up Green  Paper on  innovation 
- Information  Society Forum  and  G7-pilots 

- R & TD 
-  Innovation 
-Information 

Society 
Environment 

3.Europeanisation 

and 
Internationalisation 

- Concerted  actions on business support  measures 

and stimulating  demand 

- Concerted  actions on business support  measures 

4.  Financial 

environment 

5. Consultation  and 
Policy  making 

(*) For more details see Report on the co-ordination  of activities  in favour  of SMEs and the Craft Sector, COM(95) 362 final of 8.9.1995. 

-h 

Ill 

1. The Integrated Programme in favour of SMEs and the Craft  Sector 
The  Integrated  Programme,  which  was  adopted  by  the  Commission  on  3  June  199410, 
sets  out  the  overall  framework  of  Community  Enterprise  Policy.  It  is  not  intended  to 
substitute  for  various actions taken  at a national  or Community  level, nor  to  interfere  in 
the  decision  making  process  of  the  different  actions.  Its  objective  is  to  pull  together 
various  initiatives into an overall  framework  to ensure their coherence and visibility, and 
to  propose  a  closer  partnership  between  all  parties  concerned  with  the  development  of 
SMEs  -  at  Community,  national  and  regional  levels  -  with  a  view  to  enhancing  the 
convergence and effectiveness  of these measures. 

The  Integrated  Programme  distinguishes  between  two  types  of  measures  which  are  set 
out in the following table: 

Integrated Programme fn favour of SMEs 

Concerted actions with Member States11 
measures  to  promote  mutual  consultation 
between  Member  States  and  joint  co 
ordination,  where  necessary,  concerning 
actions  in  favour  of  SMEs  and  the  Craft 
Sector in the fields  of: 
• 

improving  and  simplifying  the  SME 
business environment; 
stimulating  and 
measures for SMEs. 

improving 

support 

• 

Contributions from the European Union12 
measures for SMEs developed : 
• 

either  within  the  framework  of  the 
Community's  specific  SME  Policy  (i.e. 
the Multiannual SME Programme); 
or under the  other  Community  policies, 
for  instance,  international  co-operation 
programmes;  EIB  and  EIF  instruments; 
Structural  Funds  Programmes,  e.g. 
Community initiative for SMEs 

• 

In  the  context  of  the  Integrated  Programme  the  Commission  will  put  forward  new 
proposals  in  favour  of  SMEs,  in  particular  a  loan  guarantee  instrument  with  a  high 
leverage effect  on growth and employment. 

The  Integrated  Programme  predominantly  focuses  on  enterprises  within  the  European 
Union. However, in view of the Commission's commitment to gradually  open most of the 
Union's activities to SMEs from  associated countries, a number of actions outlined in this 
Third  Multiannual  Programme  (e.g.  partnership  actions)  could  be  made  accessible  to 
SMEs  from  these  countries  mainly  by using  funds  from  other  EU  programmes,  notably 
PHARE, TACIS, JOP, MED-INVEST, AL-INVEST and ASIA-INVEST. 

2. The Multiannual  Programme  for  SMEs 

The  Multiannual  SME Programme  fits  into the framework of the  Integrated  Programme 
as an important  part of the EU contribution. It provides the legal and  budgetary  basis  for 
the  Community's  specific  SME  Policy  actions.  The  current  Multiannual  Programme 
expires  on  31  December  1996.13  The  Third  Multiannual  Programme  will  cover  the 
period  1997-2000.  This  Proposal  is  unanimously  welcomed  and  supported  by  the 
European  business  organisations  representing  SMEs,14  which  were  consulted  by  the 
Commission on 20 February  1996. 

10  Integrated  Programme in favour  of SMEs and the Craft  Sector, COM(94) 207 final  of 3.6.1994. 
11  See Article  130 § 2 of the Treaty. 
12  i.e.  contributions  through  policies  and  activities  the  Community  pursues  in  the  framework  of  the 
in  Member  States 

Treaty,  as  well  as  through  specific  measures  in  support  of  action  taken 
(Article  130 § 3 of the Treaty). 

13  Council  Decision 93/379/EEC of  14.6.1993, OJN°L  161 of 2.7.1993, p. 68. 
14  CCACC,  CECOP,  CEDI,  EMSU,  EUROCHAMBRES,  EUROCOMMERCE,  EUROPMI,  UEAPME, 

UNICE and  YES for  Europe. 

G 

IV 
The added  value  and  complementary  nature of the Multiannual  Programme  are  evidenced 
in particular  by  the  following  : 

Added value of the Multiannual  Programme 

the  Multiannual  Programme  aims  at a  number  of  specific  objectives  which  are  not 
covered  by  other  Community  policies  (e.g.  the  improvement  of  the  SME  business 
environment  and  the  Europeanisation  of  business  strategies  of  SMEs  through  the 
provision  of  information  and  support  services  providing  transnational  co-operation 
opportunities); 
the Multiannual  Programme also plays a useful  role by testing innovative methods of 
support.  Such  actions  will  for  instance  complement  the activities  undertaken  under 
the Community research, innovation and regional  policies. The actions proposed will 
help to  increase the awareness and effectiveness  of,  the other Community policies of 
interest to SMEs; 
it has a horizontal  scope (i.e. it applies  irrespective of economic sectors) and  covers 
the population of SMEs within the entire European Union; 
a  series of measures and  methodologies within the Multiannual Programme (eTg. the 
networking  of  intermediaries  with  an  important  leverage  effect)  are  developed  in 
close  co-operation  and  co-ordination  with  other  Community  policies,  in  particular 
Structural  Funds,  Innovation,  Research  and  international  co-operation 
in  order  to 
maximise their effect  for enterprises. 

_ 

Compared  to  the  Integrated  Programme  the  actions  in  the  Multiannual  Programme  are 
complementary  to  other  actions  in  favour  of  SMEs,  thus  avoiding  duplication.  On  the 
contrary,  the  Multiannual  Programme  stresses  complementarities  and  synergies  with 
other  Community  policies  and Member  State actions  in favour  of  SMEs. 

Compared  to  the  Second  Multiannual  Programme,  the  Third  Multiannual  Programme 
will  ensure  the  continuity  of the  Community's  Enterprise  Policy,  whilst  at  the  same  time 
strengthening  a  number  of  existing  actions  and  introducing  a  series  of  new  initiatives  in 
the  key  areas  identified  in  the  Commission's  recent  SME  Policy  Paper.15  The  new 
elements  are highlighted  in the following  box: 

New elements in the Third Multiannual  Programme 

in  particular  by 

facilitating  access to all Community Programmes of interest to SMEs by  developing 
the Euro-Info-Centres  (EICs) as  "first-stop-shops"; 
the  efforts  on  administrative  simplification, 
strengthening 
introducing the cost-benefit aspect into  the business impact assessment  system; 
ensuring  better  involvement  of  SME  Organisations  in  the  decision-formation 
process; 
encouraging  and  supporting  SMEs to trade  in  international  markets,  in  particular  by 
improved  networking facilities  and improving access to market  information; 
identifying  novel  ways to better promote  the technological  adjustment  of  SMEs and 
their access to entrepreneurial  training; 
developing  concrete  actions  for  craft  and  small  enterprises  taking  into  account  their 
specific  characteristics; 
improving  the  financial  environment  for  SMEs  (access  to  loans, secondary  markets 
for SMEs, late payment, factoring and credit insurance); 
encouraging  women  and  young  entrepreneurs  and  businesses  owned  by  minority 
groups; 
encouraging a new spirit of entrepreneurship; 
integrating the environment and sustainable development  into the Community's 
Enterprise  Policy (Art.  130r of the Treaty). 

15 See Footnote  1  above. 

1-

V 
The  Third  Multiannual  Programme  is  presented  alongside  an  external  evaluation  report 
on  the  current  Multiannual  Programme  (1993-1996).16  This  independent  evaluation 
report has made a number of suggestions which are being  implemented  or commented  in 
the Explanatory  Memorandum, while a separate Commission  Communication  completes 
this analysis.  The  following  table highlights  some  major  recommendations  of the  report 
which have been taken into account in this Proposal: 

Major  recommendations from  the external evaluation  report 

strengthening  co-ordination  efforts  to  ensure  the  consideration  of  SMEs  into  the 
various Community policies, and reinforcing  the effectiveness  of the evaluation of 
the impact of legislative proposals on SMEs; 
qualitative improvement in the EIC network and promoting a greater co-ordination 
between Community networks, including alternative ways of organisation; 
reinforcing  the partnership  programmes  through  improved  follow-up  services and 
assistance to the participating enterprises; 
continuing  the  "laboratory  approach1'  of  working  with  pilot  projects  to  "test  by 
doing" innovative measures for SMEs in key areas; 
strengthening the promotional efforts  for actions of interest to SMEs; 
greater  use  of  information  technologies  in the  networks  and  the  dissemination  of 
information. 

Participation  by  SME representative  bodies in devising policy  actions  must  be sought  in 
order  to  increase  their  efficiency.  In  line  with  the  Madrid  Report  on  SMEs,  the 
Commission  will  improve  "the  consultation  of  SME  organisations  when  preparing 
policies of relevance to them, and encourage their full  involvement"  both  at  national  and 
Community level.17 

E.  THE  MULTIANNUAL SME  PROGRAMME  AS  PART  OF  THE  EUROPEAN  CONFIDENCE 

PACT FOR EMPLOYMENT 

This  Third  Multiannual  SME  Programme  is  the  cornerstone  of  the  Community's  SME 
Policy.  As  such  it  forms  an  integral  part  of  the  Commission's  Confidence  Pact  on 
Employment.  This Programme provides for concrete actions producing  rapid  effects  and 
which  help  to  exploit  SMEs'  full  potential  for  job  creation,  in  particular  by  helping  to 
increase  the  number  of  SMEs  participating  in  the  Internal  Market  and  promote  their 
internationalisation.  When  consistently  implemented,  the  entire  range  of  actions  of  this 
Third  Multiannual  SME Programme  will produce  a significant  leverage  and  mass  effect 
throughout the Union. 

16  See the Commission  Communication  on the External  Evaluation  Report  concerning  the  implementation 

of Council  Decision  93/379/EEC  of  14 June  1993, OJ N° L 161 of 2.7.1993, p. 68. 

17  See Footnote  1  above,  p. 17. 

? 

PROPOSAL FOR A COUNCIL DECISION 

on a Third Multiannual Programme 

for  Small and Medium-sized Enterprises (SMEs) 

in the European Union (1997 - 2000) 

(presented by the Commission) 

u:\polnev\program\prea-en 1 +prp-en45 

°t 

1HBRD MULTIANNUAL PROGRAMME FOR SMEs 

EXPLANATORY MEMORANDUM 

TABDE OF ODNTENTS 

L  S œ PE OF Tlffi PROGRAMME 

IL PRIORTIY OBJECTIVES AND PROPOSED ACTIONS 

A.  SIMPLIFY AND IMPROVE THE ADMMMT^TTVEANDR 

A. 1.  Ensure consideration of the interests of SMEs in the various Community 

initiatives and policies 

A.2.  Simplify  and improve Community  legislation 

A3.  Increase  transparency  and  the  spread  of  best  practices  on  simplifying  and 

improving the administrative and regulatory environment 

A.4.  Improve framework for transnational operations of SMEs 

B. 

IMPROVE  THE FINANCIAL  ENVIRONMENT  FOR ENTERPRISES 

B.l. Improve access to loan financing 

B.2. Intensify  efforts  to reduce late payment problems 

B.3. Facilitate the development of specific  financial  instruments 

B.4.  Stimulate the development of capital markets for fast-growing  SMEs 

C.  HHJSMBTORJRGFEANSE 

BETTER  INFORMATION SERVICES 

C.l.  Develop information  services 

C.2. Improve the promotion of SME Policy actions 

C.3. Promote co-operation through business search networks 

C.4. Promote direct contacts through partnership programmes 

C.5. Develop subcontracting partnerships 

C.6. Promote access to new markets and internationalisation of SMEs 

s? ^*? 

P.  FNHANŒSMROM^TTIVFNr^ANDI^ 

TRAINING 

D. 1. Increase the innovative potential of SMEs 

D.2. Stimulate managerial training 

D.3. Adaptation to environmental requirements 

E.  PROMOTE ENTREPRENEURSHIP AND SUPPORT SPEQAL TARGET GROUPS 

E.l. Business culture and entrepreneurship 

E.2. Craft  and small enterprises 

E.3. Enterprises  in commerce and distributive trades 

E.4. Women and young entrepreneurs; enterprises owned by minorities 

m  POIICY DEVELOPMENT 

SECTION L  SCOPE 

This Third Multiannual Programme is the cornerstone of the Community's SME policy. 
It provides the basis for actions which aim at raising the awareness of significant number 
of  SMEs  to  the  challenges  of  a  business  strategy  which  increases  their  competitive 
position towards improving their share of transnational and international trade. A positive 
effect  of this would be to generate employment opportunities. 

In line with the analysis presented in the Commission's SME Policy Paper for the Madrid 
European Council1, the five following priority policy objectives are set out together with 
an outline of the actions which need to be taken at Community level : 

1.  Simplify  and improve the administrative and regulatory business environment; 

2. 

Improve the financial  environment for enterprises; 

3.  Help  SMEs  to  Européanise  and  internationalise  their  strategies,  in  particular 

through better information services; 

4.  Enhance SMEs' competitiveness and improve their access to research, innovation 

and training; 

5.  Promote entrepreneurship and support special target groups. 

The Third  Programme  is  focused  on  SMEs, irrespective  of their  sector,  legal  form  or 
location  within  the  European  Economic Area.2  Where proposed  measures  specifically 
relate to craft  and small businesses, a separate reference to this type of enterprises will 
be made, as well as for commerce and distribution. 

While supporting the Community's cohesion policy3, the actions in favour  of SMEs set 
out  in the Multiannual  Programme are not limited to enterprises  established  in regions 
eligible  for  support  under  the  Community's  Regional  Policy.  In  this  context  the 
complementarity between the Multiannual Programme and the Community Initiative for 
SMEs  should  be  highlighted  as  factor  stimulating  the  economic  development  of  the 
Union, including job creation at local level. 

The current Multiannual Programme expires on 31 December  1996.4  Therefore the new 
Programme  shall  enter  into  force  on  Ï  January  1997  and  cover  the  period  up  to  31 
December 2000. 

"SMEs: a dynamic source of employment, growth and competitiveness in the European Union", Report 
presented  by  the  Commission  to  the  Madrid  European  Council,  CSE(95)  2087. 
Commission  Recommendation  concerning  the definition  of  SMEs  (doc. C 96/261). 
First  Report  on  Economic  and  Social  Cohesion  established  under  Article  13 TEU,  p. 263. 
Council  Decision  93/379/EEC  of  14.6.1993, OJ N°  L  161 of 2.7.1993,  p. 68. 

"I 

SECTION DL  PRIORITY OBJECTIVES AND PROPOSED ACTIONS 

A  SIMPUFY  AND  IMPROVE  THE  ADMINISTRATIVE  AND  REGULATORY 

BUSINESS ENVIRONMENT 

A l.  ENSUREcn^gpER\Tiayqn^ 

AND POLICIES 

A key objective  of the Community's  SME Policy is to ensure that the SME dimension 
is integrated into the conception and implementation of Community actions and policies. 
The  Commission  will  step  up  its  efforts  in  this  area  While  efforts  to  simplify  and 
improve Community  legislation will  contribute to achieve this objective,  a  greater co 
ordination of Community actions and policies in favour of SMEs should also be promoted 
to enable SMEs to fully  participate in all Community actions and programmes. 

For instance, in the area of the Structural Funds programmes SMEs are still not benefiting 
sufficiently  relative to their share of economic activity and employment growth potential. 
This  approach  should  also  apply  to  R&TD,  innovation,  employment  and  vocational 
training, energy efficiency programmes, environment, international co-operation, EIB and 
EIF instruments. The first results of this co-ordination effort  are set out in the Integrated 
Programme in favour of SMEs and the Craft Sector6 and in a recent co-ordination report.7 
Concrete action under the SME Multiannual Programme will include a Recommendation 
to Member  States  on ways to  increase the share of  SMEs in Community policies  and 
programmes. 

Recognising the need to accelerate work on the simplification of Single Market legislation 
particularly affecting  SMEs a proposal could be elaborated to set up small "SLIM' teams 
(Simpler Legislation for the Internal Market). 

A 2.  SlMPUFY AND IMPROVE COMMUNITY LEGISLATION 

SMEs face an increasingly complex legal, fiscal  and administrative environment. While 
the  cost  of  non-regulation  has  never  been  measured,  the  total  annual  cost  of 
administrative burdens on all enterprises in Europe has been roughly estimated to be 150 
to 250 billion ECU.8 In particular the costs of the formalities for setting up a business are 
a  cause  for  concern.9  These  costs  are  predominantly  attributable  to  requirements  of 
Member States. 

In  line with  the  Commission  report  to  the Madrid  European  Council  on  "Better  Law 
Making"10 the Commission will improve its own contribution towards reducing red tape 
and improving Community legislation which may affect  enterprises, in particular SMEs. 
This objective  requires  action to  avoid and reduce unnecessary  administrative  burdens 
and  compliance  costs  in  existing  and  new  legislation  which  hinder  the  creation  and 
development of enterprises. 

:> 
6 
7 

8 

9 

10 

Annual Report of the Court of Auditors (1994), OJ N° C 303 of  14.11.1995, p. 140. 
COM(94) 207 final. 
COM(95) 362 final  of 8.9.1995. 
See Footnote  1  above, p.4. 
See comparative table on p.36 of the Green Paper on innovation, COM(95) 688 final of 20.12.1995. 
"Better law making", COM(95) 580. 

To achieve this objective, the Commission has recently adopted guidelines on regulatory 
policy.11  These  guidelines  stress  the  need  to  ensure  the  widest  possible  external 
consultation and also foresee a new approach aimed at rationalising and modernising the 
impact  analyses  of  which  the  Business  Impact  Assessment  System  is  of  particular 
importance for SMEs. 

In view of the need for SMEs to be consulted on Commission proposals which are likely 
to have a significant  impact  on them, the Commission  will  improve the quality  of the 
business impact assessments by ensuring a greater involvement of SMEs at the  drafting 
stage  of  Community  legislation  or  programmes,  and  by  implementing  a  pragmatic 
methodology  for the evaluation of the impact of legislative proposals  including the use 
of cost/benefit  analyses wherever this is deemed appropriate.  Depending on the nature 
and complexity of the proposals, the evaluation will be based on: 

•  desk  research  where  this  is  sufficient  to  identify  the  compliance  costs  and 

administrative burdens; 

•  using  a  representative  number  of  firms  selected  from  a  pool  of  volunteering 
enterprises,  in  co-operation  with  SME  organisations,  who  would  provide  detailed 
information  about the implications of legislative proposals as above; 

•  œmmissioning comprehensive cost/benefit analyses for the most complex proposals 

impacting on many business sectors. 

The tasks of carrying out the desk research or conducting the cost/benefit  analyses will 
be  entrusted  to  the  Commission  services  responsible  for  the respective  proposals.  For 
carrying out enquiries limited to a representative number of volunteering enterprises, DG 
XXIII will in co-operation with other Commission services and SME organisations, set 
up  an  agreement  with  a  network  of  SME research  institutes  to  ensure  the  necessary 
degree of homogeneity and neutrality of the results. 

A.3. 

INO?EASE TRANSPARENCY AND THE SPREAD OFBESTI^CTC^ONSIMPIIFYINGAND 
IMPROVING THE ADMINISTRATIVE AND REGULATORY  ENVIRONMENT 

a  monitoring of administrative  simplification 

In order to raise the quality and scope of administrative simplification efforts  both at EU 
and  Member  State  level,  there  is  a  need  for  a  greater  transparency  and  spread  of 
information  on  new  initiatives  in  this field. Various  Member  States  expressed  their 
interest in this type of information, which should also benefit the Community institutions. 
The Commission will therefore monitor the progress achieved under the new strategy of 
aclministrative  simplification13  and  exchange  of  best  practice  between  Member  States 
resulting in Recommendations as appropriate.14 This will include the results of substantial 
surveys conducted by the Euro-Info-Centres (EICs). 

Guidelines on  regulatory policy, SEC(95) 2255 of  16.1.1996. 
This method was considered as particularly innovative in the external evaluation report (see page 7). 
A  similar approacli  has been  suggested recently by a  1996 Report  from  the Committee on business 
creation  set up by the Danish Ministry for  Industry (see Betaenkning N°  1304 page 210). 
See Footnote  1 above, Section  V.l. 
See the  Integrated  Programme in  favour  of  SMEs and the Craft  Sector. 

12 

14 

Ah 

h. transfer of businesses 

At  least 300,000 jobs a year are lost due to unsuccessful  transfers  of businesses  in the 
EU.15  The  Commission  will  encourage  and  support  initiatives  aiming  at  raising  the 
awareness of business organisations and other interested parties on the issue of  transfer 
of businesses. Based on an assessment of the implementation of the Recommendation on 
transfer  of  businesses16,  the  Commission  will  encourage  new  initiatives  and  promote 
appropriate actions including a specific concerted action on this subject. 

c retention of tide 

Retention of title - a legal mechanism to delay the transfer  of ownership of goods until 
the purchase price has been paid  in full  - is one of the most appropriate measures  for 
facilitating commercial transactions. Such a legal tool should be available to all economic 
actors. However, there are a number of disparities which hamper the recourse to this type 
of instrument. The Commission will consider on the basis of a consultation document17 
whether or not a Commission Recommendation  in this area would be useful. 

