Report from the Commission to the Council and the European Parliament on the implementation of the European Charter for Small Enterprises
Date: 2003-01-21
Institutions: European Commission
Subjects: EU Member State, European charter, Norway, administrative formalities, economic policy, entrepreneurship, small business, tax system

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 13.2.2003
COM(2003) 21 final/2

CORRIGENDUM
Annule et remplace les foot-notes 3, 7, 14
et 136 du document COM(2003)21 final du 21.1.2003
Concerne les versions FR, EN, DE

REPORT FROM THE COMMISSION
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

on the implementation of the European Charter for Small Enterprises

CONTENTS

I.

1.

2.

3.

4.

5.

6.

IS ANYBODY LISTENING TO SMALL BUSINESSES.......................................... 3

Keeping small businesses high on the agenda............................................................. 3

Listening to small businesses ...................................................................................... 3

Learning from each other ............................................................................................ 4

Bridging the performance gap ..................................................................................... 4

Concentrating on key areas ......................................................................................... 4

Sharing responsibility.................................................................................................. 5

II. WHERE WE ARE AND WHAT SHOULD BE DONE NEXT ................................ 7

III. WHAT WE HAVE ACHIEVED................................................................................ 13

Introduction

1.

2.

3.

4.

5.

6.

7.

8.

9.

Education and training for entrepreneurship ............................................................. 14

Cheaper and faster start-up........................................................................................ 18

Better legislation and regulation................................................................................ 20

Availability of skills .................................................................................................. 23

Improving online access ............................................................................................ 26

More out of the Single Market .................................................................................. 28

Taxation and financial matters .................................................................................. 31

Strengthen the technological capacity of small enterprises....................................... 36

Successful e-business models and top-class small business support......................... 39

10.

Develop stronger, more effective representation of small enterprises’ interests at

Union and national level ......................................................................................... 42

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I.

1.

IS ANYBODY LISTENING TO SMALL BUSINESSES?

Keeping small businesses high on the agenda

Two  and  half  years  since  the  European  Charter  for  Small  Enterprises  was  endorsed  by  the
Heads  of  State  or  Government  in  Santa  Maria  da  Feira  in  June  20001,  progress  towards
meeting  its  recommendations  is  encouraging.  But  is  the  EU  still  living  up  to  its  Charter
commitments?

The Charter commitments embody the “Think Small First” principle and the recognition that
small enterprises are the backbone of Europe’s economy and the key to our competitiveness.
This  is  why  the  Charter  is  central  to  achieving  the  Lisbon  objective  of  making  Europe  the
world’s  most  competitive  and  dynamic  knowledge-based  economy.  Keeping 
these
commitments alive is fundamental.

The  Conference  of  Ministers  responsible  for  SMEs  organised  by  the  Spanish  Presidency  in
February 2002 in Aranjuez contributed greatly to keeping up the momentum. The Barcelona
European Council’s2 request that Member States speed up the implementation of the Charter
gave a further boost to the Charter process.

The Charter is expanding its influence. Following its endorsement by the candidate countries
in April 2002 in Maribor3, the Charter has become the cornerstone of small business policy in
the future enlarged Europe. It will be up to the Member States to lead by example.

Most measures do not produce visible short-term results and progress in all areas  cannot be
fully assessed on a yearly basis. Nor should Member States strive to launch a great number of
annual measures. Consolidation and improvement of existing measures is equally important.
Administrations  cannot  do  everything  at  once.  Focused  efforts  can  make  real  progress.
Building on achievements and concentrating on a few areas at a time is better than doing too
little on all fronts.

Voluntary  quantitative  targets  in  enterprise  policy  can  help  Member  States  concentrate
attention on key issues and measure progress. The targets declared by the Member States in
2002 are an encouraging step in this direction4.

2.

Listening to small businesses

Last  year’s  Charter  implementation report5  emphasised  the  need  for  better  representation  of
small business’ interests. It also underlined that if governments did not think small first, they
might never think small at all.

1

2

3

4

5

Annex III of the conclusions of the  Santa Maria da Feira European Council of 19-20 June 2000. The
Charter  requests  the  Commission  to  present  an  annual  implementation  report  to  the  Spring  European
Council.
Presidency conclusions of the Barcelona European Council of 15-16 March 2002 point 15.
Progress by the candidate countries  is  analysed  in  the  Report  on  the  implementation  of  the  European
Charter  for  Small  Enterprises  in  the  candidate  countries  to  accession  to  the  EU,  SEC(2003)57  of
21.1.2003
“Quantitative Targets in Enterprise Policy: Steps towards  the  Lisbon  objectives”,  SEC(2002)  1214  of
7.11.2002.
Report  from  the  Commission  to  the  Council  and  the  European  Parliament,  Report  on  the
implementation of the European Charter for Small Enterprises, COM(2002) 68 final of 6.2.2002.

3

                                                
Is anybody listening to small businesses then? The answer is yes. There are a few impressive
measures  in  Member  States  such  as  Denmark,  Sweden,  Finland  and  the  UK,  which  could
inspire  other  countries.  However,  there  is  still  a  dividing  line  between  those  few  Member
States that systematically consult small business on legislation and policy making and those
which  do  not.  Several  Member  States  still  provide  no  opportunities  for  small  businesses  to
express their interests. Very little progress has been reported in this area in the past year. How
are Member States going to think small first if they are not listening to small businesses?

Small businesses represent the vast majority of businesses in Europe. Member States and the
Commission have to speak to small businesses first, to be able to think small. Otherwise, the
voice of the bulk of European business is lost. The Commission is committed to involving all
stakeholders in legislation and policy making from an early stage.

3.

Learning from each other

Member States increasingly look for solutions found elsewhere in Europe. The current report
shows  that  Member  States  are  starting  to  learn  from  each  other  and  to  exchange  good
practices  amongst  themselves.  A  growing  number  of  Member  States  demonstrate  the
influence of other countries’ ideas in shaping national policy measures. This is real progress.

For  example,  Sweden  created  a  loan  guarantee  scheme  for  SMEs  inspired  by  practices
developed in the Netherlands  and Finland. Belgium took inspiration from Denmark, France,
the  Netherlands  and  Austria  on  cluster  policy.  Denmark  developed  a  web  site  to  register
companies on-line inspired by the results of a Best Procedure project.

This  emerging  trend  should  be  encouraged  further.  The  Commission  is  continuing  to  push
ahead with this process of learning from good practices, which is now starting to bear fruit.

4.

Bridging the performance gap

Exchange of good practice is the best way to prevent wide performance gaps in Europe. Small
businesses  should  find  a  favourable  environment  anywhere  in  the  EU.  Member  States  are
starting  to learn  from one  another, but  performances  remain  uneven  across  the  EU.  Are  the
best getting better and the worse not progressing?

For example, registering a company on-line is already possible  in  some  Member States, but
others  keep  struggling  with  lengthy  and  complex  start-up  procedures.  Some  Member  States
offer small businesses the opportunity to complete different obligations on line, while others
are only now starting to put forms on line.

5.

Concentrating on key areas

Education  and  better  regulation  are  clearly  two  areas  where  governments  have  stepped  up
their efforts considerably. This report presents plenty of examples of progress.

The Charter  emphasises that  entrepreneurial skills must be  nurtured  from an early age.  One
year  ago,  only  two  Member  States  reported  initiatives  to  support  entrepreneurial  skills  in
primary schools. Today, at least five countries are carrying out measures in primary schools,
and more is in the pipeline. Several new measures targeting secondary schools were launched.
Europe is finally on the verge of becoming entrepreneurial.

The national governments as well as the Commission are committed to reducing burdens on
businesses. Member States report on an array of different legislative measures ranging from
consolidation  and  simplification  of  legislation,  to  the  development  of  regulatory  impact

4

assessment systems. Also the Commission is concentrating on this area, with the new Action
Plan on simplifying and improving the regulatory environment.

6.

Sharing responsibility

The  European  Parliament  has  stated  that  “the  responsibility  for  implementing  nearly  all  the
action points in the Charter lies with the Member States”6. The environment in which small
businesses operate is in  fact mostly determined under Member States’ competence.  For  this
reason,  the  report  draws  conclusions  mainly  on  Member  States’  progress,  while  also
highlighting progress by the Commission7.

Business  organisations  are  increasingly  involved  in  the  Charter  process.  They  have  an
important  role  to  play  in  highlighting  the  real  problems,  in  ascertaining  the  impact  of
measures and in disseminating good practices. Involving more countries and stakeholders in
the  Charter  process  requires  efforts  to  be  systematised  and  synergies  to  be  built.  The
Commission is committed to taking up this challenge.

The European Parliament and the European Economic  and Social Committee’s commitment
to ensuring  that  the  Charter  is  implemented  in  full  has  greatly  contributed  to  keeping  small
business high on the agenda.

The  Commission  has  taken  note  of  two  Parliament  Resolutions  asking  the  Council  to  give
“legal weight” to the Charter8. However, most Charter areas fall under the competence of the
Member States. The Charter itself is part of the “Open Method of Co-ordination” of Member
States’ policies, which responds to a request of the Lisbon European Council.

The European Parliament and the Economic and Social Committee9 have also asked for a new
Multiannual  plan  of  action  to  implement  the  Charter.  The  Commission  is  committed  to
fulfilling  its  most  important  role  under  the  Charter:  to  work  in  close  co-operation  with  the
Member States to help them improve the business environment for small businesses. For this
purpose, the Commission has a range of different policy measures including the Multiannual
Programme for Enterprise and Entrepreneurship and its financial instruments, which are very
closely  linked  to  the  Charter  objectives.  In  addition,  the  Commission  is  using  its  Treaty
powers to improve EU legislation.

Building on the results of these  efforts  and  on  the well-established Charter process, a  wider
debate is being launched by the Commission Green Paper on entrepreneurship, which raises
questions on how to “produce” more entrepreneurs and how to get firms to grow in Europe.
The follow-up to the Green Paper should contribute to the objectives of the European Charter
for Small Enterprises.

***

6

7

8

9

European Parliament Resolution of 20 March 2002 on the results of the Barcelona European Council.
A  detailed  description  of  Commission  measures  can  be  found  in  the  report  on  “Creating  an
entrepreneurial Europe: The activities of the European Union  for  small  and  medium-sized  enterprises
(SMEs)”, SEC(2003)58 of 21.1.2003 which constitutes a supporting document to the present report.
EP Resolution on the Commission Communication “Sustaining the Commitments, increasing the pace”
of  13.6.2002  and  EP  Resolution  on  the  Commission  Report  “Growth  and  Employment  Initiative”  of
10.10.2002.
Economic and Social Committee’s second opinion on the European Charter  for Small Enterprises, 28
November 2001.

5

                                                
The present document aims to provide a brief overview of the main measures undertaken by
the Member States, Norway and the Commission to implement the Charter in the past  year.
As such, it seeks to identify strengths and weaknesses across the European Union, to highlight
promising national measures and to issue recommendations for future action.

This report aims to keep the momentum going and to stimulate exchange of experience and
good practice between Member States.

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II.

WHERE WE ARE AND WHAT SHOULD BE DONE NEXT

Progress achieved since last year’s report is encouraging. A success story in itself is Member
States’  growing  exchange  of  good  practices.  However,  the  pace  of  reform  needs  to  be
accelerated.  In  this  respect,  Member  States  are  invited  to  concentrate  on  consolidation  and
improvement of existing measures, rather than launching a large number of initiatives every
year. While it is difficult to assess progress on all the areas on an annual basis, the main trends
are  outlined  below.  The  current  overview,  as  well  as  the  detailed  description  in  part III,
represent 
information
communicated by the Member States.

the  Commission’s  understanding  of 

the  situation  based  on 

1.

Education and training for entrepreneurship

Member States are increasingly aware of the need to promote entrepreneurship in education
and  have  launched  a  considerable  number  of  initiatives  in  this  area.  Ireland,  Finland,
Sweden,  the  UK  and  Norway  have  developed  new  initiatives,  following  last  report’s
recommendations,  to  nurture  entrepreneurial  skills  in  primary  schools.  Countries  such  as
Belgium, Denmark, Greece, Ireland, Luxembourg, Sweden and the UK stepped up their
efforts in secondary schools. The real impact of these measures is however difficult to assess.

Member  States  are  urged  to  take  further  action  to  promote  entrepreneurial  skills  in
primary  and  secondary  schools.  The  measures  highlighted  in  this  report  and  those
the  Best  Procedure  project  on  Education  and  Training  for
analysed 
entrepreneurship should provide inspiration. Given the time lag for visible results to
emerge, action is urgently needed.

in 

There is progress in training for entrepreneurship, but this is an area where all Member States
should  improve.  Most  pilot  initiatives  are  limited  in  scope,  addressing  training  in  a  very
specific  sector  or  region.  Initiatives  targeted  at  entrepreneurs  of  micro  or  small  companies,
such as those developed in Greece and Portugal, are particularly welcome.

Member States are encouraged to further consolidate and expand training strategies
for small business managers.

The  Commission  is  committed  to  continue  supporting  Member  States’  efforts  to  promote
entrepreneurship.

2.

Cheaper and faster start-up

Following  last  year’s  remarkable  progress  in  reducing  the  time  and  cost  of  creating  a
company, many Member States are now building on their achievements. On-line registration
is becoming a reality in Denmark, Sweden, Norway and Austria. Also Spain and France
are working towards this target. However, the performance gap is widening across the EU. At
a time when on-line registration is becoming available in some Member States, others are still
struggling with reducing lengthy start-up procedures.

Member  States  are  invited  to  progress  towards  on-line  registration  by  taking
inspiration  from  the  above-mentioned  Member  States.  There  is  much  scope  for
exchange of good practice in this area.

Member States with high registration costs are urgently invited to reduce them.

7

Member States should further simplify and speed up procedures to bring the average
time taken to start-up a company closer to the minimum time required.

3.

Better legislation and regulation

All  governments  are  committed  to  improving  and  simplifying  regulation  and  progress
achieved since last year’s report is encouraging. There is a growing awareness of the need to
reduce  administrative  burdens  on  businesses.  In  addition,  several  Member  States  are  in  the
process of revising their bankruptcy laws.

Member  States  are  invited  to  adopt  provisions  facilitating  a  second  start  after
bankruptcy.  Member States –  in  particular those currently revising  their  insolvency
laws - are encouraged to exchange experience and good practices in the framework
of the Best Procedure project on bankruptcy and a fresh start.

Measures by some Member States to introduce Regulatory Impact Assessment (RIA) systems
are welcome and timely. However, at a  time when  some  Member States such as Denmark,
Sweden and the UK are revising the RIA systems they have had for some years, others still
do not seem to use regulatory impact assessments before adopting legislation.