A.4. 

IMPROVE FRAMEWORK FOR TRANSNATIONAL OPERATIONS OF SMES 

a.  settlement procedures for transnational disputes between enteiprises 

Disputes arising from transnational operations are often difficult  to solve, in particular in 
view of the costly, complex and lengthy procedures. The lack of easy access to justice 
for operations in other Member States thus discourages enterprises, in particular SMEs, 
from internationalising. Most of the problems lie with Member States to the extent that 
the  organisation  of  the judiciary  is  concerned.18  The  Commission  will  encourage  the 
development of alternative dispute resolution as a means to solve disputes arising from 
transnational  operations  of  enterprises,  in  particular  SMEs.  This  will  include  the 
promotion  of  instruments  such  as  mediation,  simplified  arbitration  and  conciliation 
procedures. 

b.  promote appropriate legal structures 

The  existing  legal  structures  for  transnational  co-operation  are  still  incomplete  and 
insufficiently  known by SMEs. Enterprise Policy should therefore promote existing legal 
structures and support the creation of new instruments which are more adapted to SMEs' 
needs. 

The  European  Economic Interest  Grouping (EEIG) is  the  first  legal  instrument  of 
Community law for transnational co-operation. However, this instrument is not yet widely 
used by SMEs and there is a lack of practical  information  about the experience of this 
instrument.  To  promote  the  use  of  EEIGs  for  transnational  co-operation,  the  REGIE 
Initiative  (i.e.  Promotion  of  the  EEIG  in  the  European  Union)  should  be  fully 
implemented.  This  requires  developing  the  REGIE  database  and  raising  awareness  of 

See footnote  1  above, Section III.A. 

16  Commission  Recommendation  on the transfer  of SMEs, OJ N° L 385/14 and C 400/1 of 31.12.94. 
A  similar  consultation  document  was  prepared  on  the  transfer  of  businesses  (  OJ  N°C  204  of 
23.7.1994, p.l). 

18  Lengthy delays  in taking action against  Member States  in which there are Single Market obstacles 
mean the difference between survival or failure for some SMEs and so the Commission will speed up 
and make more effective  its own Single Market dispute procedure. 

/r 

SMEs in order to provide practical information and to identify possible improvements of 
existing legislation where appropriate. 

As highlighted  in the Molitor Report19 and the second Ciampi Report20, there is a need 
to establish other legal instruments suitable for SMEs doing business in different  Member 
States. The adoption by the Council of the Statute for a European Company will help to 
provide SMEs with an appropriate legal instrument for their transnational operations. In 
the meantime, the Commission will promote the development of simplified  legal statutes 
for closely held limited liability companies.21 

B.  IMPROVE THE FINANOL\L EWmONMEOT PC^ 

The Commission strongly believes that the move towards Economic and Monetary Union 
produces positive effects  on businesses, in particular in the field of increased monetary 
stability. The achievement  of the Treaty objectives concerning public finance will have 
both  quantitative  (reduction  of  "crowding-out")  and  price  effects  (interest "rates).22 
However,  European  SMEs  are  still  undercapitalised,  inter  alia  due  to  a  fiscal 
discrimination against risk capital, have problems accessing bank loans at reasonable rates 
and fast-growing  companies are hampered by the absence of European capital  markets 
for  SMEs.23 The Integrated Programme in favour  of SMEs provides the framework  for 
an array of measures to improve the financial environment for enterprises, including the 
exchange of best practice between Member States and the strengthening of Community 
actions  in  this  field.  This  Third  Multiannual  Programme  provides  for  complementary 
measures which do not involve any direct financial support for SMEs but rather focus on 
improving  the financial environment  through the  elimination  of  constraints  and  better 
access  for  SMEs  to  financial  instruments.  All  measures  involving  State  aid  to 
undertakings  in any form whatsoever have to comply or be coherent with the principles 
set out  in Articles  92 to  94 of the Treaty  and all relevant  secondary  legislation.  More 
specifically,  the Multiannual  Programme proposes measures in the following areas: 

B.l. 

IMPROVE ACCESS TO LOAN FINANCING 

Bank lending constitutes the dominant form  of external  funding  for  SMEs, despite the 
widely acknowledged fact that many of these firms experience substantial difficulties  in 
obtaining loans at reasonable cost for their expansion and investments compared to larger 
enterprises.  This  is  a  problem  of  particular  relevance  for  small  enterprises,  as  banks 
consider that the credit risks applying to this category of companies are higher than those 
applying  to  larger  ones,  and  as  small  firms  are  typically  unable  to  offer  adequate 
collaterals. SMEs typically pay an interest rate two to five percentage points higher than 
large enterprises.24 

Report  of  the  Group  of  Independent  Experts  on  Legislative  and  Administrative  Simplification, 
COM(95) 288 final  of 21.06.1995, p.83. 
"Enhancing  European  Competitiveness",  Second  Report from  the Competitiveness  Advisory  Group, 
December  1995, p.8. 

20 

21  Commission  Comments  on  the  Report  of  the  Group  of  Independent  Experts  on  Legislative  and 
Administrative Simplification,  COM(95) 596. See also the amended Proposal for a Council  Regulation 
on the Statute for a European Co-operative Society (SYN 388 of 6.07.1993, currently under discussion 
in the Council). 

22  For  instance,  it  is estimated  that  a reduction  of  1 % of  public  deficits  within  the  European  Union 

generates  an annual  amount  of 65 billion  ECU for  private sector  financing. 

23  See Footnote  1  above,  Section  III.D. 

See Footnote  1  Above, p.7. 

U 

Loan guarantees are extremely helpful  in overcoming these obstacles as they reduce credit 
risks  and also provide compensation for lack of collateral. The European Investment Fund 
(EIF), which  issues  loan guarantees  in favour  of SMEs and Trans-European Networks, 
has considerable potential to help enterprises  in overcoming these obstacles.  Scope for 
co-operation exists also between budgetary support instruments and the EIF. The "Growth 
and Environment" pilot project constitutes a clear and promising example: the Community 
loan  guarantee  is  extended  at  no  cost  to  the  borrowing  enterprise  (for  investments 
producing environmental benefits), while the cost of the guarantee premiums is borne by 
the  Community  budget.  The  Commission  will  submit  proposals  for  an  SME  loan 
guarantee instrument with a high  leverage effect  on growth and employment. 

The  Commission  will  continue  its  support  for  the  development  of  mutual  guarantee 
schemes,  in particular  through  co-operation  with the European  Association  of Mutual 
Guarantee Schemes. 

The Commission will further  stimulate a wide discussion within the banking community 
on ways to improve SME financing. Concrete actions will include support for the Round 
Table of Bankers and SMEs, which examines innovative practices in the field of better 
access for SMEs to financing. Particular attention will be paid to better access to  finance 
for women entrepreneurs and improving the financial environment of SMEs in the  field 
of  commerce  and  distribution.  The  Commission  will  encourage  banks  and  SMEs  to 
implement the Round Table recommendations as widely as possible. 

B.2. 

INTENSIFY EFFORTS TO REDUCE LATE PAYMENT PROBLEMS 

The  Commission  recognises  the  importance  to  SMEs  of  reducing  late payment.  This 
implies  efforts from the public authorities  including the Commission  itself. It believes 
that the current economic climate warrants an acceleration of the evaluation process set 
out in its  1995 Recommendation on late payment.25 The Commission will bring forward 
further  proposals  in  1997 and will  support actions organised by business  organisations 
which  aim  at  improving  the  financial  management  capabilities  through  information, 
training and other measures (e.g. cash-flow  management software  for SMEs). 

B.3.  FAOUTATE THE  DEVELOPMENT OF SPECIFIC FINANCIAL INSTRUMENTS 

The  Round  Table  of  Bankers  and  SMEs  highlighted  the  importance  of  factoring  and 
credit  insurance  in helping to meet  SMEs' need for  working capital  and reducing their 
problems  linked to  late payment.  The take-up of these instruments varies  considerably 
between  Member  States.  The  Commission  will  therefore  examine  the  reasons  which 
hamper the development of these instruments in a number of Member States and prepare 
a consultation paper with proposals, possibly in the form of recommendations, for making 
these financial  instruments  in the Single Market function  better. 

B.4.  STIMULATE THE DEVELOPMENT OF CAPrrAL MARKETS FOR FAST-GROVWNG SMES 

A major  weakness  in the present  European financial  system is the lack of liquidity and 
the  absence  of  European  capital  markets  for  high  growth  SMEs.26  This  particularly 
hampers high technology companies which in turn discourages innovation and  risk-taking. 
Compared to the US annual figure of 400 companies, in Europe only  10 to 20 % of this 

25  OJ N°  L  127 of  10.6.1995, p.  19 and  OJ N° C  144,  10.6.1995, p. 3. 
26 

See Footnote  1  above, p.8. 

/> 

number  tap secondary  markets  and  many  choose a US NASDAQ listing  instead  To 
encourage  the  creation  and  the  smooth  operation  of  such  markets  in  Europe  the 
Commission has urged Member States to remove all remaining legal, regulatory,  fiscal 
and  other  barriers  by  the  end  of  1996.27 On the basis  of  a  forthcoming  report to  the 
Council the Commission will propose appropriate measures to encourage the growth of 
these important  financial  facilities,  including EASDAQ.28 

C  HF1P  SMES  TO  EUROPEANISE  AND  INTERNATTOVALLSE TOFIR 
STRATEGIES.  IN  PARTICULAR  THROUGH  BETTER  INFORMATION 
SERVICES 

The employment and growth potential of SMEs will not be fully  exploited without their 
rapid integration into the Single Market. There are only about 460.000 enterprises which 
engage in transnational activities. In view of the relative ease with which US enterprises 
engage in inter-state trade,29 a considerably  higher number of European enterprises, in 
particular  SMEs,  should be encouraged to participate  in transnational  trade. While the 
achievement  of  a  more  ambitious  target  largely  depends  on  the  full  co-operation  of 
intermediaries  and Member States, the specific  and complementary actions provided in 
this Programme  should help to  facilitate  the access of a much larger of enterprises, in 
particular SMEs, to the Single Market and to help them to adjust to the new requirements 
of international  competitiveness. 

The first task is to influence  SMEs' strategies in the sense of a rapid integration into the 
Single Market. To achieve this aim, it is necessary to provide SMEs with the appropriate 
instruments  for  the  implementation  of  such  strategies.  Information  and  business 
partnerships constitute main instruments for SMEs to reach out to wider markets within 
the  Single  Market  and  beyond.  Given  the  wide  variety  of  situations  faced  by  SMEs 
additional measures are however required in particular for specific target groups. 

The Commission will follow the line set out in its report on the future operation of the 
information  and  co-operation  netwoiks.30  This  report  sets  out  a  number  of  possible 
improvements  in the management  of these networks,  but stops short of a  fundamental 
change in the methods chosen by the Commission. It does not recommend in particular 
merging  the  different  networks  into  one,  nor  abandoning  the  formula  whereby  the 
Commission  works  in  co-operation  with  a  large  number  of  decentralised  host 
organisations and limits itself to providing an intermediate service31. 

The reasons why the external evaluation report of the Second Multiannual Programme 
proposes such a merger for all enterprise policy networks are shared by the Commission 
only to the  extent  that  a unique  interface  with the final customer would have obvious 
advantages only from the point of view of transparency and simplicity in all promotional 
activities. It would not bring improvements in terms of efficiency,  cost effectiveness  and 

•j'y 

27 

See Footnote  1  above, Section V, p. 18. 

' 

28  See Commission Communication on the feasibility of the creation of a European Capital Market for 

smaller entrepreneurially  managed growing companies, COM (95) 498 final  of 25.10.1995. 
29  No figures exist concerning the US firms engaged  in inter-state trade. However, the fact that about 
400.000 of the  16 million US enterprises are engaged in international trade, suggests that the number 
of firms participating  in  inter-state  trade  must  be  considerably  higher  given  the  relatively  higher 
concentration  of US firms on domestic markets. 

30  This Commission report was mandated by Article 5 of Council Decision 93/379/EEC of 14 June 1993. 
3 '  See page 20 of the report. 
32  This external  report was mandated  by Article 5 of Council  Decision 93/379/EEC of  14 June 1993. 

i  << 

quality control since the various services rendered - as set out in the evaluation report -
will all need to be continued in co-operation with the different  specialised intermediaries 
involved and the various roles even more clearly defined if quality of the service is to be 
enhanced. The idea of a full  operational control of the EIC network by the Commission 
(as advanced in the external evaluation report) would make the merger into one network 
even more difficult  to achieve. In the view of the Commission it would not only require 
a considerable investment, but entail considerable additional running costs since the cost 
of the central unit would remain unaltered, while the size and the human resources of a 
reduced number of EICs would have to be considerably  greater in terms of knowledge 
and full-time  equivalent per EIC. 

Therefore,  the  Commission  comes  to  the  conclusion  that  it  would  be  a  mistake  to 
discontinue  the  strong  and  fruitful  partnership  with  a  great  number  of  different 
organisations, the direct and indirect contribution of which is of immense political value 
and should rather be developed by integrating more completely the EICs into the .overall 
structure of the host organisations. 

This does not preclude the Commission from attempting to choose, in agreement with its 
various partner organisations, a unique identification under uhich the different  networks 
operate. In this case the EIC network will have to function  as "First Stop Shop" in order 
to simplify  and facilitate the access of the final customer to the various services  offered 
by the Community networks. 

While not advocating full operational and financial control of the EIC network (inter alia 
in view of the cost involved), the Commission would see an advantage, in order fully to 
reap  the  benefits  of  the  stimulation  method  it  has  chosen,  in  offering  an  additional 
financial contribution  to  those  EICs  which  commit  themselves  to  a  particularly  high 
quality  and  targeted  information  services  with  an  obvious  potential  for  transnational 
strategies. 

The  rapid  development  of  information  technologies  and  services  (e.g.,  Internet)  also 
justifies the provision of financial resources, partly in the form of a one shot investment, 
in  order  to  intensify  the  links between  all  different  intermediaries  co-operating  in the 
framework of the different Community networks, but also in order to enlarge the interface 
with  the  final  customer.  In  formulating  the  specifications  for  a  new  VANS,33  the 
Commission will take into account the need for  easy access to and from other existing 
networks  widely  used  by  SMEs;  where  confidentiality  is  a  decisive  element  of  the 
services  offered  (in  particular  BC-NET),  the  Commission  will  upgrade  the  existing 
information  technology to bring it into line with this state of the art. 

The Commission will continue its quality policy by means of a sharper definition  of the 
services  on  offer  in the different  networks  as already  mentioned, as well  as through a 
greater assurance of full professionalism, which might result in a reduction of the overlap 
between the three networks operating under the Cornmunity SME policy. 

- 31 

Value  Added  Network  and  Services  (VANS),  including  for  instance  Erinail  and  specialised 
conferences. 

Cl.  DEVELOP INFORMATION  SERVICES ŒiJR(>liNnFO-CEivrrRKs  AS  'T^ST-STOB-SHOPS^ 

Over and  above the managerial  improvements  discussed  in the Communication  on  the 
future operation of the information and co-operation networks, the Commission proposes 
to adopt the following  orientations for the EIC network, which will also apply to Euro-
Info-Correspondence  Centres (EICCs) where appropriate: 

a  EICs as "Flist Stop Shops" 

The new  orientations  outlined  above which,  correspond  to the  demands  expressed  by 
SMEs  and  highlighted  in  the  Commission's  report  for  Madrid,  will  put  into  play  a 
growing number of operators working in synergy with the EIC network. Moreover, the 
latter  is  only  one  of  the  various  networks  of  relevance  to  SMEs  operated  by  the 
Commission  within  and  outside  the framework of  its  enterprise  policy.  There  is  an 
obvious need for greater transparency of the numerous services on offer. However, rather 
than artificially reducing the number of such services, the Commission proposes a double 
approach: a single identification  for  all Community networks of relevance for  SMEs34, 
and  a  single  interface  with  the  final  customer  in  order  to  direct  each  request  to  the 
relevant Community network or service provider. The latter role would logically have to 
be  assumed  by  the  EICs  given  their  task  of  providing  comprehensive  information  to 
business. Some of them might have to gear up their capabilities in order to fulfil  this new 
task. Inter alia this will require efforts  to identify,  and develop regular contacts with, the 
representatives of other Community networks, to build bridges, including through VANS, 
in  order  to  facilitate  dialogue,  and  to  launch joint  activities  aimed  at  enhancing  the 
visibility of the Community networks. 

The chart set out in the following  page illustrates how the EICs will  function  as  first-
stop-shops. Table II summarises the main Community networks. 

h  composition of the EICs 

The present composition  of the network is the result of an historical  development.  The 
evaluator has questioned the rationality of the composition of the network and suggested 
an  attempt  to  obtain  a  better  representation  of  SMEs'  most  trusted  business  advisors, 
while keeping in mind the need for a stable financial commitment on their part and the 
requirement  for  geographical  cohesion.  The Commission  will  therefore  publish  a  new 
call for candidatures, which will be open to existing and new organisations,  in order to 
identify  the  ones  most  able  to  host  a  first  stop  shop.  The  selection  criteria  and  the 
evaluation of the outcome of the call for candidatures will be discussed with the Member 
States. The number  of  EICs participating  in the network  should  not  be  increased  as a 
consequence of this consultation. 

c.  enlarged and reinforced information task of the EICs 

Better infonnation  for  enterprises  is a priority objective  for the Community's  Enterprise 
Policy, where the local  EIC network plàys a key role. Under this Programme the tasks 
of the EICs to provide infonnation will be enlarged and reinforced  in the following ways: 

EICs as first-stop-shops.  To cover the needs of enterprises  for a rapid response to their 
information  requests,  the  EICs will  help to direct them  to the appropriate  Community 

In combination with the distinctive  logos of each network. 

^ 

EICs  as  First-Stop-Shops 

National  &  Regional  Partners 

Community  Networks 

•  Public  A u t h o r i t i es 
•  EC  R e p r e s e n t a t i o ns  in  the  MS 
•  Representative  O r g a n i s a t i o ns 
•  Sectoral  O r g a n i s a t i o ns 

•  B u s i n e ss  S u p p o rt 

O r g a n i s a t i o ns  ( B u s i n e ss  Links) 

•  C h a m b e rs  of  C o m m e r ce 
•  D e v e l o p m e nt  A g e n c i es 
•  S t a n d a r d i s a t i on  Bodies 

E u r o p e an 

B u s i n e ss 

I n f o r m a t i on 

•Ë(ù;tflllMŒ^Œt^S 

229  EICs 

19  E I C Cs 

u 

Business  Service  Partners 
•  C o n s u l t a n ts 
•  L a w y e rs 
•  T r a i n i ng  O r g a n i s a t i o ns 

B a n ks 
A c c o u n t a n ts 
R e s e a r ch  C e n t r es 

General  Information 
Business  Cooperation 
•  BC-Nef 
•  BRE* 
•  Europartenarlat  & Interprise * 
Support  for  Innovative  SMEs 
•  s/c 
R&TD  and  Innovation 
• 
IRC * 
•  OPET* 
•  Craft 
Information  Society 
•  NAP • 
•  AGORA  * 
Training 
•  Leonardo 
Employment 
•  EURES 
Rural  Development 
•  Carrefours 

Other  Links 

Environment  (DG  XI) 
Public  Procurement  (DG  XV) 
Third  Countries 
Single  Currency  (DG  II) 
Health  and  Safety  at  Work  (DG V) 

Some  EICs  act  In  synergy  with  these  networks 

r^o. 

Name 

Euro-Info-Centres  (EIC) 
DG XXIII 
Business-Cooperation-Network  (BC-Net) 
DGXXni 

Bureau de Rapprochement  des Entreprises (BRE) 
DG XXIII 
KUROPARTKNAR1AT 
DG XXIII 

"TNTERTRISE" 
DG XXIII 
EC-Business Innovation-Centres (BIC) 
DGXVI 
Cratt Network ot  Focal Points 
EX} XII 

Innovation Relay Centres IRCs 
DGXIII 

TABLE U: MAIN COMMUNITY NETWORKS 

Number ol Membeis & geographical coverage 
'm  EU + KFlA 
20 correspondence centres  in CEEC, Med. countries 
300 advisers m 38 countries 

500 correspondents  in 70 countries  in the world 

60 National counsellors  in 60 countries (EU, Med, CEEC, 
AL, Asia) promote 2 EUROPARTENARIAT events/year 

200 partners of EU are involved  in the organisation  of 40-
50 events per year 
110 BIC (98 in assisted*areas, otliers in Central  & Eastern 
Europe) 
200  Focal  Points  (23  National  Focal  Points),  18 countnes 
(EU + EFTA) 

56 Members EU + Norway + Iceland 

lntormation  Demonstration  and 

Organisations  tor Promotion ot Energy technologies 
(OPET)  DGxvn + xni 
MIDAS  (Multimedia 
Support Network) (will replace NAPs in  1997) DG XEU 
NAPs (National Awareness Partners) DG XI11 
EU RES (European Employment 
Service)  DG V 
European Crossbordcr Consumer Information  Centres 
DGXX1V 
Rural Information  Carrefours 
DGX 

50 in Europe- New call tor proposal  in 1996 

22 centres  in  17 countries (EU + EEA) 

30 Members EEA 
450 Euroadvisers in  15 MS + Iceland & Norway 
12 cross-border structures 
21  Members in EU countries except Greece and UK 

70 in EU countries 

Info-points-Europe; Euro-libraries  - DG X 

all Member States 

c-1 

JMë 
lntormation  and  advice  to  businesses,  in  particular 
SMEs on Community regulations & programmes 
Help  businesses  develop  international  partnerships 
through  appropriate  advise  for,  before  and  after  the 
search of partners 
Help  SMEs  to  find  partners  through  a  very  large 
broadcasting of their cooperation opportunities 
Encourage cooperation between enterprises trom assisted 
areas  (objectives  1,  2,  5b  &  6)  and  enterprises from 
other EU and non EU countries. 
Promote  transnational  cooperation  between  SMEs  in 
Europe 
Creation and development  ot  innovative SMEs through 
provision of integrated services 
Disseminate information  to SMEs on KID programmes 
for  RTD 
and  help 
programmes 
Promote  innovation  notably  via  technology  transter, 
exploitation of research results and promotion of 
EU-RTD programmes 
Build relations with the industrial world and SMEs 

their  applications 

them 

in 

Raise awareness and organise information campaigns on 
new information  services 
Promote the use ot electronic information  services 
Facilitate  freedom  of  movement  tor  workers  and  help 
employers recruit at international level. 
Information  to  consumers  on  crossborder  activities 
linked  to consumer  issued 
Community information to rural communities, stimulate 
exchange  of  experiences  and  partnerships  between 
European and rural  regions 
information  tor the general public 

10 

network or service provider.  This "first-stop-shop"  concept does not affect  the specific 
missions and activities of the other Community networks and does not remove the need 
to improve the effectiveness  of these networks. However, this "first-stop-shop" dimension 
for the EICs will help businesses to find their way more easily about the various existing 
networks (see paragraph a above and corresponding chart). 

Content of information. While in the past the EICs focused on disseminating Community 
information  and cooperation  opportunities, the following  new areas will be covered or 
strengthened: 

-  Single Market: Mechanisms will be put into place to allow for a more systematic two-
way communication flow between the Commission and the business world. EICs are 
in a particularly  good position to inform the Commission on the problems faced by 
enterprises  in  their  activity  related  to  the  implementation  of  the  Single  Market 
programme and other Community policies. 

- 

internationalisation: the completion of the Single Market and the growing globalisation 
of  markets  creates  important  trade and business  opportunities  abroad  for  European 
companies.  However,  one  of  the  main  obstacles  that  SMEs  have  to  overcome  in 
attempting to participate in a European or global market is the difficulty  in accessing 
global  or  regional  market  information35.  Such  information  is  generated  by  a  great 
number of organisations within the Community, some of which are members of the 
EIC  network  (Chambers  of  Commerce,  Export  promotion  agencies, Eurostat, etc.). 
Therefore,  the  Commission  will  encourage  maximum  synergy  between  these 
organisations; 

-  environment: the EIC network will, in particular through its specialised working group 
on  environmental  issues,  increase  its  efforts  to  provide  adequate  information  on 
environmental management, regulations, studies and Community Programmes. In terms 
of sustainable  development,  the EIC network can play an important role in helping 
SMEs  understand  environmental  challenges  and  discovering  appropriate  solutions. 
EICs could also facilitate contacts between mainstream businesses wishing or needing 
to  invest  in  cleaner  and  energy  saving  methods  and  processes  and  those  (eco-) 
businesses which produce the relevant goods and services; 

-  sectoral  information  : much  effort  will  be devoted  by  EICs to  satisfy  a  frequently 
expressed  interest  by  SMEs to  obtain  information  on European matters,  sometimes 
related  to  specific  business  or  trade  sectors.  This  will  require  greater  co-operation 
between the EIC network and the sectoral trade associations established at European 
or national  level. ; 

-  pmactive pjwision  of  information  : the  information  needs  of  SMEs  are  strongly 
related  to  the  development  of  the  Community's  policies  and  activities  which  are 
undergoing considerable change36. The provision of information  services by the EIC 
network will have to adjust to this change whereas the provision of tailor-made replies 
to specific  questions from SMEs will remain unaltered.  With a greater emphasis on 
openness  and  transparency,  and  the  wider  use  of  Green  and  White  Papers  in  the 
consultation  process  will  place  greater  importance  on  providing  information  about 
issues on which business needs to be kept  informed. 

-  awareness of Community priorities : there will also be a greater need for promotional 
activities  in  particular  in the framework of  the  Community  wide  awareness-raising 

35 

36 

Commission  SME Report for the Madrid European Council, CSE(95)2087, pages 9 and 16. 
See Action  Programme  1996 of the Commission. 

11 

11 

campaigns launched by the Commission in order to promote major political priorities 
of the Union (e.g., the Single Currency). 

Finally, the Commission will step up its other information  efforts  either in co-operation 
with  SME representative organisations  or through  its own publications. The EICs will 
step  up  their  efforts  to  improve  access  to  these  Community  publications.  Whenever 
possible, the Commission will use Internet services to make information readily available 
to the final customer. 

High quality service is of paramount importance to the impact the network can have on 
the business community. This high quality should be as homogeneous as possible on the 
basis  of  the  stimulation  method.  The  Commission  does  not  share  the  view  of  the 
evaluator that - at the current level of resources employed - the network should be able 
to achieve a greater qualitative and quantitative impact within the business community 
(especially with SMEs)37. It stands by its assessment that the stimulation method has now 
reached its limit38, unless additional resources can be mobilised  Such an increase can be 
modest by comparison with what would be required if the Commission were to  follow 
the suggestion that the EIC network be fully operated and financed by the Community.39 

The additional financial  contribution would come on top of the regular quality premium 
which the Commission suggests should be raised to a level of 25 000 ECU per annum. 
This amount would cover not only the present amount of 20 000 ECU but also all the 
other  financial  support  granted to the EICs in order to cover the costs of promotional 
material,  access to  data banks  etc. It would thereby  allow considerable  adninistrative 
economy  and  also  remain  conditional  on  obtaining  the  minimum  quality  standard  at 
present  under  preparation,  or  the  quality  objectives  defined  by  the  host  organisation 
within the framework of the management by objective methodology.40 

An additional  financial  contribution of  10 000 ECU would be sufficient  to stimulate a 
sizeable number of EICs to commit themselves to a quality standard which would include 
a  proactive  approach  and  full  co-operation  œncerning  the  establishment  of  a 
comprehensive  performance  measurement  system  which  would  allow,  inter  alia,  the 
impact on the business community to be monitored This contribution, while being open 
to ail EICs, would in practice be limited in the beginning to between one quarter and one 
third  of the network  since it  is estimated that the number  and the qualification  of the 
personnel required for satisfying the enhanced quality criteria will not be available for a 
greater number of EICs, at least at the beginning of the four year period. In the long run 
this  policy  should  encourage  most  of  the  EICs  to  obtain  a  high  level  of  customer 
satisfaction. 

C2. 

IMPROVE THE PROMOTION OF SME  POLICY ACTIONS 

While the  scope  of the Community's  SME policy  has  grown  gradually  over time, the 
same cannot be said about the perception of its impact by the European SMEs. There is 
an urgent need to increase this impact which partly depends on similar efforts  at national 
level. Reflection  in this direction will be favoured by the outcome of a concerted action 

37 

38 

39 
40 

External  evaluation  report of the Second  Multiannual  Programme,  p. 12. 
Report  on the future  operation  of the  information  and cooperation  networks, COM(95) 435  final  of 
5.12.1995,  p.21. 
External  evaluation  report of the Second  Multiannual  Programme,  p. 14. 
Report  on the future  operation  of the  information  and cooperation  networks, COM(95)  435  final  of 
5.12.1995,  p.31. 

%ln 

12 

to stimulate the demand for business services. The Community partly shares this problem 
with Member States. This has led to a proposal for a concerted action in this field41. It 
has to be recognised that the promotional  efforts  agreed to by the Community and the 
individual  members of its networks have not been proportional to the need for a wider 
use  of  these  instruments.  One of  the  difficulties  encountered  has  been  that  the  target 
population of about  1.5 million European enterprises cannot be easily identified through 
direct promotional action. 

The Commission  will  continue to seek the right balance between a  general  awareness 
raising action and more pinpointed efforts, while widely decentralising the implementation 
of  its  yearly  campaigns.  Continued  attempts  to  increase  the  cost  effectiveness 
notwithstanding,  the Commission  firmly  believes that the resources  available  for  such 
campaigns need to be increased. These campaigns will be of two types : 

•  campaigns undertaken in co-ordination with the normal promotional activities carried 

out by the members of the EIC Network; 

• 

the organisation of two European Business Weeks which will aim at increasing the 
awareness  of  concrete Community  business support  services throughout  the Union 
and also cover particular themes of interest to SMEs to be developed with Member 
States and SME business organisations. 

C3. 

PROMOTE CO-OPERATOVTH^ 

There is an  obvious need to facilitate  the efforts  of SMEs to find business partners in 
other  Member  States,  or  even  third  countries.  Since  SMEs  express  their  needs  for 
partnership research in different  ways, according to the degree of complexity of the co 
operation  desired,  the Community  will  have to continue to provide different  kinds  of 
services. Therefore,  a merger of the BRE and BC-networks42 is not contemplated by the 
Commission.  However, there is a need for simplification  and clarification  arising from 
the  fact  that  some  EICs  use  a  special  VANS  conference  for  answering  co-operation 
requests.  Those  EICs  who  wish  to  participate  in partnership  search  activities  will  be 
requested to become members of one or the other group of intermediaries, depending on 
their interest and capability. The co-operation conference, which has operated as a further 
channel  of contacts, will  therefore  be discontinued  in the interest  of reaching a higher 
degree of professionalism. This policy will be facilitated by the Commission's efforts (e.g. 
VANS) to intensify  linkages between its different  networks. 

Another measure in this context will be the creation of a directory listing all the members 
of the different  networks  and  indicating the various types of services they  offer.  Such 
services  can  embrace company  audits prior to the formulation  of  a strategy  involving 
partnership search as well as downstream assistance in the negotiation of a co-operation 
agreement. 

For  the rest  the  Commission  will  follow  the orientations  outlined  in the report  on the 
future  operation of the information  co-operation networks. They include: 

41 
42 

Integrated  Programme for  SMEs and the craft  sector, p. 19. 
BRE:  Business Cooperation Centre ("Bureau de rapprochement des entreprises") BC-NET: Business 
Cooperation  Network. 

13 

• 

intensifying the network effect through the support giyen to specialised groups within 
the networks. 

•  developing a new information  system to replace the outdated technology still  in use 

• 

since the initial phase of the BC-NET. 
setting up of a single database in order to facilitate an integrated access to partnership 
or business opportunities identified through the various Community initiatives in this 
field  (the two partnership search networks, Europartenariat  and Interprise). 

Despite these various new initiatives, the Commission estimates that the financial support 
from  the Community budget will not have to be increased. This will be rendered possible 
by ploughing back the revenue generated through the tarification of the BC-NET services, 
the level of which will be fixed at a flat rate of 1  000 ECU per year under the conditions 
presented  in  the  report  on  the  future  operations  of  the  information  and  co-operation 
networks. 

C 4.  FRfJvOE DIRECT OGrnAŒ 

INTERPRISE) 

In view of the success of the Europartenariat and Interprise Programmes, the Commission 
intends to continue the organisation of two Europartenariat events per year and of some 
40 to 50 Interprise events per year. 

In order to  increase the quality of the preparation of the meetings, the Commission, in 
selecting the national organiser, will emphasise those criteria which confirm the capability 
of the organisation to provide upstream and downstream assistance to the undertakings 
selected for a participation. The Commission does not believe that a similar effort  can be 
made  for  visiting  companies43  bearing  in  mind  that  Europartenariat  and  Interprise 
programmes have been developed for enterprises which do not seek the intervention of 
an  intermediary  and  often  manifest  their  interest  rather  late  in  the  day.  However,  in 
advertising  such  events, the  Commission  will  draw attention to the availability  of the 
services offered  by the various Community networks. 

G5.  DEVELOP SUBOONTTUCITNG PARTIVERSHIPS 

Community actions for subcontracting aim at improving transparency of the markets and 
strengthening inter-industrial partnership. Apart from statistical aspects there is a need to 
increase transparency  of the legal environment applicable to subcontracting relations in 
each  Member  State.  The  Commission  will  provide  practical  guides  to  improve  the 
contractual relationship between principals and subcontractors, particularly when there is 
an  element  of  transnational ity.  Support  should  also  be  given  to  the  organisation  of 
European  forums  intended  to  identify  new  developments  and  concerns  related  to 
subcontracting  in strategic activities, as well as best practices  of third  countries which 
could be transferred to the Union. This should allow the Commission to focus its support 
on priority areas for the Community's subcontracting strategy. 

To  improve the  competitiveness  of European subcontractors  actions will  be developed 
aiming at the promotion of European subcontractor know-how to third country principals 
wishing either to invest in Europe, or to import European assets and services. In addition, 
actions will be taken to develop a better understanding of the structures of third country 

43  As suggested  in the external evaluation report of the Second Multiannual Programme,  p.22. 

14 

subcontracting markets and the nature of the subcontracting relations of these countries, 
in order to identify  the existing co-operation opportunities. 

To  facilitate  subcontractor  contact  and  to  optimise  the  search  for  partners,  the 
Commission will develop a Sub-Contracting Assistance Network (SCAN) aimed at the 
identification and promotion of highly qualified businesses, possibly certified throughout 
the Union. 

In view of promoting relationships between main contractors and subcontractors and in 
response  to  a  Council  mandate  of  22  November  199344  buyer's  exhibitions45  were 
organised at international level with the support of the Community to test their feasibility 
in a number of sectors in the context of the new inter-industrial relations. The result of 
the test phase will be evaluated at the beginning of the new programme. Depending on 
the outcome of this evaluation, the need for further Community action will be examined. 

C6.  PROMOTE ACCESS TO NEW MARKETS AND INTERNATTOvmiSATTaV OF SMES 

The  globalisation  of  the  markets has  a  strong  impact  on  the competitive  situation  of 
European  SMEs. European  SMEs need to  adapt their strategies  on the basis of better 
awareness  both  of  strategic  advances  made  by  third  country  competitors  and  of  the 
characteristics  of  third  country  markets  they  want  to  access,  including  in  the  newly 
emerging  and  fast-growing  economies  of Asia  and the  Pacific  Rim.  The  Community 
recently defined  a strategy for achieving improved market access to third countries.46 

The Commission SME Report for the Madrid European Council highlighted the need for 
measures for business support in this field While much of the effort  needs to be made 
at  Member  State  level,  the  Community  has  a  role  to  play.  The  Commission  will  in 
particular  step  its  efforts  for  the promotion  of  internationalisation  of  SMEs  and  their 
penetration  into  third  country  markets.  Community  Programmes  aimed  at  fostering 
international  co-operation  (JOP,  ECEP, MED-INVEST,  AL-INVEST,  ASIA-INVEST) 
should be better focused on SMEs, in particular in view of encouraging partnerships and 
joint ventures with enterprises in third countries. 

In addition to the measures proposed in the Integrated Programme in favour of SMEs, the 
Commission will facilitate access to market information47,  improve business co-operation 
networks  and  partnership  programmes48  and  develop  pilot  actions.  The  latter  will  in 
particular  focus  on  the  organisation  of  fact  finding  missions  and  the  testing  of  co 
operation models in accessing third markets.49 Finally, support will be given for a small 
number of actions  to  facilitate  the participation  of small  enterprises  in trade shows  in 
third countries, at least with joint stands.  Part of these initiatives will help to reinforce 
the  concrete  implementation  of  the actions provided  under  the Transatlantic  Dialogue 
("Business Bridge"). 

Council  Resolution  of  22 November  1993 on  strengthening  the  competitiveness  of  enterprises  in 
particular of SMEs and craft enterprises, and developing employment, OJ n° C 326 of 3.12.93, p.l. 
"salons inversés". 
COM(96)53  final. 
See § C.l.c. .  ove. 
See § C.3 and C.4. 
See for instance the French  "compagnonnage" programme and the German "Firmenpool" scheme. 

50  Communication  from  the Commission on the Craft  Industry and Small Enterprises, Keys to Growth 

and Employment  in Europe, COM(95) 502 final  of 26.10.1995, p.l 1. 

z 

15 

P.  ENHANCE  SME  œMPETmVENESS  AND  IMPROVE  ACCESS  TO 

RESEARCH INNOVATION AND TRAINING 

D . l. 

INCREASE THE INNOVATIVE POTENTIAL OF  SMES 

Innovation  is  a  major  factor  in  growth  to  which  SMEs  have  traditionally  made  an 
important  contribution.  However,  the  globalisation  of  markets  has  introduced  a  new 
dimension to this problem and the Commission, in its Report for the Madrid European 
Council51, has  identified  a number of problem areas in this field.  In its Green Paper on 
Innovation52  the Commission  stressed the need to intensify  and take a more consistent 
approach to efforts  which hitherto have been too fragmented, in order to overcome the 
obstacle  and  handicaps  which  still  hinder  innovation  in  the  European  Union,  and 
identified  routes for action to this aim. 

The  main  responsibility  for  correcting  action  lies  with  Member  States.  In  addition, 
specific  measures  for  SMEs  have  been  introduced  under  the  Community  research, 
innovation and regional policies (e.g. the Innovation Programme, Technology Stimulation 
Measures for SMEs and Regional Innovation Strategies). A large consultation process on 
new Community  actions has recently been launched on the basis of the Green Paper on 
Innovation. 

On the basis of this Third Multiannual  Programme the Community's Enterprise Policy 
will  continue  its  "laboratory  approach"  in particular by testing  innovative  methods  of 
support through pilot actions which, if successful,  can be taken over by Member States 
or  other  Community  policies.  These pilot  actions which are not  yet  covered  by  other 
Community programmes can be tested to demonstrate the utility of specific  approaches 
for SMEs. 

a. support for the development of firms with growth potential 

The White Paper on Growth, Competitiveness and Employment highlighted the need for 
supporting the development of firms with growth potential since these are the firms most 
likely to create permanent jobs over a longer period.53 A major  challenge is to  identify 
these enterprises. 

In the framework  of the Second Multiannual Programme for  SMEs and craft  industries, 
the Commission  has successfully  developed an audit methodology  aimed at  increasing 
the  access  of  SMEs  to  national  or  European  R&TD  Programmes  (Euromanagement 
R&TD).  Similar  actions  aiming  at  facilitating  the  participation  of  SMEs  to  the 
Community  R&TD  programmes  have  been  implemented  by  the  specific  R&TD 
programmes  and  in  the  future  the  technology  and  management  audit  methodology 
initiated  by  Enterprise  Policy  will  be  integrated  and,  if necessary,  adjusted  under  the 
Innovation Programme. In addition, R&TD is not the only way to growth. In particular 
in  service  industries,  other  factors  come  into  play.  Under  this  Third  Multiannual 
Programme the scope of the Euromanagement methodology will therefore be refocussed 
to  encompass  these other  critical  factors,  including strategic  management  training and 
internationalisation. 

51 

52 

Commission  SME  Report  for  the  Madrid  European  Council, CSE(95)2087,  pages  5 and  6. 
Green  Paper  on  Innovation,  COM(95) 688 final. 
White Paper  on  Growth,  Competitiveness  and  Employment, p.87. 

n 

16 

In  addition  to  this  audit - methodology,  the  Commission  proposes  a  more  bottom-up 
approach  consisting of support  for  the creation of "business  clubs" with  entrepreneurs 
willing to contribute through their own action to the development of a growth strategy 
for their region.54 This model has been successfully  developed in a number of Member 
States.55  The  Commission  will  further  encourage  the  spread  of  this  model  in  other 
Member States, in particular through support for the networking of the various initiatives. 

tx support for New Technology Based Firms (NTBFs) 

New  technology  based  firms  (NTBFs)  open  entirely  new  areas  for  growth  and  job 
creation. However, specific problems need to be resolved in order to support the growth 
of these firms.56 In this context the Community has successfully developed a methodology 
to mobilise private capital  in the high risk phase of seed finance. But there are similar 
problems when  it comes to  finding sufficient  second round finance in order to  sustain 
NTBFs in their attempt to realise rapid growth (including the case of existing companies 
attempting to rejuvenate themselves through a new technology). The high risks involved 
in such investments have made early stage venture capital unattractive for most European 
investors. There is a need to ascertain the appropriate incentive for  larger quantities of 
private  capital  to  be invested  in the  international  expansion  of new technology  based 
enterprises. Therefore, the Commission proposes to launch a pilot action - to be jointly 
managed with the Community Innovation Programme - aimed at catalysing the process 
of channelling private capital towards this kind of high risk investments. 