Member  States  are  urged  to  introduce  systematic  regulatory  impact  assessment
systems and to involve small businesses in the drafting of legislation from an early
stage. Regular systems to consult small businesses prior to the adoption of relevant
legislation should be created.

Efforts  to  repeal  redundant  legislation  and  to  consolidate  legislation  should  be
continued.

The  Commission  puts  a  strong  emphasis  on  improving  the  quality  of  legislation  and  on
measuring  the  potential  impact  of  legislation  on  small  businesses.  The  Action  Plan  on
simplifying and improving the  regulatory  environment provides  an ambitious programme to
this end.

4.

Availability of skills

Small and micro enterprises increasingly consider lack of skilled labour as a major hindrance.
Over 20 % of micro enterprises and almost 30 % of small enterprises see this as their number
one constraint10. While Europe is still failing to address its skills gap, since last year’s report,
a number of initiatives show that some Member States such as Germany, Ireland and Italy
are increasingly aware of this gap and of the need to adopt appropriate measures.

All  Member  States  are  invited  to  step  up  efforts  to  systematically  identify  and
address skills gaps.

New  initiatives  to  develop  links  between  universities  and  businesses  are  welcome
and should be continued.

10

The number of micro enterprises considering lack of skilled labour as a major constraint has increased
by  150  %  from  1999  to  2001.  Source:  Observatory  of  European  SMEs  2002/1  “Highlights  from  the
2001 Survey”.

8

                                                
The  Commission  is  committed  to  supporting  Member  States’  efforts  to  bridge  skills  gap  in
Europe,  through  the  implementation  of  the  European  Employment  Strategy  and  the  Action
Plan for Skills and Mobility.

5.

Improving online access

Significant progress has been made in eGovernment and all Member States are committed to
improving their performance. However, there seems to be a widening performance gap in this
area. At a time when, in a group of Member States, several procedures can be completed on-
line, another group is taking the first steps to make basic information and forms available on
the web. Even in the most e-friendly Member States, the use of some eGovernment facilities
is  falling  below  expectations,  which  may  indicate  the  need  to  further  market  such  facilities
and to strengthen business confidence in them.

There  is  scope  for  the  group  of  Member  States  taking  their  first  steps  in
eGovernment to take inspiration from the services offered by several Member States
including  Ireland  and  Sweden.  Attention  should  be  given  to  streamlining
information on web portals that provide a single access point to different services.

eGovernment  should  make  life  easier  for  small  businesses.  Providing  information
and  administrative  forms  on-line  is  an  opportunity  to  further  simplify  procedures.
There is still plenty of room for progress in this area.

The Commission is committed to increasing its use of the Internet as a means for interactive
and  efficient  communication  with  stakeholders.  Newly  created  on-line  consultation
mechanisms are a step in this direction.

6.

More out of the Single Market

The  Internal  Market  is  now  over  10  years  old  and  has  helped  EU  companies  operate  in  an
increasingly open and transparent European market. The Internal Market where goods, services
and capital flow freely is a cornerstone of the EU and provides the legislative framework which
allows business to take place across national borders unhindered by barriers. However, in certain
areas  such  as  services,  a  true  Internal  Market  is  far  from  a  reality.  Efforts  to  ensure  an
effective and timely transposition of internal market legislation must continue. Two thirds of
Member  States  –  all  but  Denmark,  the  Netherlands,  Finland,  Sweden  and  the  UK  -
currently fail to meet the 1.5 % transposition target. In addition, the transposition has further
slowed  down  throughout  2002.  Only  Finland  fully  complies  with  the  new  target  set  out  in
Barcelona.

Half of the Member States will have to transpose more than 50 pieces of legislation
to  comply  with  the  1.5  %  target  by  spring  2003.  This  requires  drastic  action,  in
particular for Member States furthest away from meeting this target.

Member States are reminded of the new target set at the Barcelona European Council
of full implementation of all Directives more than two years overdue by spring 2003.

Member States are requested to remove barriers to the Internal Market and to ensure
that new barriers are not created by national legal and administrative measures.

The  Commission,  in  its  role  as  Guardian  of  the  Treaty,  is  committed  to  ensuring  the  free
movement of goods, services, capital and persons and to improving the control of application
of Community law.

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7.

Taxation and financial matters

Measures to alleviate the tax burdens for small business in some countries such as Belgium,
Denmark, Ireland and the UK are welcome and could set an example of good practice.

Member  States  are  invited  to  look  at  examples  of  good  practice  to  alleviate  tax
burdens  for  small  businesses,  in  order  to  further  encourage  start-ups,  help  small
businesses grow and facilitate the succession of enterprises.

Access to finance remains an important constraint to businesses across the EU. The creation
of  flexible  micro-loans  by  Germany,  Spain  and  Sweden  is  encouraging.  These  loans  are
particularly  helpful  to  encourage  start-ups  and  to  provide  an  opportunity  for  the  smallest
enterprises to grow.

Member States are invited to further support financing institutions to improve small
businesses’ access to  finance,  in  particular  to  micro loans, in accordance  with  their
national environment.

Member States are urged to implement the necessary fiscal and structural reforms to
promote  investment  in  venture  capital  funds  as  recommended  in  the  framework  of
the Financial Services Action Plan.

Business angels constitute an increasingly important source of financing for small businesses.

Member States are encouraged to raise awareness about business angels, to promote
a  fiscal  environment  favourable  to  risky  investments  in  small  businesses  and  to
support local and regional business angels’ networks.

Very little has been reported about personal performance incentives in small businesses (e.g.
employees’  stock  options  or  bonuses)  which  raises  the  question  of  whether  or  not  there  is
progress in this area. Such measures could help small businesses attract qualified personnel.

Member  States  are  invited  to  address  further  the  area  of  rewarding  personal
performance.

The  Commission  is  engaged  in  many  different  initiatives  in  financial  matters,  ranging  from
studies to action plans, financial instruments, and projects to exchange good practices. This is
also the case in the Member States. Efforts in this area are now starting to bear fruit.

8.

Strengthen the technological capacity of small enterprises

Recent  developments  in  promoting  clusters  and  technology  networks  involving  small  and
medium-sized enterprises are encouraging: various promising initiatives have been launched
particularly  in  Denmark,  Germany,  Greece,  Ireland  and  Austria.  Member  States  are
committed to promoting technology dissemination and its  commercial  exploitation. There is
plenty of scope for exchange of good practice in areas such as promoting technology transfer
from university to small businesses and supporting innovation both in technology-based small
businesses and also in the more traditional sectors.

Member  States  are  invited  to  contribute  actively  to  the  Best  Procedure  project  on
improving technology transfer institutions.

10

Member States are encouraged to further develop technology clusters and enterprise
networks at national and regional level. Such measures should be implemented with
a long-term perspective to ensure effective results.

9.

Successful e-business models and top-class small business support

While small companies are increasingly using the Internet, they still hesitate to trade on-line
and  to  change  their  business  processes  to  gain  maximum  benefits  from  new  technologies.
Specific measures to help micro and small business to use e-business, like those developed in
countries such as Ireland, Spain, the Netherlands and the UK, are welcome. There is a risk
of  a  growing  performance  gap  in  the  EU  and  a  large  scope  for  further  exchange  of  good
practice.

Member States are urged to continue efforts to help small businesses make efficient
use  of  e-business  practices  and  to  take  inspiration  from  good  practices  analysed  in
the  context  of  the  Best  Procedure  project  on  policies  in  support  of  e-business  for
SMEs.

There  is  an  increasing  awareness  of  the  need  to  provide  professional,  business-friendly  and
tailor-made  services  to  businesses  at  regional  and  local  level.  Some  Member  States  are
developing services especially for the needs of enterprises in certain regions.

Member States are invited to further streamline support services, to advertise them to
small businesses  and to  regularly evaluate  their  effectiveness.  Efforts  to  make  such
support services increasingly client-oriented should be sustained.

While  an  increasing  number  of  “advisory”  services  are  delivered  on-line,  support
services  targeted  at  the  smallest  enterprises  should  still  be  delivered  in  parallel
through more traditional channels such as “guichets”.

The Commission considers the development  of  e-business  as  an  important  political priority.
The  Commission  has  namely  launched  a  “European  e-business  support  network  for  SMEs”
with a view to strengthening actions in support of SMEs in this field.

10.

Develop stronger, more effective representation of small enterprises’ interests at
Union and national level

The current report reiterates and underlines last year’s conclusion that regular consultation of
small  businesses  in  legislation  and  policy  making  remains  weak  across  the  EU.  Very  few
Member  States  have  reported  developments  in  this  field.  Once  more,  performance  remains
rather uneven. While for example in Finland business organisations participate in committees
drafting legislation, in other Member States  there  seems to be no systematic consultation of
businesses  prior  to  the  adoption  of  legislation.  Denmark,  Finland,  Sweden,  the  UK  and
Norway are leading as regards systematic consultation of small businesses. Also Germany,
Spain,  Luxembourg  and  Austria  consult  business  organisations  -  including  chambers  of
commerce – before adopting legislation.

Member  States  are  urgently  recommended  to  provide  opportunities  for  small
businesses  to  voice  their  interests  in  legislation  and  policy  making.  This  should  be
done in a systematic way.

11

The Commission is committed to improving dialogue  with small  businesses.  Measures such
as the appointment of the SME Envoy, on-line consultation systems and an increasing number
of meetings with stakeholders point to progress in this direction.

12

III.

WHAT WE HAVE ACHIEVED

Introduction

Part III  of  the  present  report  aims  to  provide  a  brief  overview  of  the  main  measures
undertaken by the Member States, Norway and the Commission to implement the Charter in
the past year. Norway accepted an invitation from the Commission to take part in the Charter
process. The other members of the European Economic Area, Iceland and Liechtenstein have
not expressed a desire to participate. Following the adoption of the Charter by  all candidate
countries in April 2002, their progress is analysed in a separate report11.

The present report mainly covers the period autumn 2001 to autumn 2002, but given the long-
term span of most measures, a certain overlap between annual reports is inevitable.

For  reasons  related  to  its  purpose  and  length,  part III  does  not  present  an  exhaustive  or
detailed  list  of  measures.  Detailed  descriptions  of  national  measures  can  be  found  in  the
national  reports  published  on  the  Commission  website12,  and  in  a  web-based  Directory  of
measures13. A detailed description of Commission measures can be found in the “Report on
the  activities  of  the  European  Union  for  small  and  medium-sized  enterprises”14,  which
constitutes a supporting document to the present report.

Considering the Charter’s commitment of using “effective indicators to assess progress over
time”,  part III  emphasises  the  relevant  voluntary  quantitative  targets  in  enterprise  policy
declared  by  the  Member  States  in  200215.  These  stem  from  Member  States’  agreement  on
enterprise policy indicators closely linked to the Charter recommendations.

The  analysis  of  progress  in  the  Member  States  and  Norway  is  based  on  detailed  national
reports,  and  on  bilateral  meetings  between  the  Commission  and  national  authorities  which
took place in June-September 2002. For the first time, national business organisations actively
participated  and  expressed  their  views  at  all  bilateral  meetings.  An  Internet  consultation  on
national reports was open to all interested parties and announced at a meeting with European
business organisations in September16. At Commission level, an inter-service group bringing
together all services with activities for small and medium sized enterprises has prepared the
analysis on Commission progress.

The  current  report  presents  more  in  detail  the  two  areas  “Education  and  training  for
entrepreneurship”  and  “better  regulation”,  where  most  Member  States  have  considerably

11

12

13

14

15 

16 

the  Directory  of  measures 

favour  of  entrepreneurship  and  Competitiveness,  see

Report  on  the  on  the  implementation  of  the  European  Charter  for  Small  Enterprises  in  the  candidate
countries to accession to the EU of 21.1.2003.
For the complete reports, see
http://europa.eu.int/comm/enterprise/enterprise_policy/charter/charter2003.htm
For 
in 
http://europa.eu.int/comm/enterprise/enterprise_policy/charter_directory/index.htm
“Creating an entrepreneurial Europe: The activities of the European Union for small and medium-sized
enterprises (SMEs)”, SEC(2003) 58 of 21.1.2003
“Quantitative Targets in Enterprise Policy: Steps towards  the  Lisbon  objectives”,  SEC(2002)  1214  of
7.11.2002.
See  consultation  at  http://europa.eu.int/comm/enterprise/enterprise_policy/  charter/charter2003.htm.
The  following  business  organisations  provided  comments,  also  published  at  this  site:  Fédération
Française  des  Centres  de  Gestion  et  d’Economie  de  l’Artisanat,  Confcommercio,  Confederazione
Nazionale  dell’Artigianato  e  della  piccola  e  Media  Impresa  (CNA),  Chambre  de  Métiers  APCM,
European Association of Public Banks and Confédération générale des petites et moyennes entreprises.

13

                                                
stepped  up  their  efforts.  The  Commission  has  been  particularly  active  in  the  latter.  Most
Member States focus their own national reports on these  areas, which were also extensively
discussed at the bilateral meetings.

While  this  report  clearly  identifies  measures  targeted  specifically  at  micro  or  small
enterprises,  many  of  the  initiatives  analysed  have  been  designed  to  support  both  small  and
medium-sized  enterprises.  The  Commission  considers  that,  even  if  these  measures  do  not
exclusively target enterprises with less than fifty employees, this does not diminish their value
or impact on small businesses. Both the Commission and the Member States  have  therefore
adopted the approach of including in the current report all initiatives with an impact on small
and  medium-sized  enterprises,  while  highlighting  those  measures  that  seem  to  have  the
strongest impact on small enterprises.

Finally,  this  report  seeks  to  stimulate  the  exchange  of  experiences  and  good  practice  in
Europe17.

1

Education and training for entrepreneurship

“Europe  will  nurture  entrepreneurial  spirit  and  new  skills  from  an  early  age.
General  knowledge  about  business  and  entrepreneurship  needs  to  be  taught  at  all
school  levels.  Specific  business-related  modules  should  be  made  an  essential
ingredient of education schemes at secondary level and at colleges and universities.

We  will  encourage  and  promote  youngsters’  entrepreneurial  endeavours,  and
develop appropriate training schemes for managers in small enterprises.”

Member States

Member  States  are  increasingly  giving  priority  to  the  promotion  of  entrepreneurship  in  the
education  system.  Various  new  measures  have  been  launched  since  the  last  report,  while
previous initiatives start to bear fruit. Several Member States have now developed initiatives
to  nurture  entrepreneurial  spirit  and  skills  in  primary  schools,  following  from  last  report’s
conclusion that more needs to be done to nurture such skills from an early age.