D.2.  STIMULATE MANAGERIAL TRAINING 

Other  key  factors  in  safeguarding  the  competitiveness  and  long-term  employment 
potential of SMEs are the improvement of training provision and the stimulation of their 
managerial  skills,  in particular to  increase their capacity to adapt to new challenges.57 
Member  States  need  to  put  into place  easily  accessible  training  programmes  and  an 
infrastructure  which take into account the special needs of SMEs.5 

The Commission  plays  a complementary  role  in this  field  mainly through  a  series  of 
actions taken under the Community's Policies for Employment (in particular througji the 
ADAPT  Initiative59),  Education  and  Training.  Most  of  these  concentrate  on  training 
provision and access for workers in SMEs.60 

Under  this  Third  Multiannual  Programme  actions  will  be encouraged  and  focused  on 
training of SME managers and intermediaries,  in particular with the aim of helping to 
identify  and test novel approaches in this field mainly through pilot projects. The latter 
will  in particular seek to: 

• 

improve management  training prior to business start-up, in particular by supporting 
the  development  of  a  case  study  methodology  adapted  to  the  needs  of  European 

e.g. the PLATO project  developed  in Belgium, 
e.g.  Ireland  and  Denmark. 

56  Commission  SME Report  for  the Madrid  European  Council, CSE (95)2087, p.5. 
57  White Paper on Growth, Competitiveness  and Employment, p.87. 
58  Commission  SME Report  for tlie Madrid  European  Council, CSE(95)2087,  p. 13. 
59  See, Report on tlie co-ordination of activities in favour of SMEs and tlie Craft  Sector, COM(95) 362 

final  of 8.9.1995. 
See Integrated  Programme  in favour  of SMEs and the Craft  Sector. 

60 

1 

17 

SMEs61, by training intermediaries from SMEs and craft organisations on European 
issues and by promoting the exchange of experience between leading third countries 
and the EU in this  field; 
increase  training  in  the  fields  of  standardisation  and  certification  and  adapt 
management training to the needs of women entrepreneurs.62 

• 

D.3.  ADAPTATION TO ENVIRONMENTAL RFXXJÏÏŒMENTS 

In  the  Action  plan  for  the  further  implementation  of  the  Fifth  Environmental  Action 
Programme adopted on 24 January  1996 priority is given to the problems faced by SMEs 
in  adapting  to  environmental  requirements.  SMEs  are  less  aware  of  "environmental" 
regulations,  have  less  access  to  information  about  the  availability  and  costs  of  clean 
.technologies, energy saving and other environmental advice services. 

In this context particular emphasis is put on environmental management and thcspeedy 
launched  a 
introduction  of  eco-audit  certification. 
EUROMANAGEMENT pilot action which focuses on small and craft enterprises which 
will  be  finalised  in  1997.  Subsequent  extemal  evaluation  should  indicate  the  further 
actions needed. 

In  1996  the  Commission 

R  mOMOra ENTREPRENEZ 

E l.  BUSINESS CULTURE AND ENTREFKKNTCURSHu^ 

In its Report to the Madrid European Council63 the Commission highlighted the need to 
promote  entrepreneurship  at all  levels. The primary  goal  must be to  stimulate a truly 
entrepreneurial  culture, based on values such as self-reliance, risk-taking and a sense of 
personal commitment. While most of the actions will have to be taken at Member State 
level64, the Commission will stimulate the exchange of best practice in this field and by 
supporting the identification  of particularly dynamic entrepreneurs65. 

E2. 

CRAFT  AND  SMALL ENTERPRISES 

In a separate communication to the Council66, the Commission has highlighted the need 
for a specific Community initiative taking into account the specific characteristics of craft 
industries and small enterprises. This communication, mandated by Council Resolution 
of 10 October  199467 formulates the conclusions to be drawn from the debates held at the 
second European Conference  on the craft  industry and Small Enterprises held in Berlin 
on 26 and 27 September 1994. 

62 
63 
64 

Most of the case studies used at  present are based on US experience. 
See Section  E.4. below. 
See Footnote  1 above. 
Promotional programmes already exist  in various Member States, for  instance in Germany, Austria, 
Ireland,  Finland  and  Luxemburg (See  Footnote  1 above, Annex I, section G.3). 
In  1995 tlie Commission supported an  initiative in this area (Europe's 500). 

65 
66  COM(95)502 of  26.10.1995. 
67  Council Resolution of  10 October  1994 on giving full scope to the dynamism and innovatory potential 
of SMEs, including the craft sector and micro-enterprises, in a competitive economy, OJ n° C 294 of 
22.10.1994, p.6. 

^ 

18 

The Commission intends to give a first follow-up to this communication under the Second 
Multiannual  Programme.  Given  the  limited  financial  resources  available,  most  of  the 
priority objectives  identified  will have to be covered by actions to be undertaken in the 
Third  Multiannual  Programme.  These  priority  objectives  include:  integration  of  this 
particular  category  of  enterprises  in  the  Single  Market;  support  for  transnational  co 
operation  projects;  specific  support  in  the  fields  of  standardisation,  certification, 
environmental  and  quality  management;  better  access  to  vocational  and  management 
training  in  particular  for  co-entrepreneurs;  a  better  access  to  sources  of  finance;  and 
support for an initiative of the European Craft industry associations  in the field of image 
building (European Craft Academy). 

E3.  ENTERPRISES IN COMMERCE AND DLsnrRmunvE TRADES 

Parallel  to  the  ongoing  consultation  of the  interested  parties  in the  framework  of  the 
Committee  on  Commerce  and  Distribution, the  Commission  proposes  to  carry on  its 
action  aimed  at  facilitating  the  adjustment  process  of  enterprises  in  commerce.  The 
Commerce 2000 pilot programme should be extended in order to cover the application 
by such enterprises of all the modern methods of management related to the use of new 
technologies.  Emphasis  will  continue  to  be placed  on  the  promotion  of  co-operation 
between  SMEs, including co-operation between  SMEs and large enterprises. Attention 
will be given to a wide dissemination of the results of the pilot actions carried out after 
careful  evaluation and discussion of their outcome. 

Depending  on  the  outcome  of  the  discussion  of  the  Green  paper  on  Commerce  and 
Distribution, which the Commission plans to approve in 1996, the Commission proposes 
to  organise  an  exchange  of  best  practices  on  topics  particularly  sensitive  for  the 
development of commerce and distribution. 

E>4.  WOMEN  AND YOUNG ENTREPRENEURS: ENTERPRISES OWNED BY MINORITIES 

The  Essen  and  Madrid  Summits  œnfirmed  the  important  role  of  women  in  SME 
development,  the  generation  of  new jobs  and  the  competitiveness  of  the  European 
economy which depends on making the best use and development of women's skills. Up 
to one third of new enterprises are at present created by women, and greater attention has 
to  be paid to the  importance  of women entrepreneurs. As recently highlighted  by the 
Commission,68  women  entrepreneurs  and  assisting  spouses  are  faced  with  various 
difficulties  and constraints. 

This Multiannual  Programme will develop a number of actions to support  Community 
policy  in favour  of equal opportunities for women69. The actions will include: 
-  the promotion  of  information  activities  throughout  the  Multiannual  Programme,  in 

- 

particular through the Euro-Info-Centres and the partnership programmes; 
the development  of exploratory  actions  into possible solutions  in the field of equal 
oprx)rtunity for women entrepreneurs and co-entrepreneurs; 

-  the development of a synergy with the other relevant Community policies; 
- 

the support for  European networks of women entrepreneurs and co-entrepreneurs. 

68 

69 

COM(96)67 final of 21.2.1996. 
Fourth Community Action Programme on Equality of Opportunities between Women and Men (1996-
2000 ) and Commission's Communication on "Incorporating Equal Opportunities into all Community 
Policies and  Activities" 

"X 

19 

The Commission will also support and initiate concrete actions which seek to address the 
specific  problems  faced  by young entrepreneurs. Concrete actions will  include support 
for  initiatives  exploring  innovative  approaches,  in particular  in  view  of  strengthening 
management training and advice for young entrepreneurs during their critical start-up and 
first development  phases,  for  instance by  promoting the use of  new technologies  and 
networking between enterprises. 

In addition, the Commission will explore possible actions to address the specific problems 
faced  by  minorities  in  setting up  and  running  small  enterprises.  Concrete  action  will 
include the co-financing of a limited number of studies or support measures to foster and 
encourage  their  integration  into  the  society.  These  initiatives  will  complement  the 
measures contained in the proposed Employment-Inclusion Initiative within the European 
Social Fund. 

m  POLICY DEVELOPMENT 

There is a strong need for a better knowledge of the specific characteristics and needs of 
European businesses, in particular  SMEs and crafts,  in order to  adapt and complement 
existing Enterprise Policy actions. The Commission will therefore  develop its activities 
in this field in its effort  to improve their  effectiveness. 

a.  statistics 

Having  good  quality  and timely  information  on the number  of  enterprises,  their  size, 
structure  and  demography  is  of  great  importance  in  order  to  monitor  and  revise  the 
Community's  SME Policy. In co-operation with Eurostat several statistical projects and 
programmes  will  be  continued  with  the  emphasis  on  improving  the  coverage  and 
timeliness, and on using all available information  rather than burdening businesses with 
extra requests for information. In this context, the Commission will test the feasibility of 
creating a pan-European microeconomic database. The availability of this information  -
which exists  in the US - constitutes a very useful  tool for  stimulating the creation and 
orientation of new enterprises, in particular in areas where job potential exists. 

Parallel to this general statistical work, support will continue to be given to the statistical 
analysis of commerce and distribution as well as of the situation of co-operatives, mutual 
societies, associations and foundations (CMAFs). In all these fields, consideration will be 
given to the need for minimising the burden on enterprises resulting from the collection 
of data, in particular by assessing the cost-effectiveness  of the statistics requested and by 
consulting SME organisations before proposals are made to collect new statistics. 

b.  SME Observatory 

The Commission proposes to maintain the approach hitherto followed  in the field of the 
SME  Observatory.  The  reliance  on  an  independent  network  with  a  strong  research 
component is the best guarantee of an objective interpretation of the available quantitative 
and qualitative data. Already now this network comprises some institutions close to the 
business realities of SMEs as suggested in the extemal evaluation report.70 

70 

External  evaluation  report of the Second Multiannual  Programme, p. 36. 

~\X 

20 

The Commission  will  consider  the methodology  for  developing a framework of trend 
indicators based on inquiries led by various organisations (such as Eurochambers) in co 
ordination  with  Eurostat.  There  could  be  also  an  attempt  to  use  in  the  report  non-
harmonised national data in the field of monitoring the impact of the Single Market on 
SMEs in view of the fact that in this field the dynamics of the evolution are of greater 
interest than a harmonised snapshot of the situation. 

Finally, the feasibility of incorporating the major qualitative and quantitative conclusions 
into a data bank with on-line access will be examined as well as the possibility of putting 
part of the report on Internet. This should give the report a uider audience including the 
possible access by SMEs. To enhance the impact the Commission proposes to organise 
a yearly conference  in order to allow for a wide discussion with all interested parties. 

c  studies on SMEs 

In  order  to  increase  knowledge  about  SMEs,  a  number  of  research  projects  will  be 
supported. These will include the study of particular aspects, such as craft industries and 
small enterprises, women entrepreneurs, commerce and distribution and CMAFs, followed 
by the dissemination of the research results. 

d  develop and evaluate SME policy actions 

The adequacy of Community measures depends on an ongoing effort aimed at identifying 
and  evaluating  policy  initiatives  undertaken  both  at  national  and  Community  level  in 
order to develop the potentials of SMEs as "a dynamic source of employment, growth 
and competitiveness  in the European Union". This calls for a stronger effort  to increase 
the quality of the support the Commission can contribute to the exchange of best practices 
between  Member  States.  This  also  calls  for  better  accessibility  of  the  available 
information.  In order to achieve this goal, the Commission proposes to develop, in close 
co-operation  with  Member  States  and  with  the  SME  Observatory  network,  an  easily 
accessible and user-friendly  data base œnœming SME policy measures. 

The Commission will also publish on a regular basis a report on the development of the 
inclusion of the SME dimension in all policies and programmes of the Community. 

These measures which provide an overview of the progress achieved in the field of SME 
Policy  will  help  increasing  the  efficiency  of  actions  aimed  at  stimulating  the 
competitiveness  and  growth  of  European  SMEs  in  the  prospect  of  stimulating  their 
employment  capacity. 

ANNEX  I 

COMMISSION REPORT ON 
RECENT POLICY INITIATIVES AT MEMBER STATE  LEVEL 
FOR SMALL AND MEDIUM-SIZED ENTERPRISES  (*) 

(*)  This Report  has been presented  by the Commission  to the Madrid  European  Council 

(CSE (95) 2087) 

u:\polncv\cannes\annex-en 

3 

4 

4 

5 

6 
6 

8 

8 

9 

9 

SUMMARY  OF SME-RELATED  MEASURES 

TAKEN AT MEMBER STATE  LEVEL 

Contents 

Page 

Introduction 

A. 

SUPPORT FOR THE DEVELOPMENT OF EMPLOYMENT  IN SMEs 

A. 1.  Social Measures 

A.2.  Fiscal Measures 

B. 

FACILITATING  THE CREATION AND DEVELOPMENT OF SMEs BY 

REDUCING  ADMINISTRATIVE, FISCAL, SOCIAL AND  OTHER 

CONSTRAINTS 

B. 1.  Reduction of Administrative or Legislative Constraints 

B.2.  Improvement of the Fiscal Environment for SMEs 

B.3.  Reduction of Constraints Resulting from Social Legislation 

C. 

IMPROVING  MANAGEMENT  QUALITY IN SMEs 

C. 1.  Facilitating  SME access to Training Programmes 

C.2.  Improving Information  for  SMEs 

C.3.  Improving Advice to SMEs 

D. 

SUPPORT  FOR R+D EFFORTS IN SMEs 

D. 1.  Facilitating the Participation of SMEs in Research  Programmes 

D.2.  Encouraging  the Distribution of Results of R+D to SMEs 

E. 

IMPROVING  SME ACCESS TO FINANCE 

E. 1.  Financing Business Creation 

E.2.  Financing Business  Development 

E.3.  Financing  Business  Transfer 

F.  HELPING  SMEs TO INTEGRATE BETTER  INTO THE  INTERNAL 

MARKET AND TO INTERNATIONALISE 

F. 1.  Integration  of SMEs into the Internal Market 
F.2.  SMEs1 Exports to Third Countries 

G.  OTHER  MEASURES 
G. 1.  Promoting  .  VIE Access to the Information  Society 
G.2.  Facilitating  SME Access to Public Markets 
G.3.  Development  of an Enterprise Culture 

10 

10 

11. 

11 

12 

13 

13 
13 
14 

15 

15 

15 

17 
17 
17 
18 

"IC 

Introduction 

This  note presents  a summary  of measures taken at  Member  State  level  in the  course  of 
the last two years or currently envisaged which aim to promote the creation,  development 
and transfer  of SMEs. 

The note is structured under seven headings as follows: 

A.  Support for the development of employment in SMEs 

B.  Facilitating  the  creation  and  development  of  SMEs  by  reducing  administrative, 

fiscal, social or other constraints 

C.  Improving management quality in SMEs 

D.  Support for R+D efforts  of SMEs 

E. 

Improving  SME access to  finance 

F.  Helping SMEs to integrate better into the Internal Market and to  internationalise 

G.  Other measures 

The note is based  on replies to a questionnaire sent to all Member  States. For  a  number 
of  countries,  the  replies  to  the  questionnaire  were  very  general.  Here  also,  where 
possible,  the  information  provided  has  been  supplemented  by  internal  Commission 
analysis. 

,£, 

A.  SUPPORT FOR THE DEVELOPMENT OF EMPLOYMENT IN SMEs 

The  majority  of  initiatives  under this  heading  are not targeted  exclusively  at  SMEs, but, 
given  their  predominant  role  in  employment  creation  in  all  Member  States,  SMEs  are 
intended to be prime  beneficiaries. 

A.l.  Social  Measures 

The main emphases  in Member States1 social  policies in this area include on the one 
hand,  increasing  demand  for  labour  by  improving  the  flexibility  of  the  labour 
market,  by  reducing  the  costs  of  recruitment,  by  incentives  to  recruit  unemployed 
people  and  by  improving  the  skills  of  those  seeking  work  and,  on  the  other  hand, 
improving  the  supply  of  labour  by  facilitating  access  to  qualified  people  and  by 
making recruitment easier. 

A  number  of  Member  States  have  improved  the  flexibility  of  the  labour  market.  In 
Germany, the limited contract employment  provision has been extended to the year 2000 
and  a  new  law  permits  more  flexible  working  hours.  In  Belgium,  the  procedure  for 
modification  of  working  time  has  been  simplified  and  consecutive  fixed-term  contracts 
are  now  permitted.  In  Belgium  also,  instruments  are  being  developed  to  redistribute 
available  work,  particularly  by  promoting  different  forms  of temporary  work  and  career 
interruption.  In  the  Netherlands,  dismissal  procedures  have  been  shortened  and  made 
more  flexible,  particularly  as  regards  the  preventive  test  on  dismissal,  working  time 
regulations,  extension  of  probation  and  conditional  periods  and  extension  of  temporary 
contracts. In Spain, the maximum duration of temporary  employment  contracts has been 
extended  from  three  to  four  years  and  enterprises  receive  a  subvention  if  they  make  a 
temporary contract  permanent. 

A  number  of  countries  have  introduced  measures  to  reduce  the  costs  of  creating 
employment.  In  Spain,  new  subsidies  have  been  introduced  for  permanent  part-time 
recruitment.  In  France,  the  new  government  has  indicated  its  intention  to  reduce  non-
salary  costs  by  10% for  low-skilled  workers  earning  up to  1.2 times the minimum  wage 
(SMIC). In Belgium,  under the  "Plan  Plus  Un", an enterprise  employing  its  first  worker 
receives a reduction of  100%, 75% and 50% of employer social charges for the first  three 
years and there is a reduction of employer charges for  low-paid  workers in both  Belgium 
and  France.  In  the  UK,  the  Netherlands,  Spain,  Italy  and  Ireland,  employers'  social 
insurance  contributions  have  been  reduced  in  general.  In  Luxembourg,  employer  social 
charges  on  salaries  have  been  abolished  and  replaced  by  a  State  scheme.  In  Germany, 
SMEs have been relieved from the cost related to parental leave. 

r 

Austria,  the  Netherlands  and  Belgium  have  introduced  measures  to  increase  the 
attractiveness  to enterprises  of  recruitment  of unemployed  people.  In Austria,  where a 
person  has  been  unemployed  for  more than  a year  and  is difficult  to employ,  the  public 
employment  agency  can pay two-thirds of the wages to an employer. In the Netherlands, 
57 pilot projects are to be launched, mainly aimed at SMEs, to provide 20,000  subsidised 
jobs  for  unemployed  people who keep their unemployment  benefits  for  two years with a 
view to maintaining  these jobs  unsubsidised  thereafter.  In Belgium, an action  allows  for 
employer  social  security charges to be reduced when an employee is engaged  through an 
unemployment  support programme. There is also support for the remuneration  and social 
security  contributions  of  unemployed  people  engaged  in  the  framework  of  support  for 
SMEs.  In  Portugal,  there  is  a  three-year  exemption  from  social  contributions  and  a 
subvention equivalent to twelve times the minimum  monthly wage for  enterprises  which 
recruit  first  time  young  workers  and  the  long-term  unemployed.  In  Spain,  there  is  a 
reduction  in  social  charges  for  recruitment  of  unemployed  people  over  45  and  the 
handicapped. In Finland, subsidies are provided for recruitment of the unemployed. 

To  improve  the  supply  of  labour,  some  countries  have  focused  on  the  skills  of  those 
seeking work.  In Austria,  the  "Arbeitstiftungen"  keep people  in  contact  with  work  who 
would  otherwise  be  unemployed  and  offer  them  continuing  education  or  vocational 
training  while  at  the  same time  helping  SMEs to  find  qualified  employees.  In  Belgium, 
the Employment-Training  Convention  for  unqualified  young people under the  age of 25 
alternates work  in a company  with professional  training  in an agreed  centre. In  Sweden, 
there are programmes to train and re-educate the unemployed. 

Germany  and  Austria  have  sought  to  improve  access  of  SMEs  to  qualified  personnel 
by  establishing  independent employment  placement  services. In  France  and  the  UK, the 
emphasis  in  this  regard  is  on  improving  information  for  employers.  In  France,  a  "one-
stop-shop" is to be established to simplify  administrative procedures relating to taking on 
employees, particularly  in SMEs. In the UK, comprehensive guidance on employing  staff 
has been produced to address lack of knowledge of entrepreneurs in this area. 

A.2.  Fiscal  Measures 

Tax-breaks  to  encourage  recruitment  are  the  main  form  of fiscal measure  used  by 
Member States. 

In  Finland,  for  family-owned  SMEs  and  small  companies,  income  for  consumption  is 
separated  from  income for  investment  with the latter taxed at standard  company  tax rates 
instead  of personal  tax  rates.  In  Italy,  firms  which  employ  additional  workers  can  claim 
tax  relief  and  reinvested  profits  are exempt  from  taxation.  In  Ireland, a  lower  VAT  rate 
has been  introduced  for  labour-intensive  service  industries. In Germany, VAT  thresholds 
have  been  raised.  In  Spain,  national  and  regional  incentives  include  reductions  in  tax 
levels and free  depreciation related to employment creation. 

B. 