In Ireland, the “Bí Gnóthach” initiative for 10-12 year-olds integrates skill development and
enterprise perspective into the curriculum, and the “Junior Achievement” programme for 5-18
year-olds helps students understand the world of work.

In Finland, the theme “participatory citizenship and entrepreneurship” is being integrated into
the  curricula  of  basic  education,  and  a  new  steering  group  aims  to  further  develop
entrepreneurship in education.

Sweden  is preparing the  “Municipal  Entrepreneur and Technology Centres”  (operational  in
first quarter of 2003), which aims to help encourage  future  engineers  and  inventors  through
enjoyable activities with technology, targeted at children over 10 (mainly girls).

17 

A  national initiative can only be considered a true “good practice” if it is entirely in conformity  with
relevant  Community legislation, including competition and state aid rules. Identification of  individual
initiatives in this Report does not of itself imply that the measures concerned are compatible  with the
relevant provisions of the Treaty.

14

                                                
The  “Schools  Enterprise  Programme”  in  Scotland  in  the  UK18  now  helps  over  400  000
primary school pupils in over 2 000 schools to develop work place skills. Finally, Norway has
developed teaching material to stimulate creativity in primary schools.

Measures targeted at secondary schools were stepped up in a number of Member States and a
wide range of recent or planned measures have been reported.

In  Ireland,  the  new  “Enterprise  Encounter  programme”  launched  in  December 2001,
provides  students  with  the  opportunity  to  interact  with  entrepreneurs.  The  programme  is
linked  to  the  “Leaving  certificate  vocational  programme”  in  secondary  schools,  which
includes  subjects  such  as  “enterprise  education”  and  “preparation  for  the  world  of  work”.
Also  the  one-year  “Transition  Year  Programme”  and  the  two-year  “Leaving  Certificate
Applied” seek to teach entrepreneurial skills and assist students in managing mini-companies.

Belgium is planning to publish a “novel” to teach 12-14  year-olds to start up a  company in
the context of its action plan “Plan 4X4 pour entreprendre”.

Luxembourg developed the “girls’ day” initiative to attract female students to the world of
work, and to technology-related activities in particular, through organised visits to enterprises.

Wales  in  the  UK  developed  the  “Enterprise  insight  Cymru”  project,  which  takes  company
representatives to schools to teach students about business in the real world.

In addition, Denmark is launching awareness-raising campaigns targeted at upper secondary
schools  in  2002-4,  and  Greece  produced  material  for  courses  in  entrepreneurship  and  the
“Entrepreneurship for the Youth” programme. Finally, Sweden launched a project to develop
an entrepreneurial way of thinking in upper secondary schools. Programmes to help students
create  a  mini-company  are  currently  operational  in  several  countries  including  Belgium19,
Germany20, Spain21, Italy22, Luxembourg23, the Netherlands24, Austria25 and also Norway26.

Improving  teachers’  “entrepreneurial”  knowledge  is  an  underlying  concern  in  measures
underway  in  Denmark,  France,  Finland,  UK  and  Norway.  Finland  launched  a  project  to
upgrade teachers’ skills and to promote cooperation between teachers and entrepreneurs.

There  seems  to  be  a  wide  range  of  courses  at  different  levels  available  at  universities  and
higher education establishments in countries such as Greece, Spain, France, Ireland, Austria,

18 
19 

20 

21 
22 
23 

24 
25 
26  

This measure was already reported upon in the UK’s 2001 report.
Belgium: “Small business projects” in Flanders. Source: Belgium’s national report on the Charter. All
national reports are available at
http://europa.eu.int/comm/enterprise/enterprise_policy/charter/charter2003.htm
Germany:  200  mini-enterprises  were  set  up  by  2  500  students  in  2002  within  the  “Junior  project”.
Source: Germany’s national report on the Charter.
Spain: SEFED programme. Source: Spain’s national report on the Charter.
Italy: Network of virtual enterprises. Source: Italy’s national report on the Charter.
Luxembourg: measure “Esprit d’entreprise” for 16-25 year-olds. Source: Luxembourg’s national report
on the Charter.
Company programme of YE Netherlands. Source: The Netherlands’ national report on the Charter.
Austria: "JUNIOR - Pupils create businesses" project. Source: Austria’s national report on the Charter.
Norway: “Company programme”, 850 enterprises set up by 6 000 students in 2002. Source: Norway’s
national report on the Charter.

15

                                                
Portugal, Finland, Sweden27 and Norway. In France, a European summer university course on
Entrepreneurship took place in September 2002.

Measures  to  foster  closer  relations  between  research  centres  and  businesses  are  being
developed inter alia in Denmark and Germany. In order to raise awareness about a career as
its
an  entrepreneur  and 
“entrepreneurship centres”, and Austria developed the “UNIUN 2002-4” programme28.

to  help  students  start  a  business,  Greece 

is  expanding 

Measures  targeting  all  levels  of  education  include  the  Dutch  “Entrepreneurship  and
Education”  scheme,  which  aims  to  develop  teaching  methods  from  primary  schools  to
university.

Austria  launched  two  measures  to  promote  business  awareness  from  primary  schools  to
university:  the  education  cluster  initiative  (“Initiative  Bildungscluster”)  creating  regional
partnership  offices  bringing  together  businesses  and  educational  establishments,  and  the
training  for  entrepreneurship  initiative  (“Unternehmen-Bildung  Initiative”),  which  includes
presentations in schools by company directors.

Competitions  to  reward  the  creation  of  best  business  plans  were  launched  or  further
developed  in  a  number  of  Member  States.  These  include  the  business  plan  competition
(“Ondernemersplanwedstrijd”) in Belgium, the “1,2,3 Go” in Belgium and Luxembourg, the
“Venture 2002” in Greece, the “Venture Cup” in Sweden and the “Europrise” in Norway. In
addition,  France  created  the  award  “jeunes  créateurs  de  demain"  to  help  15-25  years  old
develop  business  ideas,  while  the  UK’s  “New  Entrepreneur  Scholarships”29  supported  200
young potential entrepreneurs from deprived areas from September 2001 to March 2002.

Positive  developments  in  training  for  entrepreneurs  have  come  to  light  since  last  year’s
report. Training measures targeted specifically at small enterprises included the following.

Greece  launched  training  programmes  co-sponsored  by  the  European  Social  Fund  (ESF),
including training schemes targeting 11 000 micro enterprises and the self-employed, which
are delivered by the Centers for Vocational Training (“KEK”).

Portugal launched the “GERIR” programme 2002-2004 to provide training to approximately
300 micro and small enterprises in Trade, Industry, Services and Construction.

The UK created the “Small Firms Development Account” to finance training in small firms.

Measures  to  support  training  on  how  to  start  a  business  include  Belgium’s  “Chèque
formation  à  la  création  d’entreprise”  in  the  Walloon  region,  and  upper  Austria’s  education
account (“Bildungskonto für Jungunternehmer”). In addition, Germany launched a campaign
on upgrading skills and Spain developed the “CRECE” programme 2001-2006 co-financed by
the ESF to  train over 10 000  entrepreneurs in traditional  sectors.  Ireland  launched  the  2002
“Excellerator” programme to train managers in export-focused firms with over 15 people, and
Finland  developed  the  “well-being  at  work”  programme  to  promote  on-the-job  learning.