FACILITATING  THE  CREATION  AND  DEVELOPMENT  OF  S M ES  BY 
REDUCING  ADMINISTRATIVE,  FISCAL, 
SOCIAL  AND  OTHER 
CONSTRAINTS 

B.l.  Reduction of Administrative or Legislative Constraints 

from  reporting 
Simplified  and  more 
requirements, one-stop-shops, business impact assessments and deregulation are the 
main  areas  of  administrative  simplification 
facilitating  SME  creation  and 
development pursued by Member States in recent years. 

transparent  procedures,  derogations 

With  regard  to  administrative  procedures,  France,  the  Netherlands  and  Finland  have 
reduced  substantially  the number  of documents  and  regulations  applied  in  setting  up  an 
enterprise.  While  in  Finland  collection  and  coordination  of  company  information  is 
concentrated in the National Statistics Office,  France uses the "Centres de Formalités des 
Entreprises" (CFE) for that purpose. In Italy, one fixed tax has replaced six former taxes, 
and there  is automatic approval of an authorisation request  if the relevant  authority  does 
not react within the specified  time period. In Finland, the company  approval process  has 
been  simplified,  a  single  advance  payment  procedure  has  been  introduced  for  all  taxes 
and  local  tax  offices  are  empowered  to  issue  binding  precedents.  In  Ireland,  a  single 
registration  form  for  all tax purposes has been introduced.  In Austria, a uniform  date  for 
return  of  all  taxes  has  been  introduced.  In  France,  three  simplifications  are  due  to  be 
introduced  in  1996:  the  single  social  and  recruitment  declarations  and  the  single 
apprenticeship  contract.  In  Germany,  licensing  procedures  have  been  simplified.  In  the 
UK, introduction of an annual return form with pre-printed details and three line accounts 
for  low  turnover  companies  have  cut  down  on  paperwork  for  SMEs  and  facilitated 
prompt  delivery  of  annual  accounts.  In  Spain,  more  flexible  administrative  procedures 
allow  greater transparency  and more rapid responses, and  standard  and  simplified  forms 
are being planned. In Portugal, enterprise associations have established protocols with the 
National Companies' Register to facilitate company creation from  an administrative point 
of view. 

M 

Changes  in  legal  procedures  have widened the scope for  formation  of  SMEs and  made 
the  rules  governing  their  operation  more  flexible.  Germany  has  enlarged  the  range  of 
trades  eligible  for  certification  by  the  Handelskammer.  In  Greece,  it  is  now  possible  to 
create  a  limited  company  consisting  of  one  person.  In  Spain,  the  new  private  limited 
companies  law  simplifies  and  makes  more  flexible  the  legal  framework  for  companies 
and  takes  special  account  of  SMEs.  In  France,  broadening  of  the  legal  definition  of  a 
company  has  created  a  level  playing  field  in  the  tax  and  social  treatment  of  different 
forms  of  business  entity.  In Portugal, notaries have  been  given  a wider  role  in the  legal 
formation  of companies, so simplifying  the process. 

Among  derogations  applied,  in  Austria  greater  flexibility  has  been  introduced  so  that 
businesses  with  lower turnover  are not required  to keep records  by double  entry  but  can 
use  the  cost  book  principle  of  accounting.  In  the  UK  too,  Companies'  Act  disclosure 
requirements  have  been  simplified.  In  the  UK  and  Ireland,  VAT  return  thresho-tds  are 
being increased to reduce reporting burdens. 

One-Stop-Shops  to promote start-ups are to be launched in Germany by the chambers of 
commerce and  in  Sweden  by the  regional  support  organisations,  the  ALMI.  In  Belgium 
and  Spain, it is intended to establish a single point of contact for all  SMEs' dealings  with 
public services. 

The deregulation  initiative in the UK aims to improve existing legislation,  simplify  new 
legislation and improve sensitivity of enforcement.  This initiative involves a consultation 
phase with business on all legislative proposals and application of the principle of  "think 
small  first"  at  all  stages  from  drafting  to  implementation.  Future  development  of  this 
initiative will  include greater use of contracting out. Other countries are at various  stages 
of  introduction  of  similar  Business  Impact  Assessments  and  deregulation  initiatives.  In 
Germany,  the  emphasis  is  on  reviewing  the  impact  of  new  consumer  protection 
provisions  on  SMEs.  Sweden  is  undertaking  a  systematic  overhaul  of  all  business 
regulations.  Greece  has  created  specialised  units  in  each  Ministry 
to  examine 
simplification.  In  Ireland,  a  parliamentary  committee  has  been  established  to  scrutinise 
the  impact  of  new  and  existing  legislation  on  SMEs.  Business  Impact  Assessments  are 
about to be introduced in the Netherlands and are under consideration in Spain. 

h* 

B.2.  Improvement of the Fiscal Environment for SMEs 

Tax  reform, various  tax derogations  and reductions  of corporation  tax rates are the 
main fiscal  measures  pursued by Member States. 

Tax reform  in Germany has focused  on mergers and reorganisations, with the possibility 
now  available  of  a  fiscally  neutral  change  of  corporate  form  from  a  company  to  a 
partnership,  a  development  with  particular  importance  for  SMEs.  In  Sweden,  limited 
companies, partnerships  and the self employed  are treated  equally  for  tax purposes. Italy 
has  exempted  operating  income  which  has  been  reinvested  from  corporation  or  income 
tax, whichever  is  applicable.  In France, investment  in an  enterprise  less than three years 
old, or  in  an  unquoted  SME  with  a turnover  below  FF  140 million,  attracts  a tax  credit 
equal  to 25% of  the  investment.  In Belgium,  it is intended  to revise the  fiscal  regime to 
reinforce  the own  resources of enterprises. In Ireland,  it is planned to streamline .existing 
legislation on income, corporation and capital gains tax. 

Among derogations  applied, in the Netherlands, Portugal,  Spain and development  zones 
of  France,  there  is  a  reduction  in  taxes  for  the  early  years  after  start-up.  In  the 
Netherlands  also,  the  tax  deduction  for  new  start-ups  is  to  be  increased,  while  in  Spain 
there  is  also  a  tax  deduction  for  investment  in  RTD.  In  Austria,  the  tax  exemption  for 
small enterprises has been increased. In Finland, property tax on SMEs has decreased and 
in Ireland,  the thresholds  which qualify  a company  for  quarterly  rather than monthly  tax 
returns  have  been  increased.  In the new German  Lander, the municipal  trade capital  tax 
("Gewerbekapitalsteuer")  has  been  suspended  and  the  municipal  trade  earnings  tax 
("Gewerbeertragsteuer")  has been lowered to benefit  SMEs; tax relief on the sales profits 
of manufacturing  SMEs has also been extended.  Corporation tax rates have been reduced 
in Germany,  Spain, France, the Netherlands and Ireland. In Germany also, the top rate of 
personal  taxation  of enterprise  income has been reduced;  the enterprise tax threshold  has 
been  enlarged  and  the  base  to  which  it  is applied  reduced;  and  the  wealth  tax  threshold 
has been increased.  In the UK, businesses are entitled to claim tax relief  for training, and 
employees can claim tax relief on vocational training they pay for themselves. In Finland, 
the  rate  of  corporate  income  tax,  the  rate  of  tax  on  investment  income  and  the  rate  of 
withholding tax are being decreased. 

B.3.  Reduction  of Constraints  resulting from  Social  Legislation 

There are two main  areas of action under this heading. First, there is the maintenance  of 
welfare  benefit  entitlements  for  unemployed  people  starting  up  a  new  business, 
which  apply  in  Belgium,  the Netherlands,  Denmark,  Finland  and  Spain.  Secondly,  there 
are simplified  health  and  safety  compliance  procedures  for  small  firms  in the UK and 
Ireland. 

h 

C. 

I M P R O V I NG  M A N A G E M E NT  Q U A L I TY  IN  S M Es 

C.l.  Facilitating SME Access to Training Programmes 

Provision  of  finance  for  training,  specific  and  general  training  programmes, 
coordination  of training services and wider recognition  of qualifications  are the key 
emphases in Member States' policies in this area. 

Finance  for  training  in Germany  takes the  form  of  subsidised, guaranteed  loans to the 
craft,  industrial  and  distribution  sectors. In the UK, workforce  training  is regarded  as an 
important  business  investment  and  loans are provided  to  small  firms  to  support  this. In 
the UK and Ireland, there are special provisions for training programmes involving ten or 
more  SMEs. In  Spain, public  funds  are available  for  training  programmes  for  groups of 
SMEs.  In  Luxembourg,  funding  is  provided  for  training  centres  of  the  Chambers  of 
Commerce. 

Among specific  training programmes, in Austria the emphasis is on management of the 
quality  process,  in  France  key  areas  include  maintenance,  the  environment  and  quality, 
and  in Spain the focus  is on increasing understanding  of industrial design techniques.  In 
the  UK,  the  focus  is on World  Class  Manufacturing  and  on  a programme  to  update  the 
skills  of  key  workers  in  SMEs.  General  training  programmes  are  provided  in  Finland 
through  post-graduate  institutions  and  in  Belgium,  through  a  mix  of  in-company 
experience  and courses in specialist training centres. In Denmark, training  is coordinated 
through  technical  schools  and  the  SME  federation.  In  France,  a  new  orientation  in 
training programmes is focused  on managers and chief executives. 

Coordination  of  training  services  in  the  UK  is  the  particular  responsibility  of  the 
Training and Enterprise Centres. In Sweden, the coordination role is filled by the regional 
support  organisations,  the ALMI,  which have  subsidiaries  in  each  region jointly  owned 
with  the  County  Councils;  improving  management  quality  is  a  major  aspect  of  their 
work.  In Portugal, the Programme  for  Enterprise  Creation  provides  integrated  support to 
improve the capability  and competence of young entrepreneurs. In Ireland, the integrated 
approach is delivered through the PLATO Network. 

In  Germany,  a  recent  initiative  has  broadened  recognition  of  qualifications  and  means 
that  employees  in  SMEs  enjoy  increased  opportunities  to  improve  qualifications  as,  for 
many  professions,  a  university  training  is no  longer  required.  This  initiative  could  also 
increase the supply of qualified  outside expertise, thus making it less costly to SMEs. 

U 

C.2.  Improving Information  for SMEs 

Understanding  best  practice, 
information  and  more 
comprehensive  information  services  are  the  key  aspects  of  Member  States'  policies 
in this regard. 

improved  access 

to 

In  the  UK,  the  emphasis  on  best  practice  promotion  is  spearheaded  by  business  links 
with  the  emphasis  on  self-help  and  learning  from  others.  In  Ireland,  guides  on  best 
practice have been prepared for key management areas. 

In Belgium,  Sweden  and  Ireland, telephone hotlines  are being  set up to  improve  access 
to information.  In the UK, Spain and Portugal, computer  databases  are being  developed 
for this purpose. 

More  comprehensive  information  services  are being  provided  by  means  of  Enterprise 
Houses  in the  Netherlands,  through  the  Technological  Information  Centres  in  Denmark 
and by a network  of regional  government  offices  in Finland.  In Austria,  a programme  to 
tackle  management  difficulties  with  understanding  new  technologies  involves  SME 
managers visiting leading-edge companies. 

C.3.  Improving Advice to SMEs 

Provision  of  advisory  services  and  financial  support  for  advisers  are  the  main 
aspects of Member States' policies. 

General  advisory  services  tend  to  focus  on  provision  of  comprehensive  advice.  The 
"Supernet"  system  in  the  UK  introduces  small  firms  to  national  and  international 
networks  of  centres  of  excellence.  In  Finland,  general  programmes  are  provided  on  the 
one  hand  to  help  entrepreneurs  evaluate  the  feasibility  of  their  ideas  and  their  own 
suitability  to  act  as  entrepreneurs;  these  programmes  also  provide  external  consultancy 
support  to  help  existing  SMEs  to  analyse  their  present  position  and  prepare  a 
development  programme.  In Ireland,  retired  business  managers  act as mentors  to  SMEs. 
and  the  PLATO  Programme  provides  SME  owner-managers  with  access  to  expertise  in 
large  companies.  In  the  Netherlands,  the  key  initiative  is  coordination  of  networks  and 
consultancy  services;  a  number  of  pilot  projects  have  also  been  established  to  provide 
advice and support to unemployed people starting up a business. 

Specific  advisory  services  focus  on  counterfeiting  and  strategic  management  in  France, 
knowledge  and  quality  systems  and  environmental  management  in  Denmark  and 
technology and exporting in Finland. 

Financial  support  for hiring  advisers  is provided  in Germany,  Spain,  Denmark,  Greece, 
the UK and  Ireland. 

10 

^ 

D. 

SUPPORT FOR R+D  EFFORTS IN S M ES 

D.l.  Facilitating the Participation  of SMEs in Research  Programmes 

National  policies  focus  on  promoting  cooperation  between  SMEs  and  Research 
Centres  to  facilitate  innovation  in  SMEs,  and  on  direct  and  indirect  financial 
support  for  R+D. 

In  Germany,  the  federal  research  cooperation  programme  promotes  links  between 
enterprises and research establishments, including cooperative research and exchanges of 
research  personnel.  Austria  has  also  established  a  programme  for  industry-research 
cooperation.  In  the  UK,  the  LINK  programme  supports  collaborative  R+D  between 
higher  education  institutions  and  SMEs. In  France,  the  Technology  Diffusion  Network 
links  SMEs with  specific  research needs to the research centre best able to  address their 
need.  In  Finland,  the  TEKES  national  network  coordinates  contacts  between  SMEs, 
universities  and  research  institutes and a world-wide network  of technology  centres; the 
network is focused  on marketing of programmes and projects to targeted  SME groups. In 
Greece,  national  policy  encourages  SME  cooperation  with  specialised  R+D 
organisations.  In  Ireland,  campus-based  technology  centres  have  been  set  up  to  bring 
SMEs closer to research programmes. 

Promotion  of  innovation  by  SMEs in  Germany  is through  a programme  to  encourage 
market-oriented  innovation  leading  to  commercialisation.  In  the  UK,  the  SMART 
programme  promotes  technological  feasibility  studies  for  small  firms  while  the  SPUR 
programme  offers  support  to  SMEs  for  development  of new products  and  processes. In 
Ireland, an inventions service assists entrepreneurs in developing patents. In Sweden, the 
National  Board  for  Industrial  and  Technical  Development  supports  SME  R+D  efforts. 
Greece  also  provides  support  to  SMEs  for  research  on  applied  technologies  and 
innovative products. 

Austria  provides  finance  for  searches  for  R+D  partners.  In  France,  the  Technology 
Services  Institute  co-finances  development  work  carried  out  in  a  joint  development 
project  between the institute, a research centre and an SME. In the Netherlands,  financial 
support  is  more  indirect  :  under  the  "Techno-starters"  programme,  technology  brokers 
select high technology seed projects and offer  them to financiers  for  support. 

11 

hh 

D.2.  Encouraging the Distribution of Results of R+D to SMEs 

Technology  counsellors,  personnel  exchanges  between  research  bodies  and  SMEs 
and  technology  transfer  initiatives  are  the  main  means  used  to  encourage  the 
distribution  of the results of R+D to SMEs. 

In  the  UK,  innovation,  design  and  technology  counsellors  provide  advice  to  SMEs  on 
how  to  absorb  the  results  of  R+D.  In  Denmark,  the  role  of  the  Technology  Service 
Institute has been extended to make it the key link between domestic and foreign  research 
centres and SMEs. The ATOUT initiative in France is focused  on advanced materials and 
informatics.  In  Sweden,  the  ALMI  network  provides  counsellors  to  support  the  R+D 
efforts  of  SMEs by improving  the  standards of technology  and  innovation resources  and 
has  recently  taken  the  initiative  to  improve  coordination  and  collaboration  between  the 
different  bodies  working  with  technology  diffusion.  In  Sweden  also,  the  Innovation 
Centre  has  been  set  up  to  finance  early  stage  innovation  and  other  related  measures, 
including a network of innovation advisers. Portugal also supports demonstration  actions 
on the use of innovative technologies in certain sectors. 

Personnel  exchanges  between  research  bodies  and  SMEs  in  Denmark  are  promoted 
under  the  Icebreaker  Programme  which  gives  grants  to  small  companies  which  employ 
an  academic  to  bring  new  knowledge  to  the  company  through  participation  in  a 
development  project.  In  the  UK,  the  Teaching  Companies  Scheme  enables  highly 
qualified  graduates to work part-time in SMEs for two years with joint  academic/industry 
supervisors. 

Technology  transfer  initiatives  in  Spain  are  carried  out  via  the  Interministerial 
Commission  on Science and Technology  which runs a programme  to transfer  the  results 
of  research  to  industry.  In  Finland,  TEKES  promotes  SME  involvement  in  technology 
transfer  activities  with  national,  regional  and  international  programmes.- In  Belgium, 
there is a programme to improve SME access to patents and to commercialise  prototypes 
and new products. 

12 

E. 

I M P R O V I NG  S ME  A C C E SS  TO  F I N A N CE 

E.l.  Financing Business Creation 

New  business  creation  is  encouraged  by state support,  either  tax-based  or  subsidy-
based. In addition, some countries  have measures to encourage  business  creation  by 
the unemployed. 

Tax-based  state  support  takes  the  form  in  Ireland  of  refunds  of  tax  paid  by  an 
entrepreneur  in  previous  employment  to  be  invested  in  the  business.  Subsidies  are 
provided  for  start-ups  in Germany,  Spain,  Portugal,  Greece  and  Ireland.  Loans  schemes 
are provided  in Ireland,  Sweden,  Spain and  Greece. Loan guarantees  are provided  in the 
UK and France. In addition, in the UK, the Growth  Start Programme  focuses  support  on 
fast  growth  start-ups.  Sweden  and  Ireland  provide  seed  capital  for  start-ups.  The 
Netherlands  is  considering  a  scheme  to  improve  access  of  start-up  entrepreneurs  to 
"business  angels".  For  the  unemployed,  in  Germany,  unemployment  benefit  may  be 
continued  at  a  daily  rate  for  six  months  while  the  unemployed  person  seeks  to  become 
established.  The  ACCRE  Initiative  in  France  is  also  focused  on  support  for  the 
unemployed.  In Sweden, an unemployed  person with a business plan can receive  50% of 
unemployment  benefit  for  a  certain  period.  Luxembourg  provides  special  aid  to 
enterprises started by people who are difficult  to employ. 

E.2.  Financing Business Development 

Facilitating  loan  finance  and  private  investment  in  SMEs  are  the  priorities  in 
Member States' policies. 

In  Germany,  state  investment  funds  have  been  refocused  on  SMEs.  In  France, 
SOFARIS guarantees loans to SMEs during their growth phase. 

In  Sweden,  subsidised  loans  are  available  for  SME  development  projects,  while  in 
Belgium, regional investment companies underwrite SME loans. 

Private  investments  in  SMEs  in  the  UK  are  being  facilitated  by  the  launch  of  the 
Alternative  Investment  Market  for  unquoted  companies  with  growth  potential,  by 
providing  additional  tax  relief  for  Venture  Capital  Trusts  and  by  the  Enterprise 
Investment  Scheme which helps unquoted  companies raise equity  capital. The  "Business 
Angel"  system  has  been  introduced,  according  to  which  profits  from  investments  in 
shares of unquoted companies may be rolled over if reinvested  in such shares. 

Italy  has  recently  adopted  a  new  law  which  provides  that  operating  income  which  has 
been  reinvested  cannot  be  taxed.  This  exemption  extends  beyond  the  corporation  tax 
system and  includes  other enterprises  (such  as partnerships)  which are subject  to  income 
tax. 

13 

In France, a scheme has been introduced under which any investment in an enterprise less 
than three years old, or in a unquoted SME with a turnover below FF  140 million, attracts 
a tax credit equal to 25 % of the, investment. 

In Ireland  a measure has been introduced  whereby new entrepreneurs  and other  investors 
in a new business can reclaim  income tax paid in their previous three years'  employment 
(up  to  certain  limits).  The  Belgian  and  German  governments  have  likewise  shown 
interest in measures designed to terminate the fiscal  discrimination of equity. 

Schemes  are  also  under  discussion  in  the  UK and  Italy  designed  to  achieve  neutral  tax 
treatment of debt and equity financing  for enterprises. The key feature  of the proposals is 
that  enterprises  would  be  given  an  "Allowance  for  Corporate  Equity"  (ACE),  a  relief 
against corporation tax based on the value of the shareholders' funds  in the business. 

In  France,  approved  development  companies  receive  50%  state  guarantees  of  their 
investments  in  growth  companies,  while  Sweden  offers  tax  breaks  for  investment  in 
unquoted  companies.  In Luxembourg,  tax  relief  is provided  on profits  reinvested  in  the 
business.  In  Denmark,  state  support  is  provided  to  venture  capitalists  specialising  in 
SMEs. 

E.3.  Financing Business  Transfer 

Favourable  tax  treatment  of  inheritance  and  subsidised  loans  are  the  main 
measures used to facilitate the financing of business  transfer. 