27 

28 

29 

Sweden  has  a  specific  postgraduate  in  Polytechnics  on  “SME  Entrepreneurship”.  Source:  Sweden’s
national report on the Charter.
Austria developed this programme on the basis of the previous UNIUN 1999-2001 programme. Source:
Austria’s national report on the Charter.
This measure was already reported upon in the UK’s 2001 report.

16

                                                
Projects  to  support  entrepreneurship  for  women  were  developed  in  Germany30,  Greece,
Ireland and Wales in the UK.

In order  to  further  promote  and support entrepreneurship,  a  number  of  Member  States  have
adopted general policy programmes.

This  is  the  case  in  Belgium’s  action  plan  “Plan  “4x4  pour  entreprendre”  in  the  Walloon
region,  which 
towards
entrepreneurship.

initiative  and  positive  attitudes 

supports  entrepreneurial 

France’s draft law “Initiative Economique” puts promotion of entrepreneurship on its list of
priorities.  An  action  plan  on  company  start-ups  promoting  entrepreneurship  in  secondary
education is in the pipeline.

Denmark  is  also  preparing  an  action  plan  on  entrepreneurship  focusing  on  entrepreneurial
culture and advisory services. In Spain, a law of June 2002 introduces provisions on training
for entrepreneurs.  In  Sweden,  a  new  programme  aims  to  improve  the  business  environment
and  promote  positive  attitudes  towards  entrepreneurs.  Finally,  the  UK’s  recent  “Review  of
enterprise  and  the  economy  in  schools  and  further  education”  underlines  the  need  to
encourage  entrepreneurial  culture  in  schools  and  to  guide  teachers  on  the  significance  of
entrepreneurship.

Commission

The Best Procedure project on education and training for entrepreneurship, concluded in
November 2002,  aimed  to  identify  and  compare  initiatives  promoting  the  teaching  of
entrepreneurship  in  European  education  systems,  from  primary  school  to  university.  It
concluded that entrepreneurship is now widely recognised as an important issue to be taught
and that despite the many initiatives under way, much remains to be done.

At the end of 2001, also within the framework of the Best Procedure, the project “Promoting
entrepreneurship  amongst  women”  was  launched.  It  entailed  the  creation  of  a  database
containing  132  measures  adopted  by  public  administrations  covering  start-ups,  information,
advice, funding, training, mentoring and networks in the EU and EFTA/EEA countries. These
measures will be evaluated in order to identify good practices31.

Under the European Social Fund (ESF) programmes for the period 2000-2006, a majority of
Member  States  have  SME-related  activities 
the  culture  of
entrepreneurship. One way in which this is being done is by creating networks among SMEs.

to  strengthen 

intended 

The  Communication  on  Lifelong  learning  and  the  “detailed  work  programme  on  the
follow-up of the objectives of education and training systems in Europe” (see heading 4)
define  entrepreneurship  as  a  basic  skill.  The  Leonardo  da  Vinci  and  Socrates  programmes
fund various projects related to entrepreneurship, ranging from promoting an entrepreneurial
spirit in schools to giving support to master programmes in entrepreneurship. In addition, in

30 

31 

German’s  project  to  raise  female  entrepreneurship  from  25%  to  40%  in  2005,  Source:  Germany’s
national report on the Charter.
Relevant  good  practices  adopted  by  USA,  Canada,  Japan,  Australia  and  New  Zealand  will  also  be
registered.

17

                                                
2002,  the  Commission  published  the  results  of  a  project  on  “The  Development  and
Implementation of European Entrepreneurship Training Curricula”32.

In June 2002, the Commission organised an expert meeting on the impact of immigration on
entrepreneurship  both  to  identify  the  most  important  obstacles  faced  by  ethnic  minority
entrepreneurs  when  starting  up  and  developing  their  businesses,  and  to  discuss  possible
support actions.

In  March 2002,  the  Commission  launched  a  project  on  management-capacity  building.
Carried out in close cooperation with the Member States and candidate countries, the project
aims  to  take  stock  of  strengths  and  weaknesses  in  initiatives  designed  to  increase  SMEs’
management capacities, or to provide training on entrepreneurship. For this purpose, an expert
group is due to produce a policy-oriented report by March 2003.

Finally,  with  the  support  of  the  Commission’s  Gate2Growth  Initiative  (see  heading  7),  in
2002,  the  European  Private  Equity  and  Venture  Capital  Association  (EVCA)  developed  the
“Entrepreneurship  Education  Toolkit”  on  the  possibilities  of  risk  capital  financing  for
entrepreneurial ventures. The toolkit was provided to 150 institutions of higher education.

2

Cheaper and faster start-up

“The costs of companies’ start-up should evolve towards the most competitive in the
world.  Countries  with  the  longest  delays  and  most  burdensome  procedures  for
approving new companies should be encouraged to catch up with the fastest. Online
access for registration should be increased.”

Member States

Since the previous Charter report, several  Member States  have  stepped  up  efforts  to  further
simplify company start-ups. Four Member States have put in place targets in this area. Spain
and  Portugal  aim  to  reduce  start-up  time  by  50 %  respectively  by  2006  and  200333.  France
aims at reaching 220.000 new enterprises a year in 2007, and Sweden aims at the creation of
150.000 new enterprises in the period 2003 to 2006. In addition, Ireland wants to create 520
“high potential start-ups” until 2006.

In  2003,  starting  up  a  company  on-line  will  become  a  reality  in  Denmark,  Sweden  and
Norway. This is already possible – with limitations – in Denmark and Austria. Also Spain and
France are working on measures in this field.

In Denmark it is already possible to register a limited liability company on-line through the
“Webreg”  site34,  which  is  currently  being  extended  to  all  types  of  companies.  This
development has been inspired by the Best Procedure project on Business Start-ups.

In Sweden, the “Kontakt-N”35 site is expected to enable electronic registering in 2003.

In Norway, on-line registration of seven different types of companies is due in spring 200336.

32 
33 

34 
35 

EUR 17047, European Commission, Innovation Papers No 24, 2002.
Spain  50%  reduction  by  2006;  Portugal,  50%  reduction  by  2003.  Source:  Communication  on  “Better
Environment for Enterprises”, COM (2002)610 final of 7.11.2002.
www.webreg.dk
www.kontakt-n.nu

18

                                                
Spain is planning to enable  Internet registration of private limited companies with less than
five partners through the project “Nueva empresa”, which is currently under approval and is
due to be piloted in the first half of 200337.

In  France  the  draft  law  on  “Initiative  Economique”  aims  to  enable  company  start-up  by
Internet  (through  a  virtual  centre  for  enterprise  formalities)  in  one  day,  with  one  Euro  of
capital, and paying reduced fees. An action plan to promote company start-ups is under way.

In Austria, approximately 1 000 on-line registrations have been carried out in Vienna since
2001 and the 2002 Trade Law Amendment set the basis for national electronic registration.

Belgium is preparing an action plan for the creation of one-stop shops, for a single electronic
start-up  form  and  for  a  central  enterprise  database.  Results  will  be  evaluated  in  light  of  the
indicators  defined  in  the  Best  Procedure  project  on  Business  start-ups.  The  UK  is  also
preparing an action plan to remove barriers discouraging people in under-represented groups
and  disadvantaged  areas  from  starting  a  business.  At  regional  level,  the  “Potentia”
programme  in  Wales  shares  the  same  goals.  Finally,  Belgium’s  Walloon  region,  as  well  as
Germany and  Italy, are launching web sites providing guidance on how to start a  company.
Other  developments  include  the  extension  of  existing  one-stop  shop  networks  in  Greece,
Spain and Portugal38, as well as the simplification of notary procedures in Portugal.

In  five  Member  States  (Germany,  Ireland,  the  Netherlands,  Austria  and  the  UK),  it  is
currently  possible  to  register  a  sole  proprietorship  enterprise  in  one  day,  in  nine  Member
States in up to two days and in 11 Member States in three days. However, there is a wide gap
between  the  minimum  time  required  and  the  real  time  actually  spent  on  registering  a
company. For example, in both Spain and Italy the minimum registration time is two days, but
the average time spent is respectively 24 and 35 days.

Registration time for a private limited company varies between 2 and 15 days. In 10 Member
States it is possible to register such a company in eight days and in all but four Member States
(Belgium, Spain, Luxembourg and Portugal), the minimum time requirement does not exceed
two weeks.  Minimum registration  costs still range from  zero in Denmark to over €1  700  in
Greece.  In  seven  Member  States  the  cost  does  not  exceed  €50039.  As  regards  Norway,  the
registration time is five days and the minimum cost stands at approximately €70040.

Commission

Since the completion of the Best Procedure project on benchmarking the administration
of business start-ups in January 200241, attention has been drawn to the  conclusions of  the
project in appropriate international fora.

36 
37 

38 

39 

40 
41 

www.brreg.no
“Nueva  empresa”  was  approved  by  the  Council  of  Ministers  and  was  going  through  Parliament  in
October 2002. Source: Spain’s national report on the Charter.
These are the following networks: “KYE” in Greece, “Ventanillas unicas” in Spain and the “Centros de
Formalidades de Empresas” in Portugal. Source: national reports.
Source for the figures in the two paragraphs: “Benchmarking Enterprise Policy: results from the 2002
Scoreboard”, SEC(2002) 1213 of 7.11.2002.
Source: Norway’s national report on the implementation of the Charter.
More  information  on  Benchmarking  the  Administration  of  Business  Start  ups  can  be  found  at
http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/start-
ups/bench_admin_business_start-up_final_2002.pdf.

19

                                                                                                                                                        
3

Better legislation and regulation

“National  bankruptcy  laws  should  be  assessed  in  the  light  of  good  practice.  The
learning from benchmarking exercises should lead us to the improvement of current
practices in the EU.

New regulations at national and Community level should be screened to assess their
impact on small enterprises and entrepreneurs. Wherever possible, national and EC
rules  should  be  simplified.  Governments  should  adopt  user-friendly  administrative
documents.

Small  enterprises  could  be  exempted  from  certain  regulatory  obligations.  In  this
context, the Commission could simplify competition legislation to reduce the burden
of compliance for small business.”

Member States

The vast majority of Member States are putting particular emphasis on this area. All Member
States  report  an  array  of  different  measures.  However,  13 %  of  SMEs  still  report
administrative burdens as a major constraint42 on them.

In the field of bankruptcy legislation, the last report concluded that there was the need for
further  regulatory  solutions  for  insolvent  but  viable  businesses,  as  well  as  for  lessening  the
penalties  of  “honest  failure”.  Since  then,  several  Member  States  have  stepped  up  efforts  in
this area.

The UK has tabled proposals to facilitate the rescue of viable companies and to encourage re-
starts after  failure  (Enterprise Bill  of  March 2002).  In  addition,  the  UK’s  “Company  rescue
pilot  project”,  concluded  in  September 2002,  laid  down  the  criteria  to  determine  whether  a
small company is suitable for rescuing and presented various recovery solutions.

In  2002,  Belgium  tabled  a  draft  law  on  bankruptcy  reforming  the  “excusability  rules”  by
allowing  the  cancellation  of  outstanding  debts  in  certain  cases.  The  Netherlands  is  due  to
revise  legislation  to  facilitate  enterprise  rescue  and  re-start  in  2003-2004.  Austria  abolished
bankruptcy as a reason for business exclusion and revised its insolvency regulation to prevent
abuse  of  bankruptcy  to  the  disadvantage  of  creditors.  Finland  is  drafting  a  new  Bankruptcy
Act establishing the rights of bankrupt entrepreneurs, and providing for debt adjustment.

Several  Member  States  including  Denmark,  Spain,  France,  Italy,  Luxembourg  and  Portugal
have  initiated  proceedings  to  revise  their  bankruptcy  laws.  Denmark  mainly  aims  to  revise
provisions on the restructuring of debts to facilitate a second start, while Spain and Portugal
focus on protecting the  employees of wound-up  companies and on  facilitating the  rescue of
viable  companies,  as  advised  in  last  year’s  Charter  report.  In  addition,  France’s  law  on
“Initiative Economique” partially protects the assets of a “failed” entrepreneur.

Regulatory  impact  assessment  (RIA)  systems  have  been  strengthened  in  a  number  of
Member States, and are currently being introduced in others. In addition, some Member States
have also adopted action plans to reduce administrative burdens. Ireland, Sweden and the UK

42 

“Highlights from the 2001 Survey”, Observatory of European SMEs, European Commission, 2001/1.

20

                                                
have declared the target of applying regulatory impact assessment in all their proposed laws43.
Denmark,  the  Netherlands,  Finland,  Sweden,  the  UK  and  Norway  are  strengthening  their
regulatory impact assessment systems through their special RIA co-ordination units.

Denmark, where the unit for Better Regulation of Business co-ordinates RIAs, business test
panels  assess  the  administrative  burden  on  businesses  of  relevant  draft  legislation.  In
August 2002, Denmark presented an action plan to reduce administrative burdens. In addition,
new  “Test  groups”  of  business  representatives  advise  the  government  on  the  impact  of  and
alternatives  to  complex  legislation.  Annual  interviews  with  1  000  “model  companies”  have
revealed that administrative burdens affect small companies the most.

Sweden is developing a method to measure the administrative burdens of regulation on small
businesses,  following  a  decision  of  June 2002.  The  first  measurements  are  due  in  2003.  In
2001,  80  RIAs  resulted  in  the  withdrawal  or  substantial  revision  of  24  proposals.  All  draft
laws include a small business cost-compliance analysis to be approved by the SimpLex Unit.

The  UK  has  issued  new  RIA  guidance  for  policy  makers  strengthening  the  small  firms’
impact test and the analysis of alternatives to regulation. A “Business Regulation Team” has
also  been  created  including  private  sector  secondments  to  identify  unnecessary  regulatory
burdens for businesses. Scotland developed a “micro business test”, whereby proposed  laws
include an assessment of their potential impact on enterprises with up to five employees.

In the Netherlands, the Joint support Centre for proposed legislation assisted 48 RIAs in 2001.
Finland plans to further strengthen RIA in its upcoming revised instructions on legal drafting.
Finally,  Norway  has  created  a  “project  group”  to  assist  all  ministries  on  RIA  and  on
consultation with business test panels.

Belgium, Ireland and Italy are currently introducing regulatory impact assessment systems. In
2002, Belgium made it compulsory for draft legislation to include an assessment of the impact
it has on enterprises, and a RIA form is being tested. Ireland is piloting a new RIA system and
Italy, whose new simplification unit has  tested RIA  in  five  pilot  legislative  texts,  adopted  a
decree to gradually apply RIA to all laws.

Simplification  of  legislation  is  amongst  the  priorities  of  an  increasing  number  of  Member
States.  Belgium,  Denmark  and  the  Netherlands  have  set  up  the  target  of  reducing
administrative burdens on businesses by 25 %44.