Transfers  and  bequests  of  unincorporated  businesses  and  share  holdings  in  SMEs  are 
eligible  for  full  exemption  from  inheritance  tax  in  the  UK.  Subsidised  loans  to 
facilitate  the  transfer  of  businesses  are  provided  in  Belgium  and  Spain.  In  France, 
SOFARIS  provides  loan guarantees to facilitate  the transfer  of businesses.  The  proposed 
law for  1996 provides a 50% reduction of gift tax for the transfer  of a business, as long as 
the  beneficiaries  continue  the  business  for  the  next  five  years.  In  Ireland,  a  new  law 
allows  companies  to  purchase  their  own  shares  out  of  undistributed  profits  for  the 
"benefit  of the trade" and  50% of  all business assets transferred  are now  exempted  from 
inheritance  and  gift  taxes. In  Denmark,  there  is a  substantial  reduction  in  death  duty  in 
the  case  of  business  transfer  and  succession  taxes  are  deferred  and  reduced.  In  Finland, 
agricultural  entrepreneurs  can  obtain  special  financing  arrangements  for  the  transfer  of 
assets  between  generations.  In  Germany,  the  transfer  of  business  is  facilitated  by  the 
extension  of the time  frame  from  7 to  10 years during  which  the inheritance  and  the  gift 
tax can  be  paid,  free  of  interest.  Moreover,  businesses  benefit  from  a 25  % reduction  of 
the unit  value  of the working capital  before  succession tax  is levied.  This  applies  also  to 
shares  of  finance  companies.  In the Netherlands, the  interest-free  period  for  payment  of 
inheritance tax will be extended from  5 to  10 years. 

14 

A' 

F.  HELPING  SMEs  TO  INTEGRATE  BETTER  INTO  THE  INTERNAL 

MARKET AND TO INTERNATIONALISE 

It  should  be  noted  that  a  number  of  Member  States  cited  initiatives  aimed  at  both 
integration into the Internal Market and at internationalisation.  Where these initiatives are 
of a general nature, they are described under the internationalisation  heading. 

F.l.  Integration of SMEs into the Internal Market 

Programmes  to promote Internal  Market penetration, advisory  services  and  studies 
are  the  main  measures  employed  by  Member  States  in  relation  to  the  Internal 
Market. 

In  the  UK,  "Opportunity  Europe"  Programmes  are  designed  to  encourage  SMEs  to 
broaden their market base in Europe. In France the  "Partenaires  pour  l'Europe"  initiative 
is  focused  on  standards  and  quality  in  this  regard.  Greece  offers  support  for  Internal 
Market cooperation projects while Portugal cofinances  European tendering  efforts. 

The UK operates a  Single Market  Compliance  Unit which  provides  an  advisory  service 
to  firms  experiencing  obstacles  to  Internal  Market  trading.  The  UK  also  carries  out 
detailed sectoral studies of internal market trade opportunities. 

F.2.  SMEs'  Exports to Third  Countries 

Financial  support,  advisory  services,  better  coordination  and  delivery  of  export 
promotion  services  and  export  risk  reduction  measures  are  the  main  features  of 
Member States' recent policies. 

In  Spain,  financial  support  takes  the  form  of  investments  in  companies  which  are 
establishing  themselves  abroad.  Finland  provides  special  support  for  internationalisation 
of  technology-based  SMEs.  Denmark  provides  finance  for  cooperation  with  East 
European enterprises. 

In  the  UK,  advisory  services  help  SMEs  to  identify  export  needs  and  potential  and 
provide  support  to  help  ensure  successful  implementation  of  export  strategies.  In 
Germany,  advice  is given on development  of business  cooperation  programmes,  such  as 
with  Asia  and  Latin  America.  In  Greece,  development  of  export  consortiums  is 
facilitated. 

15 

h"i 

In  the  Netherlands,  the  emphasis  is  on  greater  coordination  of  the  services  of 
government,  the  chambers  of  commerce,  the  banks  and  the  SME  representative 
organisations  to  improve  the  distribution  of  information  on  internationalisation.  In 
Belgium,  greater  coordination  of  the  federal  bodies  for  export  promotion  is  being 
undertaken,  including  greater  collaboration  of  the  Foreign  Trade  Office  with  other 
relevant  bodies  and  better  utilisation  of  foreign  credit  insurance  facilities.  German 
embassies now have specific responsibility  for assisting SMEs entering foreign  markets. 

To seek  to  reduce  the risks  associated  with exporting,  in  Denmark  50% subsidies  are 
available  towards  establishment  costs  of  doing  business  in  Eastern  Europe.  In  Finland, 
subsidies have been introduced to promote export diversification.  In the UK, experienced 
exporters  are  being  recruited  as  Export  Development  Counsellors  to  SMEs.  In  Ireland, 
formal  links are being established with key European market regions. 

16 

G.  OTHER MEASURES 

G.I.  Promoting SME Access to the Information  Society 

Programmes  to  stimulate  use  of  information  technology  and  access  to  the 
INTERNET  and  other  infrastructure  are  the  primary  means  of  promoting  SME 
access to the information  society. 

In  Finland,  an  SME-tele-programme  has  been  started  to  encourage  SMEs  to  use 
information  technology  for  networking  to  present  co-operation  projects  in  computer 
hardware,  software  and  services.  In  the  UK,  training  courses  are  run  jointly  with  IT 
suppliers to train  SMEs  in the use and benefits  of  information  and  IT. In Greece-,* SMEs 
are supported in the application of information and networks. 

In  the  UK,  the  Advanced  IT  Service  assists  clients  to  access  information  via  the 
INTERNET.  In  the  Netherlands,  and  Austria,  the  Chambers  of  Commerce  are  being 
given the possibility to provide information  via the INTERNET. In Ireland,  leading-edge 
telecommunications  infrastructure  is being provided  in  less  developed  areas  to.facilitate 
establishment of remote information  industry SMEs. 

G.2.  Facilitating SME Access to Public Markets 

Provision  of  databases  and  familiarisation  campaigns  are  the  main  means  used  to 
facilitate access of SMEs to public markets. 

In Austria and Finland  (on a regional  basis), the TED  database  is used.  In France, calls 
for  tenders  are  available  via  Minitel.  In  the  UK,  public  and  specialist  databases,  video 
conferencing  and  national  supplier  databases  are  available  through  regional  supply 
offices. 

In  the  UK  also,  familiarisation  is  promoted  through  advice  given  to  public  sector 
purchasing officers  on the benefits  of using small business suppliers. In Ireland the  focus 
is on information  directories, seminars and "meet the buyer" exhibitions. 

In  Ireland  also,  specialised  consultancy  support  is  being  provided  to  improve  SMEs' 
access  to  public  procurement  and  preparation  of  public  tenders,  and  it  is  planned  to 
establish  a  national  procurement  and  sub-supply  database  and  to  develop  an  advisory 
service for  SMEs and procurement officials.  In Belgium, legislation has been amended to 
guarantee cooperatives better access to public markets. 

17 

$• 

G.3.  Development of an Enterprise Culture 

Promotion  of entrepreneurship  is the primary  means used to develop  the  enterprise 
culture. 

Promotional  programmes  are run  by the Chambers  of Commerce  in  Germany,  Austria 
and  Luxembourg.  In Finland,  the  "Decade  of the  Entrepreneur"  project  aims  to  create  a 
favourable  attitude  to  entrepreneurship  and  self-employment  as  a  voluntary  method  of 
creating  employment.  In  Ireland,  an  Enterprise  Preparation  Programme  has  been 
introduced  for  senior  business  managers  considering  launching  their  own  venture  and 
Enterprise  Boards  have  been  established  at  local  level  to  support  start-up  of  micro-
enterprises. 

18 

SI 

"MAXIMISING EUROPEAN SMEs' FULL POTENTIAL  -' 
FOR EMPLOYMENT, GROWTH AND COMPETITIVENESS" 

PROPOSAL FOR A COUNCIL DECISION 

on a Third Multiannual Programme 

for  Small and Medium-sized Enterprises (SMEs) 

in the European Union (1997 - 2000) 

(presented by the Commission) 

Ç 

1 

PROPOSAL FOR A 

COUNCIL DECISION 

on a Third Multiannual  Programme 
for  Small  and Medium-sized Enterprises  (SMEs) 

in tlie European Union  (1997-2000) 

(.../.../EC) 

(Text with EEA relevance) 

THE COUNCIL OF TOE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130 thereof, 

Having regard to the proposal  from the Commission,1 

Having regard to the opinion of the European Parliament,2 

Having regard to the opinion of the Economic and Social Committee,3 

Having regard to the opinion of the Committee of the Regions,4 

1.  Whereas  on  14  June  1993  the  Council  adopted  Decision  93/379/EEC  on  a 
Multiannual Programme of Community measures to intensify the priority areas and 
to  ensure the continuity  and consolidation  of policy  for  enterprises,  in particular 
small and medium-sized enterprises, in the Community;5 

2.  Whereas in line with its White Paper on growth, competitiveness and employment, 
the  Commission  has  adopted  on  3  June  1994  a  Communication  on  the 
implementation  of  an  Integrated  Programme  in  favour  of  SMEs  and  the  Craft 
Sector;6 

3.  Whereas  on 29 November  1995 the Commission  adopted a Report  on  "SMEs: a 
dynamic  source  of  employment,  growth  and  competitiveness  in  the  European 
Union" in which the Commission called for a more ambitious Enterprise Policy to 
unlock  the  full  potential  of  European  enterprises  for  employment,  growth  and 
competitiveness; 

1  OJ n° C  of  , p.  . 
2  OJ n° C  of  , p.  . 
3  OJ n° C  of  , p.  . 
4  OJ n° C  of  , p.  . 
5  QJn°L  161, 2.7.1993, p. 68. 
6 
7 

COM (94)207 final  of 3.6.1994. 
CSE(95) 2087. 

4.  Whereas  on  16  December  1995  the  Madrid  European  Council  invited  the 
Commission  to  put  the  objectives  of  the  Madrid  SME  Report  into  practice  as 
swiftly  as possible; 

5.  Whereas  the  Integrated  Programme  in  favour  of  SMEs8  aims  at  presenting  the 

overall Community Enterprise Policy; 

6.  Whereas  this  Decision  is  limited  to  providing  the  legal  and budgetary  basis  for 
specific complementary measures which are not part of other Community policies; 

7.  Whereas the Commission  submitted to the European Parliament, the Council and 
the Economic and Social Committee and the Committee of the Regions an external 
evaluation  report  on  the  implementation  of  the  current  multiannual  programme 
pursuant to Article 5 of Decision 93/379/EEC; 

8.  Whereas the Commission has submitted to the Council in the past 3 years a series 
of communications on measures of relevance to this Decision (e.g. Report on the 
future  operation of the information  and co-operation networks9 and Report on the 
Craft  industry and small enterprises10); 

9.  Whereas this Decision is especially directed at SMEs11, regardless of sector, legal 
structure and geographical  location, and provides for specific actions in favour of 
the Craft  Sector and enterprises  in commerce and distribution ; 

10.  Whereas the measures set out in this Decision aim at: 

• 

• 

encouraging  an  environment  favourable  for  the  development  of  SMEs 
throughout the EU; 
improving  the  competitiveness  of  European  SMEs  and  encouraging  their 
Europeanisation and  internationalisation. 

11.  Whereas the actions in the area of transnational technological development will be 
jointly managed with the Community's R&TD Programme, respecting the relevant 
decision-making procedures; 

12.  Whereas the Second Programme expires on 31 December  1996, while the reasons 

for  its adoption continue to prevail, at least for the foreseeable  future; 

13.  Whereas  it  is  therefore  necessary  to  adopt  a  Third  Programme  for  a  four-year 

period and to endow it with sufficient  resources to attain its objectives; 

14.  Whereas  account  has  been  taken  of  the  extemal  evaluation  report  on  the 

implementation  of the current  multiannual programme; 

15.  Whereas  the  Treaty  does  not  provide,  for  the  adoption  of this  Decision, powers 
other than those of Article  130. 

COM (94)207 final  of 3.6.1994. 
9 
COM (95)435 final  of 5.12.95. 
10  COM(95)502 final  of 26.10.1995. 
1 '  As defined  in the Commission  Recommendation concerning the definition of SMEs (doc. C 96/261 ). 

HAS DECIDED AS FOLLOWS: 

Article  J 

A programme for a Community Policy for Small and Medium-sized Enterprises (SMEs), 
is hereby adopted  for a period of four years from 1 January  1997. 

Article 2 

The programme referred  to in Article  1, incorporating the measures specified  in Annex 
I hereto, shall have the following  objectives: 

1.  Simplify  and improve the administrative and regulatory business environment 

• 

• 

• 

• 

.Ensure  consideration  of  the  interests  of  SMEs  in  the  various  Community 
initiatives and policies 

Simplify  and improve Community legislation 

Increase  transparency  and  the  spread  of  best  practices  on  simplifying  and 
improving the administrative and regulatory environment 

Improve the framework for transnational operations of SMEs 

2. 

Improve the financial  environment for enterprises 

• 

• 

Improve access to loan  financing 

Intensify  efforts  to reduce late payment problems 

•  Facilitate the development of specific financial  instruments 

•  Stimulate the development of capital markets for fast-growing  SMEs 

3.  Help SMEs to Européanise and internationalise their strategies, in particular through 

better information  services 

•  Develop information  services 

• 

Improve the promotion of SME Policy actions 

•  Promote co-operation through business search networks 

•  Promote direct contacts through partnership programmes 

•  Develop subcontracting partnerships 

•  Promote access to new markets and internationalisation  of SMEs 

4.  Enhance  SME  competitiveness  and  improve  access  to  research,  innovation  and 

training 

• 

Increase the innovative potential of SMEs 

•  Stimulate managerial  training 

•  Adaptation to environmental  requirements 

Ç*> 

5.  Promote entrepreneurship and support special target groups 

•  Business culture and entrepreneurship 

•  Craft  and small enterprises 

•  Enterprises  in commerce and distributive trades 

•  Women and young entrepreneurs; enterprises owned by minorities 

Policy development and improvement of knowledge about SMEs. 

Article 3 

1. In order to achieve the objectives laid down in Article  1  and 2, the Commission shall 
take the necessary measures in so far as they cannot be better achieved by the Member 
States, taking account of the findings of any specific  evaluation reports. 

2. The procedure laid down in Article 4 shall be followed  for adopting measures relating 

to: 

•  the adoption,  experimental  implementation or extension of the necessary  projects 

devised for the application of this Decision, 

•  the content  and timetable  of,  and financial assistance  for,  measures  and  calls  for 

proposals, 

•  periodic evaluation of the results of each project in accordance with the timetables 

laid down in specific programmes. 

3. The Committee referred to in Article 4 may examine any other matters concerning the 

programme. 

Article 4 

1. The Commission shall be assisted by a committee of an advisory nature composed of 
the  representatives  of  the  Member  States  and  chaired  by  a  representative  of  the 
Commission. 

2.  The representative  of the Commission  shall  submit  to  the  committee  a draft  of the 
measures to be taken. The Committee shall deliver  its opinion on the draft  within a 
time limit which the chairman may lay down according to the urgency of the matter, 
if necessary by taking a vote. 

3.  The opinion  shall be recorded  in the minutes;  in addition,  each  Member  State shall 

have the right to ask to have its position recorded  in the minutes. 

4.  The  Commission  shall  take  the  utmost  account  of  the  opinion  delivered  by  the 
committee. It shall inform the œmmittee of the manner in which its opinion has been 
taken into account. 

<r* 

Article 5 

1. The Commission shall submit to the Committee referred to in Article 4 annual reports 

on the implementation  of this Decision. 

2. The Commission shall submit to the European Parliament, the Council, the Economic 
and  Social  Committee  and  the  Committee  of  the  Regions  a  regular  report  on  the 
development  of the inclusion of the SME dimension in all Community policies and 
programmes. 

Article 6 

The Commission  shall  submit to the European Parliament, the Council, the Economic 
and Social Committee and the Committee of the Regions, no later than the end of-March 
2000, an external  evaluation report on the implementation of this Decision, including a 
cost-effectiveness  evaluation, and any proposals which it deems necessary in the light of 
the evaluations  effected. 

Article  7 

1. This programme shall be opened up to the participation of the associated countries of 
Central  and Eastern Europe (ÇCEE) in accordance with the conditions laid down in 
the additional protocols to the association agreements on participation in Community 
programmes to be concluded with those countries. 

2.  This programme shall be opened up to the participation of Cyprus and Malta on the 
basis of additional appropriations  in accordance with the same rules as those applied 
to  the  EFTA  countries,  in  accordance  with procedures  to  be agreed  on with  those 
countries. 

Article 8 

1. This Decision shall enter into force on 1  January  1997 and shall cover the period up 

to 31 December 2000. 

2. The budgetary authority shall détermine the appropriations available for each financial 
year in accordance with the principles of good management referred to in Article 2 of 
the  Financial  Regulation  applicable  to  the  general  budget  of  the  European 
Communities. 

Upon entry  into force this Decision shall replace Council Decision 93/379/EEC. 

Article  9 

Done at 

, 

For the  Council 

The President 

ç? 

ANNEX I 

MEASURES REFERRED TO IN ARTICLE 2 

A 

SlMPUFY  AND  IMPROVE THE ADMI1MSTRATTVE AND  RECIJIATORY BUSINESS  EVfyiROVMEXT 

A.l.  Ensure consideration of the interests of SMEs in the various Community initiatives and 

policies 

Integration of the SME dimension into the conception of Community policies. Promotion of the 
co-ordination of Community actions in favour of SMEs which enable SMEs to participate fully 
in all Community actions and programmes, including the Structural Funds, R&TD, international 
co-operation and environmental programmes. 

A.2.  Simplify  and improve  Community legislation 

Actions  to  avoid  and  reduce  unnecessary  administrative  burdens  and  compliance  costs  in 
Community legislation which hinder the creation and development of enterprises, in particular 
SMEs, through the implementation of a pragmatic methodology for the evaluation of the impact 
of legislative proposals (including the use of an unproved Business Impact Assessment System 
and cost/benefit  analyses wherever appropriate). 

A. 3. 

Increase transparency and the spread of best practices on simplifying and improving the 
administrative and regulatory environment 

Actions  to  promote  the  spread  of  best  practices  in particular  in  the field of  administrative 
simplification; promotion of actions on transfer  of businesses and retention of title clauses. 

A.4. 

Improve the framework for  transnational operations of SMEs 

Promotion of the development of alternative dispute resolution for settling transnational disputes 
between enterprises; Stimulation of appropriate legal structures for transnational operations of 
SMEs, in particular the use of the European Economic Interest Grouping (REGIE project). 

B. 

IMPROVE  THE  nNANOAi,  FT^VTRONMENT FOR  ENTERPRISES 

B.l. 

Improve access to loan financing 

Promotion  of  innovative  practices  in  the  field  of  better  access  of  SMEs  to  loan  financing 
(including mutual  guarantee schemes, Round Table of Bankers and SMEs) 

B.2. 

Intensify efforts to reduce late payment problems 

Acceleration of follow-up  to Recommendation on late payment and foresee  further  proposals; 
support for actions to improve the financial  management capabilities of SMEs, in particular in 
the field of information, training and the promotion of integrated cash flow management software. 

B.3.  Facilitate  the development of specific financial instruments 

Promotion of the development of specific financial instruments of interest to SMEs, in particular 
factoring  and credit insurance. 

B. 4.  Stimulate the development of European capital markets for fast-growing SMEs (including 
EASDAQ). 

0 

G  y  HFJPSVESTOEURCPE\NKEAlVDINmi^TlT^^ 

INFORMATION SERVICES 

Cl.  Development of information services (Euro-Info-Centres as "Fust Stop Shops") 

Better access to Community information for enterprises : development of the  Euro-Info-Centre 
network  as  a  "First-stop-shop",  directing  each  request  to  the  relevant  service  provider; 
improvement of tlie composition and quality of services; enlarge and reinforce the  information 
task of the EICs including proactive information activities, in particular in the areas of accessing 
Community programmes, the Internal Market, internationalisation, environmental issues and the 
introduction of the Single Currency; facilitating access of SMEs to market informatiorL 

C.2. Improve the promotion of SME Policy actions 

Promotion  campaigns  in co-ordination with EIC network; organisation of European Business 
Weeks. 

C.3.  Promote co-operation through business search networks; 

Qualitative improvement and definition of a quality standard for the confidential business-partner-
search network (BC-Net) and non-confidential partner-search network (BRE). 

C4.  Promote direct contacts through partnership programmes; 

Continued  development  of  instruments  permitting  direct  contact  between  entrepreneurs 
(Europartenariat  and Interprise programmes) 

C.5.  Develop subcontracting partnerships; 

Further develop actions aimed at promoting transnational sub-contracting. 

C.6.  Promote access to new markets and internationalisation of SMEs; 

Test  innovative  approaches  in  particular  by  facilitating  SMEs'  access  to  new  markets  and 
encourage their internationalisation. 

D.  ENHANŒSMECP\reiITI\'EN^ 

D.J. Increase the innovative potential of SMEs 

Identify best practices and test concrete approaches through pilot actions, in particular in the  fields 
of developing firms with growth potential and New Technology Based Firms (NTBFs). 

D.2. Stimulate managerial training  ' 

Helping to  identify  and test  positive  approaches  in the field  of management  training (mainly 
through pilot projects). 

D.3. Adaptation to environmental ivquiivments 

E 

PROMOTION OF ENTREPRENEURSHIP AND SPECIAL TARGET GROUPS 

E1.  Business cultwe and entivpœneurship 
Stimulate the exchange of best  practice and support  the identification  of particularly dynamic 
entrepreneurs. 

E2.  Craft and small enleipiises 

Launching of pilot-projects, enabling these enterprises in particular to adapt to structural changes, 
to better  integrate  in the  Single Market  and to  benefit  from  the opportunities  offered  by this 
market,  including  in  the  field  of  standardisation,  certification,  environmental  and  quality 
management. 

^ 

E3.  Enterprises in commeive and distributive trades 

Facilitating  the  adjustment  process  of  commercial  enterprises  to  the  Single  Market  and  to 
structural changes, in particular through new technologies (COMMERCE 2000), promotion of 
co-operation between SMEs, dissemination of results of pilot programmes. Follow-up to Green 
Paper on Commerce and Distribution 

E4.  Women and young entrepreneurs; enterprises owned by minorities 

Identification of the specific problems faced by women and young entrepreneurs, as well as small 
enterprises owned by minorities and support for innovative solutions. 

POLICY  DENHELOPMENT AND  IMPROVEMENT OF KNOW! EDGE  ABOUT  SMES 

Improved statistics on SMEs without increasing the burden on enterprises; European Observatory 
for  SMEs; studies;  database  concerning  SME Policy  measures; evaluation  of  existingpolicy 
actions and development of proposals for new Community measures in areas affecting enterprises. 

ù 

Proposal  for a Council Decision (..../..../EC) 

on a Third Multiannual Programme for Enterprises, 

in particular SMEs, in the European Union (1997 - 2000) 

1.  TITLE OF  OPERATION: 

Maximising  European enterprises' full  potential  for employment,  growth  and  competitiveness 

2.  BUDGET HEADING  INVOLVED: 

B5-320 

3.  LEGAL  BASIS 

Article  130 of the Treaty of the European Union. 
Commission  Report to the Madrid  European  Council  and conclusions of the European  Council  of 15 
and  16 December  1995 . 
Follow-up  of  the  "Wliite  Paper  on  growth,  competitiveness  and  employment"  as  presented  by  the 
Commission  to the European  Council of the  10 and  11 December  1993. 

4. 

D E S C R I P T I ON  OF  O P E R A T I ON 

4.1  GENERAL 

OBJECTIVE: 

The present programme aims at: 
1.  Simplify  and  improve the administrative and regulatory environment of SMEs 
2. 
3.  Ensure  better  information  services  and  help  SMEs  internationalise,  in  particular,  through  their 

Improve the financial  environment of SMEs 

Europeanisation 

4.  Promote SME competitiveness, access to research, innovation and training 
5.  Promote entrepreneurial  culture and target groups 
*  Development of SME policy and knowledge of enterprises 

4.2  PERIOD  CO  VERED 

4\ears  (1997  -2000) 

5. 

C L A S S I F I C A T I ON  OF  E X P E N D I T U R E / R E V E N UE 

5.1  NON-COMPULSOR 

Y  EXPENDITURE 

5.2  DIFFERENTIA  TED  APPROPRIA  TIONS 

5.3 

TYPE  OF  REVENUE 

INVOL  VED: 

Possible revenues from  contribution  of third parties registered under article  609 on the state of 
revenues  result  in  the  opening  of  additional  credits  to  be  indicated  under  the  present  article 
according to the provisions of the Financial  Regulation. 

6.  TYPE OF EXPENDITURE OR REVENUE 

Subsidies  for  co-financing  with  other  sources  of the public  and/or  private  sector  (over  60% of total  credit 
requested). 

Studies, training sessions, running costs of instruments,  information. 

Partial  reimbursement  for  certain  actions:  for  example,  for  the  BC-NET:  introduction  of  user  cost 
applicable  to  advisors  of  the  network  as  of  1 January  1993,  seed  capital:  reimbursement  of  loans  on 
management costs in case of success after  10 years. 

7. 

F I N A N C I AL  I M P A CT 

7.1  METHOD  OF  CALCULA  TING  TOTAL  COST  OF  OPERA  TION  (RELA  TION 

BETWEEN 

INDIVIDUAL  AND  TOTAL  COSTS) 

The total amount required for the action depends on the experience of former  exercises. 
The method of calculation  is based on a detailed  estimation  of each  specific  action,  calculated 
according to their specific character,  intensity, frequency  and even range (see point 9.2.). 

CI 

7.2 

ITEMISED  BREAKDOWN OF COST 

ITEMISED 

BREAKDOWN 

1997 

199H 

1999 

2000 

TOTAL 

1.  Simplify  and  improve  the  administrative  and  regulatory  environment  of  SMEs 

i 

Unique 

budget  line,  indicative 

amounts 

administrative 

Simplification  of  the 
and  regulatory  environment  of  SMEs 
Consultation  and  dialogue  with 
representatives 

organisations 

400  000 

450 000 

450 000 

450 000 

1  750  000 

I 000 000 

1 000 000 

1 000 000 

1 000 000 

4  000  000 

2.  Improve  the  financial  environment  of  SMEs 
400 000 

550 000 

650 000 

650 000 

2 250  000 

3.  Ensure  better  information  services  and  help  SMEs  internationalise,  in  particular  through  their 

Europcanisation 

(EIC),  new 

policy 

Access 
to  information 
actions  in  the field  of  market 
information 
Promotion  of  enterprise 
activities 
Inter-enterprise 
BC-NET/BRE, 
INTERPRISE-  Subcontracting 
access  to  new  markets 
(Internationalisation) 

co-operation 
Europartenariat, 

and 

11  050 000 

12 850 000 

13 900 000 

15  400 000 

53 200 000 

3 000 000 

4 000 ono 

4 500 000 

4 550 000 

16 050 000 

7 300 000 

8 200 000 

9 624 500 

9 065 500 

34  190 000 

4.  Promote  SME  competitiveness,  access  to  research,  innovation  and  training 

innovation, 

Participation  of  SMEs  to 
R&D,  the  Information 
Promotion  of  the  (raining  of 
entrepreneurs  and  of 
entrepreneurial 

culture 

Society 

I 500 000 

4  750 000 

3 000 000 

3  000 000 

12 250 000 

1 500 000 

1 500 000 

1 500 000 

1 500 000 

6 000  000 

enterprises 

5.  Promote  entrepreneurial  culture  and  target  groups 
Craft  and  small 
Enterprises 
distribution 
Women  and  young 

1 750 000 
1 750 000 

in  commerce  and 

entrepreneurs 

200 00-0 

3  000 000 
3 000 000 

500 000 

1  750 000 

*  Development  of  SME  policy  and  knowledge  of  enterprises 
3 831 000 
Development  and  evaluation  of  the 
policy 
Enterprise 
Other  actions  (subventions  and 
publications) 
Knowledge  of  enterprises, 
particular  SMEs  (including  co 
operatives) 

1 100 000 

1 500 000 

1 600 000 

I 300 000 

in 

3 500 000 
3 500 000 

4 000 000 
4 000 000 

12 250 000 
12 250 000 

880 000 

880 000 

2 460 000 

3 255 000 

1 164 000 

10 000 000 

2 275 000 

2 275 000 

7 450  000 

1 600 000 

1  700  000 

5  900 000 

T O T AL  1997-2000 

34  000  000 

46  731  000 

49  634  500 

49  634  500 

ISO  000  OOOQ 

(*)  Conditional 
Perspectives 

to  a  complement  of  40 MECU  (1998-1999)  resulting  from  a  possible  revision  of  the  Financial 

3  -

<P' 

7.3  SCHEDULE  OF  COMMITMENT  AND  PA YMENT  APPROPRIA  TfONS 

1997 
34 000 

1998 
46 731 

1999 
49 634,5 

2000 
49 634,5 

CE. 
C.P. 
1997 
1998 
1999 
2000 
ex. suivants 
TOTAL 
Including  a complement  of 40 MECU  in the event of a revision of the Financial  Perspectives 

-
-
24 817,5 
14 890 
9 927 
49 634,5 

-
-
-
24817,5 
24 817 
49 634,5 

17 000 
10 200 
6 800 
p m 
p m 
34 000 

-
23 366 
14 019 
9 346 
p m 
46 731 

17 500 
33 566 
45 636,5 
49 053,5 
34 744 
180 000 

(*) 

EC in M E CU 
TOTAL 
180 000 

1.-4  FINANCIAL 

PERSPECTIVES 

The financing  of this  programme under the Community budget having to be made, according  to point 
18 of the  Interinstitutional  Agreement  of 29 October  1993, in line with  the  financial  perspectives of 
1998 and  1999, the granting  of a complementary  financing  is conditional  to the authorisation  by the 
budgetary  authority  of  an  increase  of the  maximum  amount  of the  relevant  item  for  motives  related 
to the SME programme. 

8.  FRAUD PREVENTION MEASURES 

The  checking  before  payment  of  subsidies  or  of  the  delivery  of  services  and  studies  ordered  and 
carried  out  by  Commission  services,  taking  into  account  the  contractual  obligations  and  the 
principles  of  economy  and  of  sound  financial  and  global  management.  Anti-fraud  mechanisms 
(controls,  deliver}'  of  reports,  etc  ...)  are  mentioned  in  all  the  agreements  and  contracts  concluded 
between the Commission and the beneficiaries  of the payments. 

9. 

E L E M E N TS  OF  C O S T - E F F E C T I V E N E SS  A N A L Y S IS 

9.1  SPECIFIC  AND  QUANTIFIED  OBJECTIVES,  TA RGET  POPULA  TION: 

SPECIFIC  OBJECTIVES: 

A)  Simplify  and  improve  the  administrative  and  regulatory  environment  of  SMEs 

A.l.  Ensure  consideration  of the  interests  of  SMEs  in the  various  Community  initiatives  and 

policies 

SME  dimension  to  be  integrated  into the conception  and  implementation  of  Community 
actions  and  policies. Greater  co-ordination  of Community  actions  and  policies  in  faveur 
of  SMEs  to  be promoted  in order  to enable  SMEs  to  participate  fully  in  all  Community 
actions and programmes, including the Structural  Funds, R&TD  programmes. 

OS 

A.2.  Simplify  and  improve the administrative and  regulatory environment of enterprises 

Actions  to avoid  and  reduce administrative  burdens  and  compliance  costs  in  Community 
legislation  which  hinder the creation  and development  of enterprises,  in particular  SMEs, 
through  implementation  of a  pragmatic  methodology  for  the  evaluation  of  the  impact  of 
legislative  proposals  (in  particular,  cost/benefit  analysis  wherever  appropriate).  Greater 
transparency  and  dissemination  of 
information  on  administrative  and  regulatory 
simplification  initiatives. 

A.3. 

Increase transparency  and the spread  of best practices  on  simplifying  and  improving  the 
administrative and  regulatory environment 

A.4. 

Improve the regulatory framework  for transnational  operations of SMEs 

B. 

Improve  the  financial  environment  for  enterprises 

Promote innovative practices in the field of better access of SMEs to  financing. 

B. 1.  Improve access to loan  financing 

B.2. 

Intensify  efforts  to reduce late payment  problems 

B.3.  Facilitate  the  development  of  specific  financial  instruments  (eg.  mutual  .guarantee, 

facturing,  credit  insurance) 

B.4. 

Improve the access of SMEs to capital  markets 

C.  Ensure  better  information  services  and  help  SMEs  internationalise,  in  particulat,  through 

their  Europeanisation 

C. 1.  Develop information  services  (EIC as a "first  stop shops" 

Better  access  to  Community  information  for  enterprises:  Development  of  EICs  as  "first 
stop  shops" in order to direct  each  request  to the  relevant  service  provider,  improvement 
of  the  composition  and  quality  of  services  provided  by  EICs,  reorientation  of  the 
information  task  of the  EICs  including  proactive  provision  of  information;  better  access 
of SMEs to information  on international  or regional  markets. 

C.2. 

Improve the promotion of SME Policy actions 

Information  campaigns  in co-ordination  with the EIC  network;  organisation  of  European 
Business Weeks. 

* 

C.3.  Partner search networks (BC-NET and BRE) 

Qualitative  improvement and definition  of a quality  standard  for  the confidential  partner-
search  network (BC-NET) and the non-confidential  partner-search  network (BRE). 

C.4.  Partnership  programmes (Europartenariat  and  INTERPRISE) 

Development  of 
instruments  allowing  a  direct  contact  between  entrepreneurs 
(Europartenariat  and  INTERPRISE  programmes)  and  aimed  at  promoting  cross-border 
co-operation. 

C.5.  Subcontracting 

C.6.  Access to new markets and internationalisation  of SMEs 

Development  of  pilot  actions  to  facilitate  SMEs'  access  to  information  on  new  markets 
and to encourage their  internationalisation. 

6 5" 

D.  Enhance  SME  competitiveness  -  access  to  research,  innovation  and  training 

D.l. 

Increase  the  innovative  potential  of  SMEs  and  facilitate  their  access  to  the  Information 
Society 

Identify  best practice and test concrete approaches through pilot projects,.in  particular,  in 
the  areas  of  developing  firms  with  growth  potential  and  supporting  New  Technology 
Based  Firms (NTBFs). 

D.2.  Stimulate managerial  training 

D.3.  Adaptation  to environmental  requirements 

E.  Promote  entrepreneurship  and  support  special  target  groups 

E. 1.  Business culture and entrepreneurship 

Promote business culture and entrepreneurship. 

E.2.  Craft  and small  enterprises 

Identify  the needs of craft  and small enterprises and develop projects, on the basis of pilot 
projects  allowing these enterprises  to adjust,  in particular,  to structural  changes, to better 
integrate  in  the  Single  Market  and  to  benefit  from  the  opportunities  offered  by  this 
market,  in particular  in the field  of standardisation,  certification  and quality  management, 
better access to professional  training and management training. 

E.3.  Enterprises  in Commerce and distributive trades 

Facilitate  the adjustment  process  of commercial  enterprises  to the  Single  Market  and  to 
structural  changes,  in  particular,  new  technologies  (COMMERCE  2000).  Promote  co 
operation  between  SMEs.  Disseminate  results  of pilot  programmes.  Follow-up  to  Green 
Paper on Commerce and  Distribution. 

E.4.  Women and young entrepreneurs; enterprises owned by minorities 

Identification  of  the  specific  problems  faced  by  women  and  young  entrepreneurs  and 
support  for  innovative solutions. 

* 

SME  Policy  development  and  knowldege of enterprises 

Improvement  of statistics  on  SMEs  without  burdening  businesses;  European  Observatory 
for  SMEs, studies and seminars on SMEs. 

Development  of statistics,  studies  and  recurrent  analysis  concerning  co-operatives,  mutual 
societies, associations and  foundations. 

TARGET  POPULATION 

In principle, the actions  could  possibly  interest  all the SMEs  in the European  Union  (this  represents 
15  million  SMEs,  their  trade  organisations  and  the  wholesale  -  including  intermediaries  -  retail, 
catering  and  accommodation  sectors).  However,  the  number  of  SMEs  which  benefit  from 
transnational  actions will necessary  be more reduced according to the typology and the activity of the 
enterprises  and of the nature of the actions developed. 

For  example,  among  the  15 million  SMEs,  1,5  million  are  most  likely to  be  targeted  for  an  action 
regarding Community  information  (compared to the'450 000 enterprises that  are currently  involved). 
One  million  SMEs  could  be targeted  by  the  partnership  actions.  Tlie targets  of  the  actions  varying 
according to the nature of these actions. 

Furthermore,  the actions  aim  at  the  professional  organisations,  the  Chambers  of  Commerce  and  the 
Trades. 

-6 

^ 

9.2  GROUNDS  FOR  THE  OPERA  TION 

9.2.1. 

Introduction 

It  is  largely  recognised  that  enterprises,  and  in  particular,  small  and  medium  sized 
enterprises  (SMEs)  represent  a key element  in the efforts  towards job  creation  and  growth. 
Indeed, the job creation  rate of SMEs is higher than that of the big enterprises. 

It  is,  however,  necessary  to  recognise  the  fact  that  SMEs  are  inherently  more  vulnerable 
particularly  in  the  first  years  following  their  creation.  This  weakness  stems,  in  particular, 
from  the following five factors: 
•  an increasingly complex legal, fiscal and administrative  environment; 
•  difficulty  in participating in R&D programmes and in exploiting the results; 
•  structural  weakness  of SMEs with  regard to their  management  abilities  as  well  as  to the 

inappropriateness  of training programmes; 

•  difficulty  in obtaining finance at a reasonable cost; 
•  difficulty  in accessing markets for products and services. 

It  is  necessary  to  underline  -  with  regard  to  the  subsidiarity  approach  -  that  the  actions 
developed  at  Community  level  are  taken  in  a  context  which  ensures  a  significant  added-
value,  resulting  in  particular  from  the  dimension  of  the  networks  and  of  the  actions 
developed, the objectivity  and the neutrality  of the decisions  taken  at  central  level  as well as 
of the attention paid to regional equilibrium. 

In particular,  if most actions  in favour  of enterprises  are developed  by the Member  States, it 
is  up  to  the  Community  to  take  measures  having  a  transnational  nature,  to  implement 
networks  that have a Community dimension.  To confine  such  activities  to the national  level 
would  not only  be  impossible  and  less efficient,  but  it would  also  distort  competition  to the 
extent that the level of support of each Member State would be extremely diverse. 

The  network  methodology  that  is  proposed  for  the  main  actions  is  based  on  an  extended 
partnership  with  the  national  and  local  players  (chambers  of  commerce  and  industry, 
development  agencies,  national  authorities, etc...  ).  It  is  preferred  to  the  Union  itself  taking 
charge of the EIC  network  which would  most  probably  affect  the  Community  budget  more, 
particularly  in terms  of human and  logistical  resources,  even  with  fewer  centres,  and  would 
considerably  deprive  the  European  Institutions  of  their  privileged  relations  with  their 
partners. 

7-

^ 

9.2.2.  Ch nice  of  ^ va y s  an d  means 

(*)  The estimations  include  the  complementary  budget  resulting from  a possible  revision  of  the 

financial  perspectives for  the SME programme 

1. 

Simplify  and 

improve 

the  administrative  and  regulatory  business 

environment: 

.  5,75  MECU 

a)  Administrative  and  regulatory  environment  of enterprises:  1,75  MECU 

Simplify  and  improve the 
regulatory environment  of SMEs 
Reports on  administrative 
simplification 
Recommendations on 
administrative  simplification 
Transfer  of businesses 
Retention of title 
Settlement  procedures 
Appropriate  legal  structures 
•  REGIE data  base 
• 
awareness  actions 
TOTAL 

1997 
50 000 

1998 
100 000 

1999 
100 000 

2000 
100 000 

-

-

100 000 
100 000 
50 000 
50 000 
50 000 

-

-

100 000 
100 000 
50 000 
50 000 
50 000 

-

-

100 000 
100 000 
50 000 
50 000 
50 000 

-

: 

100 000 
100 000 
50 000 
50 000 
50 000 

400 000 

450 000 

450 000 

450 000 

b) 

Consultation  and  dialogue:  4.0  MECU 

Consultation  and  dialogue  with 
representatives  organisations  (1) 

1997 
1,0 

1998 
1,0 

1999 
1,0 

'2000 
1,0 

TOTAL 
4,0 

(1)  This  consultation  and  dialogue  have  become  of  first  importance  at  the  national  as  well  as 
European  level.  The  strengthening  of  SME  representative  organisations  should  allow  to 
better  identify  priority  actions  for  enterprises  and  evaluate  the  impact  of  the  different 
legislations. 

2. 

Improve  the  financial  environment  for  enterprises:  2,25  MECU 

SMEs - banks 
Mutual  guarantees 
Late payment 
Factoring  and  credit 
insurance 
TOTAL 

1997 
100 000 
100 000 
100 000 
100 000 

1998 
150 000 
150 000 
150 000 
100 000 

1999 
150 000 
250 000 
150 000 
100 000 

2000 
150 000 
250 000 
150 000 
100 000 

400 000 

550 000 

650 000 

650 0000 

0 

Ensure  better  information  services  and  help SMEs  internationalise,  in  particular,  through 
their Europeanisation:  103,44 MECU 

a)  Development of information  services (EICs as First Stop  Shops): 53,2  MECU 

Development  of EICs as  First  Stop  Shops  in order to direct  each  request  to the  relevant  service 
provider, 
improvement  of  the  composition  and  quality  of  services  provided  by  EICs, 
reorientation  of the information  task  of the  EICs  including  proactive  provision  of  information; 
better access of SMEs to information  on international  and regional  markets. 

EIC  network  estimated  budget  for  1997, 

Direct  contributions 

Information/ 
documentation 

Network (1) 
Quality bonus  (la) 
Documentation 

1998, 1999 and  2000 
1998 
5 800 000 
1 300 000 
750  000 

1997 
5 800 000 
800 000 
700 000 

Information  products (2) 
Products of the network 
Consultants 

400 000 
150 000 
2 000 000 

475  000 
165 000 
2  100 000 

30 000 
110 000 
100 000 

35 000 
120 000 
110 000 

1999 
5 800 000 
1 800 000 
800 000 

500 000 
185 000 
2  100 000 

40 000 
135 000 
120 000 

2000 
5 800 000 
2 300 000 
850 000 

525 000 
200 000 
2  100 000 

44  000 
148 000 
131 000 

General  training 
Decentralised  training 
Decentralised  training 
databases 
Brussels  Group 

Annual  Conference 
Monitoring 
Consultants: management 
Consultants: technical 
issues 

Training 

Management/ 
co-ordination 

Promotion 
Audit 

T O T AL 
New actions  market 
information 

G E N E R AL 
T O T AL 

860 000 

875  000 

875 000 

875 000 

• 100 000 

110 000 
300 000 

120 000 
350 000 

135 000 
350 000 

11050  000 

12  140  000 
710 000 

12  825  000 
1 075 000 

13 458  000 
1 942 000 

11050  000 

12 850  000 

13 900  00 

15 400  000 

Note: 

(1) 

(la) 

In  1997,  1998 and  1999, an average increase of  10% per year and  per  item - except  for 
the  contribution  to  the  network  of  25 000  ECUS  per  EIC  and  for  the  expenses  of  the 
consultants - is expected to improve the quality of the Central  Unit's  contribution. 
232  EIC  x 25 000  ECUS: this  includes  documentation,  databases,  travel  expenses  per 
diem (except for meetings). 
There  will  be a bonus  of  10 000  ECUS  in  1997  for  a  third  of  the  network  (80  EICs), 
for  the EICs  which  have increased  their efforts  to  improve  their  quality.  In  1998,  1999 
and 2000, 50 EICs more will receive this bonus. 

INFORMATION  PRODUCTS 
(2) 

Supposing  a  greater  demand  for  DG XXIII  support  regarding  products  developed  by 
the network  - in particular  increased  translation  and  printing  costs  (it  is  not  reasonable 
to let an EIC take on all the costs for a product that can benefit  the whole network). 

-9 

b)  Promotion  of SMEs Policy actions:  16,05 MECU 

Better knowledge of Community  instruments and programmes  for  SMEs  is necessary  to allow a 
greater  involvement of SMEs  in Community actions. 

Promotion  of SME 
Policy  actions 

1997 
3,0 

1998 
4,0 

1999 
4,5 

2000 
4,55 

T O T AL 
16,05 

The  importance  of  repeated  actions  in  the  field  of  communication  must  be  associated  to 
sufficiently  large  campaigns  so as  to  reach  appropriate  results.  Future  actions  will  aim  to  make 
SMEs aware of specific  issues: innovating SMEs, intra-Community trade,  ... 

Two  European  Business  Weeks  will  also  be  organised  with  all  the  networks  and  European, 
national, regional and  local actors (estimated cost:  1,2 MECUs). 

The  estimated  requirements  of  the  other  promotion  actions,  in  particular  the  enterprise  policy 
presentation  stands, are included  in the above-mentioned  financial  envelopes. 

c)  Partner-search  networks  (BC-NET  and  BRE)  -  Partnership  programmes  (Europartenariat 

and  INTERPRISE)  - Subcontracting: 34,19 MECU 

BC-NET/BRE  Networks 
Europartenariat 
INTERPRISE 
Internationalisation 
Pilot  actions 
SUBCONTRACTING 
TOTAL 

1997 
1 
2,1 
2,1 
0,3 

1,8 
7,3 

1998 
1 
2 
2,5 
0,7 

2 
8,2 

1999 
1 
2 
2,5 
1,5 

2000 
1 
2,3 
2„5 
1,5 

T O T AL 
4 
8,4 
9,6 
4,0 

2,6245 
9,6245 

1,7655 
9,0655 

8,19 
34,19 

(1)  BC-NET/BRE  Networks:  Maintenance  over the whole of the period  of costs  related  to the 

management,  co-ordination  and technical and informatic  instrumentation  of the networks. 

Specific  objective, target population  and performance  indicators: as a highly  professional 
network,  the  BC-NET  will  aim  at high quality  offers  of co-operation.  It should  provide an 
average  of  2 000  contacts  a  year,  that  is  8 000  for  the  whole  penod.  The  number  of 
declared  final  agreements  should  be  about  1  000.  It  is  necessary  to  integrate  the  indirect 
effects  of the network and the elements of confidentiality  in the evaluation  of factors  having 
a direct  influence  on the known results. The two networks should  increase the awareness  of 
some  100 000 SMEs towards  co-operation. 

(2)  Europartenariat: 33 % co-financing  of the cost of organising two  Europartenariat  events a 

year, that is  1  MECU  per event. 

Specific  objective,  target population  and performance  indicators: an  average  of  350 host 
enterprises  will be targeted  per event,  in other words  2 800 enterprises  for  the host  regions 
over  8  Europartenariats.  About  15  to  16 000  enterprises  will  be  visiting  the  events  and 
about  100 000 enterprises will  be directly  made aware  (European  meetings, distribution  of 
catalogues,  etc.).  The aim is that the host-enterprises  obtain  30% success  rate  in their  co 
operation agreements. 

(3)  INTERPRISE:  Co-financing  of  up  to  50 000  ECU  (this  corresponds  in  general  to  a  co-

financing  of up to 25-30% of general expenses) of 40/50 INTERPRISE  events annually. 

Specific objective,  target population  and performance  indicators:  16 000 enterprises  over 
the period of 4 years (80-100 enterprises on average per event). 
2 400  enterprises  -  representing  1  200  co-operation  agreements  -  should  be  concluded. 
Some  50 000  enterprises  should  be  made  aware  of  these  co-operation  opportunities 
(promotion, catalogues, etc ...). 

(4)  Internationalisation:  different  new  pilot  actions,  calculated  on  the  basis  of  experiences 

developed by other players, in particular, national ones. For example: 
•  Enterprise  Pool:  to  support  SMEs  first  attempts  to  target  selected  foreign  markets. 
Selection  of  groups  including  15 enterprises  from  at  least  three  Member  States  which 
wish to penetrate a specific  market. 

•  Compagnonnage:  to provide collaborative  assistance  between  SMEs  in  the  same  sector 
across  national  boundaries  to  develop  projects  in  the  pre-feasibility  stage.  A  public 
tender procedure will be launched. 

(5)  Subcontracting:  the three main lines of action in favour  of subcontracting  are as  follows: 

• 

Improvement  of  market  transparency,  in  particular,  through  statistical  surveys  and 
studies  on the economic importance of subcontracting  with  the  Statistical  Office  of the 
EC, legal guide: 0,4  - 0,5 MECU per year; 

•  Strengthening  of  inter-industrial  partnership  (linking  subcontractors,  improving  co 
operation  between  main  contractors  and  subcontractors,  in  particular,  development 
phase  of  the  SCAN  (Subcontracting  Assistance  Network)  project,  support  to 
subcontracting  development  poles,  updating  of  multilingual  sectoral  nomenclatures, 
buyers'  exhibitions  and  actions  in  strategic  areas  in  co-ordination  with  DG III):  1,0  -
1,4 MECU 

•  Promotion of subcontracting among third countries: 0,4  - 0,5  MECU 

11 

Enhance SME competitiveness - Access to research, innovation  and training:  18,25 MECU 

a) 

Increase  the innovative potential  of SMEs: 12 250 MECU 

high 

Support  to  venture  capital  funds  for  the 
growth 
of  young 
development 
enterprises  - reimbursable advances (1) 
EUROMANAGEMENT, 
and 
internationalisation  of  SMEs,  audit  of  1000 
SMEs,  assistance  to  innovation,  R&TD, 
risk capital,  prêt bancaire (2) 
TOTAL 

growth 

1997 
0,5 

1998 
3 

1999 
3 

2000 

T O T AL 

3 . 

9,5 

1 

1,75 

2,75 

1,5 

4,750 

3 

3 

12,250 

( 1 )  Support to  venture capital  funds for  the  development  of  young  high  growth  enterprises  -

reimbursable advances: 
Support  newly  created  enterprises  from  start-up  to development  phase  and  encourage  the 
setting-up  or  enlargement  of  20  investment  funds.  The  Commission  will  provide 
reimbursable advances to cover up to 50% of management costs during the first four  years. 
50  ECUS  could  be  invested  by  private  investors  for  one  ECU  spent  on  the  Community 
budget.  10 000 jobs could be created  in 5 years, many more after  ten years. 

(2)  EUROMANAGEMENT,  growth and internationalisation of SMEs: 
Specific objective,  target population  and performance  indicators: 
Selecting  and  training  at  European  level  of  50  organisations  to  apply  a  new  auditing 
methodology  on  a  sample  of  800  SMEs.  Based  on  the  current  EUROMANAGEMENT 
R&TD  II  initiative,  participating  SMEs  could  access  some  40 MECU  of  funding  from 
national  and  European  R&TD  programmes and an estimated  20 MECU of private finance. 
2 MECU  will  be used to pay  2.500  ECUS per  SME  (on  a 50% co-financing  basis  for  ten 
days  of  consultancy),  200 000  ECUS  for  the  seminars  plus  500 000  ECUS  for  the  co 
ordination. 

b)  Stimulate  management  training:  6MECU 

Training of intermediaries  for  Craft  and 
Small Enterprises on European  issues (1) 
Training for  Craft  and  Small  Enterprises on 
standardisation  and  certification  (2) 
TOTAL 

1997 
0,7 

1998 
0,8 

1999 
0,9 

2000 
0,8 

T O T AL 
3,2 

0,8 

1,5 

0,7 

1,5 

0,6 

1,5 

0,7 

1,5 

2,8 

6 

( I )  Training of intermediaries  for  Craft  and Small Enterprises on European  issues: 

Specific  objective,  target population  and performance  indicators:  improve  the  expertise 
of the craft  and  small enterprises  on European  issues by the selection  of  representatives  of 
the  European  organisation(s)  of craft  and  small  enterprises  and  universities  to develop  the 
appropriate  training  schemes  for  them  (training  seminars  of  3-5  days  in  the  respective 
countries  and a general  seminar  in Brussels). DG XXIII will cover  50% of the cost  for  the 
training  courses  and  finance  the  travelling  expenses  for  the  participants  of  the  Brussels 
seminar. 

(2)  Training of craft  and small enterprises on standardisation  and  certification: 

Specific  objective, 
target  population  and  performance  indicators:  to  improve  the 
competitiveness  of small  enterprises  and craft  enterprises through an audit to upgrade their 
performance.  This  action  will  concern  850  enterprises  from  industry,  services  and  craft 
sectors. 

12 

>1 

Promote  entrepreneurship  and  target  groups:  26,960  MECU 

a)  Craft and small enterprises: 12,250 MECU 

young 

between 

competitions 

Transnational 
co-operation 
craft  and  small enterprises (2) 
European  prize for craft  works 
for 
European 
craftsmen 
Joint  participation  in  fairs  in  the EU,  in 
assisted  countries  and  in  Mediterranean 
countries (3) 
Support  to NORMAPME 
European  network  of  organisations  for 
the development  of  certification 
Better  know  hew  and  improvement  of 
role of collaborating  spouse 
Quality  EUROMANAGEMENT  (1) 
3rd  and  4th  European  Conferences  on 
craft  and small  enterprises (4) 
TOTAL 

2000 
0,5 

T O T AL 
1,9 

1997 
0,4 

0,250 
0,1 

1998 
0,5 

-
0,1 

0,6 

1999 
0,5 

0,250 
0,1 

0,8 

-
0,1 

1 

0,2 
0,05 

0,4 
0,05 

0,4 
0,05 

0,6 
0,05 

0,05 

0,04 

0,03 

0.03 

-
0,6 

1.010 
-

1.070 
-

0,620 
0,8 

1,750 

3 

3,5 

4 

12,250 

0,5 
0.4 

2,4 

1.6 
0,2 

1,5 

2,7 
1,4 

(1)  Quality  EUROMANAGEMENT: 

Objective,  target population  and performance  indicators:  audit  of small  craft  enterprises 
with  regard  to applicable  nonns  and  regulations,  help  them  to overcome  the difficulties  of 
levelling their  performance. 

(2)  Transnational  co-operation between craft  and small  enterprises 

Objective, target population  and performance  indicators:  create  long-lasting  partnerships 
between  small  and craft  enterprises  in the EU, the EEA, the  PECO  and the  Mediterranean 
countries.  Co-operation  projects  could  be  developed  in  different  areas  such  as  the  search 
for  third  markets,  co-production.  A  call  for  tender  will  be  launched  and  the  Commission 
will  cover  up to 50% of the total  cost of each  project  up to a  maximum  of  20 000  ECUS. 
2 000 small and craft  enterprises will be concerned  by this action over the period. 

(3)  Joint  participation  in  fairs  in  the  European  Union,  in  assisted  countries  and  in  the 

Mediterranean  countries: 
Objective, target population and performance  indicators:  DG XXIII will  launch  a call  for 
tender  inviting  the  intermediaries  to  set  up joint  representation  stands  for  small  and  craft 
enterprises.  The  projects  should gather  at  least  5 enterprises  from  3 Member  States  of the 
EU or of the  EEA  in order to be eligible. Intermediaries  will  have  to  provide  assistance  to 
exhibitors during the fairs. 

(4)  3rd and 4th  European  Conferences  on craft  and small enterprises: 

Objective,  target  population  and  performance  indicators:  to  renew  to  dialogue  -  on 
specific  themes  - between  the  craftsmen  and  their  intermediaries  through  the  organisation 
in  1997 of 5 preparatory  symposiums  in close  co-operation  with  the  representative  bodies 
of  the  crafts  sector,  public  and  private  organisations,  governments  representatives, 
entrepreneurs  and  experts.  Nine  symposiums  will  be  organised  in  the  year  2000  in 
preparation  to the 4th  conference. 

-  13 

7^ 

b)  Enterprises  in commerce and distributive trades: 12 250 MECU 

Facilitate the adjustment  process  of commercial  enterprises  to the Single  Market  and  to the 
structural  changes, including new technologies (Commerce  2000) 
Promote co-operation  between  SMEs 
Disseminate  results of piiot  programmes 
Follow-up to Green  Paper on Commerce and  Distribution 

Statistics (1) 
Pilot actions  (2) 
Dissemination 
Panels 
Studies 
TOTAL 

1997 
0,5 
0,9 
0,1 
0,05 
0,2 
1,750 

1998 
0,6 
1,9 
0,150 
0,1 
0,250 
2 

1999 
0,7 
2,2 
0,2 
0,1 
0,3 
3,5 

2000 
0,7 
2,6 
0,225 
0,125 
0,350 
4 

T O T AL 
2,5 
7,6 
0,675 
0,375 
1,1 
12,250 

( 1 )  Improve statistics on enterprises  involved in Commerce - action mainly carried  out with  the 

Statistical  Office  of the EC (2.5 MECU). 

(2)  •  Extension  of the  range  of  the  Commerce  2000  pilot  actions  for  the  use  of  information 

technology  for the co-operation  between big enterprises and SMEs. 

•  Commerce and services: development  of partnerships  for  specialised  shops,  commercial 

centres and  implementation  of the single currency. 

•  Support  to local commerce 

c)  Actions  for women and young  entrepreneurs, minorities: 2,460 MECU 

i)  Actions  for  women  entrepreneurs  and collaborating  spouses:  (estimated  cost:  730 000 

ECUS). 

support  the  creation  of  enterprises  by  women  and  help  them  to  increase  their 
qualification:; 
facilitate the professional  recognition of collaborating women spouses. 

Women  entrepreneurs  represent  25%  of  the  -16  million  SMEs,  that  is  4  million 
enterprises. 
The  actions  will  also  aim  to  support  the  creation  of  European  networks  of  women 
entrepreneurs and collaborating spouses, 

ii)  Actions  in  favour  of  young  entrepreneurs,  particularly  in  the  start-up  phase  of  the 
enterprise  as  well  as  to  meet  specific  needs  such  as  the  use  by  young  people  of  new 
technologies  for the management  and the development  of SMEs. These actions  will be 
developed  in  close  co-operation  with  the  representative  organisations  which  arc 
currently  being  reinforced  and  represented  in  every  Member  State  (estimated  cost: 
730 000 ECUS), 

iii)  Studies  or  specific  support  for  events  gathering  women  entrepreneurs,  young 
representing  minorities  and  organised  on  a 

entrepreneurs  or  entrepreneurs 
transnational  basis within the EU (estimated cost:  1  MECU). 

14 

H 

SME  Policy  development  and  knowledge of SMEs: 23,35  MECU 

Knowledge of SMEs (1) 
Developing  and  evaluating  SME 
Policy actions  (2) 
Other  actions,  subventions 
publications  (3) 

1997 
1,1 
1.750 

1998 
1,5 
3,831 

1999 
1,6 
3,255 

2000 
1.7 
1,164 

T O T AL 
5,9 
10,000 

1,3 

1,6 

2,275 

2,275 

7,45 

(1)  The  statistical  efforts  made with the  Statistical  Office  of the  EC should  allow to  better  appreciate  the 
questions  relating  to  the  size  of  SMEs  as  well  as  to  their  creation,  development  and  economic 
importance (including statistics on co-operatives). 

(2)  Development  of  the  European  Observatory  for  SMEs:  the  works  of  this  observatory  allow  for  an 
academic  and  independent  analysis that  is based on a highly qualified  network.  The  financial  costs arc 
estimated  at  2 MECU per year based on a new call for tender and on former  experience. 
An  external  and  independent  evaluation  of  the  1997-2000  programme  (estimated  cost:  0,6  MECU) 
will  be carried  out as will  surveys  relating to the legal  programme  or the elaboration  of a database on 
the main  measures developed under the enterprise policy. 

(3)  These  are  general  subsidies  that  aim to support  a  large number  of  initiatives  in  favour  of  SMEs  and 
that  possess  a  transnational  character  (average  annual  cost  of  1  MECU).  Publication  of  documents 
relating to enterprise policy must also be considered  on this  credit  line  (average  cost  of 3 MECU  over 
the period). 

9..?  E VA L UA TION  OF  THE  OPERA  TION 

Performance  indicators selected: 

Evaluation  report to ensure that each action described  above corresponds  to the objectives  set out on 
the  basis  of  quantitative  criteria  (for  example:  number  of  questions  and  answers,  number  of  co 
operation  profiles, number of co-operation agreements). 

Details  and  frequency  of planned  evaluations: 

Article  6  of  the  draft  Council  Decision  foresees  that  the  Commission  presents  to  the  European 
Parliament  and  the  Economic  and  Social  Committee,  at  the  latest  by  end  March  2000,  an  external 
evaluation  report  on  the  application  of this  decision,  including  the  evaluation  of  the  cost/efficiency 
ratio, as well  as proposals that it will deem necessary in view of the evaluation  carried  out. 

15  -

> <" 

10.  A D M I N I S T R A T I VE  E X P E N D I T U R ES  (SECTION  III,  PART A OF  BUDGET) 

The  effective  mobilization  of  required  administrative  resources  will  depend  on  the  Commission's 
annual  decision  concerning  the  allocation  of  resources,  taking  into account  the  additional  staff  and 
amounts authorised  by the Budgetary Authority 

10.1.  EFFECT  ON  THE  NUMBER  OF  POSTS 

Type of post 

Officials  or 
temporary  staff 

Other  resources 
TOTAL 

Staff to be 
managing t 

assigned to 
le operation 

Permanent 
posts 
65 
21 
47 

A 
B 
C 

Temporary 
posts 
8 
5 

Source 

Duration 

Additional 
resources 

Existing 
resources 
73 
26 
47 

4 year 
programme 

133 

13 

146 

10.2.  OVERALL  FINANCIAL  IMPACT  OF ADDITIONAL  HUMAN  RESOURCES 

Amounts 

ECU 
Method of calculation 

Officials 
Temporary  staff 
Other  resources 

TOTAL 

11 

10.3.  OTHER  ADMINISTRATIVE  EXPENDITURE  RESULTING  FROM  THE 

OPERATION 

Budget  line (n° and heading) 
A-130  Missions 
A-250  Meetings 

A-2510  Meetings of Committees 
A-25 11 Meetings of Committees which 
have been established  through a 
Commission  Act 

A-260  Studies 

Amounts 
2 200 000 
1  320 000 
400 000 
520 000 

ECU 
Method  of calculation 
500 000/year+10% x 4 
300 000 /year  +10% x 4 
100 000 /year x 4 
130 000  /year x 4 

TOTAL  1  4 440 000 

[ 

->(o 

OTHER  RESOURCES  (INDICATIVE  AMOUNTS) 

INI'RA-MUROS  EIC/BC-NET/BRE  CONTRACTS 
(A  1178) 

ANNUAL COST (ECU) 
1998 

1999 

1997 

2000 

TOTAL 

A 
B 
C 

TOTAL 

4 
1 
4 

9 

720 000 

720 000 

720 000 

720 000 

2 880 000 

-" 

EXTRA-MUROS  EIC/BC-NET/BRE  CONTRA CTS 
(A  1178) 

ANNUAL COST (ECU) 
1998 

1999 

1997 

2000  | 

T O T AL 

A 
B 
C 

6.5 
1 
4 

TOTAL 

11,5 

1 150 000 

1 150 000 

1 150 000 

1 150 000 

4 600 00 

PRESTA TAIRE DE SERVICES CONTRACTS 

ANNUAL COST (ECU) 
1998 

1999 

1997 

2000 

T O T AL 

6,3 

6,3 

A 
B 
TOTAL 

TOTAL 

442 000 

442 000 

442 000 

442 000 

1 768 000 

TOTAL 

26,8 

2 312 000 

1997 

1998 
2 312 000 

1999 
2 312 000 

2000 
2 312 000 

TOTAL 
9 248 000 

17-

"1 

ISSN 0254-1475 

COM(96) 98  final 

DOCUMENTS 

EN 

08  04 

Catalogue number  : CB-CO-96-138-EN-C 

ISBN 92-78-01908-9 

Office  for Official  Publications of the European Communities 

L-2985  Luxembourg