Germany created a bureaucracy reduction unit (“Projektgruppe Bürokratieabbau”) to analyse
complaints by stakeholders and propose ways of removing legislative obstacles. Recent work
focuses on improving communication between public administrations and enterprises.

The  UK  introduced  a  wide-ranging  “Regulatory  Reform  Action  Plan”  in  February 2002,
which contains over 260 proposals for regulatory change.

Norway  launched  a  new  programme  to  reduce  administrative  burdens  through  simpler
legislation, regulatory impact assessment, less red tape and better regulation.

43 

44 

Ireland,  from  0%  in  2001  to  100%  for  all  primary  legislation  by  2006;  Sweden,  100%,  no  date
specified;  UK  100%  by  2005.  Source:  Communication  on  “Better  Environment  for  Enterprises”,
COM(2002) 610 final of 7.11.2002.
Source: Communication on “Better Environment for Enterprises”, COM(2002) 610 final of 7.11.2002.

21

                                                
In 2002, Belgium created departments for administrative and regulatory simplification in both
the Walloon and the Flemish regions and published a study showing that in 2000, 69 % of all
administrative burdens were paid by micro enterprises. Greece is simplifying 700 procedures
through the “POLITIA” programme and Spain adopted a second administrative simplification
action  plan.  France  simplified  various  procedures  within  its  administrative  simplification
programme  and  the  Netherlands  launched  several  projects  to  improve  the  quality  of
legislation.  Also  Austria’s  2001  Administrative  Reform  Act  and  the  2002  Trade  Law
Amendment simplified a wide range of procedures.

In  addition,  Ireland  and  Finland  are  simplifying  their  respective  Company  Laws  and  the
Netherlands  is  carrying  out  research  for  this  purpose.  Portugal  is  revising  its  Enterprise
Licensing Code to reduce by half the time needed to obtain a licence45. Several countries are
also engaged in consolidating legislation and removing outdated laws.

Ireland has been particularly active in the consolidation of competition law, income tax law,
and excise law.

Norway,  following  a  proposal  by  stakeholders,  is  seeking  to  consolidate  250  health
regulations into 6, and has removed 420 laws since 2000.

Commission

In summer 2002, the Commission, building on the Seminar on Business failure in Noordwijk
of  May 2001,  completed  a  study  on  the  legal  and  social  implications  of  insolvency.  In  the
framework of the Best Procedure, the Commission set up a working group bringing together
Member  States’  experts  with  a  view  to  establishing  benchmarks  and  guidelines  for
implementing  change  on  “Restructuring,  bankruptcy  and  a  fresh  start”.  Furthermore,  in
order to raise awareness of the need for action to avoid insolvency, the Commission published
the guide “Helping businesses to overcome financial difficulties”.

The  Better  Regulation  Package,  adopted  by  the  Commission  on  5  June  2002,  aims  at
reforming the way in which the institutions, individually or jointly, are legislating at European
level, as well as how the Member States implement and apply this legislation at national level.

This  ambitious  package  responds  to  a  request  of  the  Lisbon  European  Council  and  aims  at
simplifying and improving the regulatory environment. It moreover responds to the criticism
expressed  regularly  by  some  national  authorities  and  stakeholders  against  an  allegedly
excessive and heavy Community legislation.

The  Commission  has  thus  adopted  an  Action  Plan46  containing  on  the  one  hand  a  series  of
measures  that  it  commits  itself  to  implementing  rapidly  to  improve  the  quality  of  its
legislative  proposals,  and  on  the  other  hand  measures  to  be  discussed  with  the  European
Parliament, the Council and the Member States (co-responsible for legislative quality).

The  Commission  has  decided  to  set  the  example  in  developing  within  its  services  a  new
culture  of  “legislative  quality”  by  launching  a  series  of  actions.  In  accordance  with  the
conclusions of the European Council of Seville, some of the actions proposed in the  Action

45 

46 

Portugal has committed to reducing from 150 to 75 days the time needed to obtain an Industrial licence.
Source: Communication on “Better Environment for Enterprises”, COM(2002) 610 final of 7.11.2002.
“Action  Plan  ‘Simplifying  and  improving  the  regulatory  environment”,  COM(2002)  278  final,
5.6.2002.

22

                                                
Plan  to  the  European  Parliament  and  the  Council  are  under  discussion  between  the
Commission, the European Parliament an the Council with a view to concluding an agreement
as early  as  possible  in  2003.  This  agreement  would  mainly  deal  with  the  use  of  framework
directives, co-regulation, self-regulation  and  an ambitious programme  for simplification  and
reduction of the acquis communautaire.

As  part  of  the  Action  Plan,  the  Commission  is  putting  in  place  a  new  impact  assessment
procedure  that  will  integrate  into  a  single  system  all  existing  internal  impact  assessment
mechanisms. The purpose of the new procedure is to improve the quality of the Commission’s
proposals. The new procedure takes into account the recommendations of the Business Impact
Assessment  pilot  project47  on  how  to  analyse  impact  on  SMEs  and  how  to  ensure  a  proper
analysis of business impacts within an integrated system. By combining elements from both
sustainable impact assessment and regulatory impact assessment, the new procedure will also
have  a  role  to  play  in  an  effective  regulatory  environment  as  part  of  a  more  coherent
implementation of the European Strategy for Sustainable Development.

The  Commission  is  currently  modernising  the  Business  Test  Panel,  where  the  Interactive
Policy Making (IPM) (see heading 5) will be an integral part. The Business Test Panel will be
expanded  to  include  up  to  4  000  businesses  drawn  from  a  wide  range  of  sectors  and  all
Member States. Businesses will be consulted on-line through the panel as from spring 2003.

On 17 July 2002, the Commission adopted the new block exemption regulation for vertical
agreements  in  the  motor  vehicle  sector48.  This  regulation  improves  SMEs’  opportunities  to
compete in the markets for the distribution of new motor vehicles. The new rules facilitate the
sale of different brands by the same dealer and open up the market for after sales servicing,
allowing  qualified  SMEs  to  join  a  vehicle  manufacturer’s  authorised  repair  network.
Furthermore,  independent  repairers,  mostly  SMEs,  will  gain  access  to  information  and
training in order to compete with the authorised repairers in a manufacturer’s network.

4

Availability of skills

“We shall endeavour to ensure that training institutions, complemented by in-house
training schemes, deliver an adequate supply of skills adapted to the needs of small
business, and provide lifetime training and consultancy.”

Member States

Some Member States developed programmes targeting training in small or medium sized
companies.

Germany  launched  the  programme  “Learning  culture  of  skills  development”  (“Lernkultur
Kompetenzentwicklung”)  to  provide  both  training  courses  and  learning  at  work  for  small
enterprises in craft, services and industrial sectors.

Italy created three training funds to  support SMEs: the Crafts Fund, Co-operation fund  and
SME Fund (“Fondo Artigiani, Fondo della Cooperazione, Fondo delle PMI”).

47 

The  final  Business  impact  assessment  (BIA)  pilot  project report  can  be  found  in  all  EU  languages  at
http://europa.eu.int/comm/enterprise/library/enterprise-papers/paper9.htm.  A  BIA  Best  Procedure
project was carried out as a part of the pilot project.

23

                                                
Sweden  launched  the  “On  the  job-training”  measure  to  support  skills  improving  in  SMEs.
Austria  supports  enterprises  with  less  than  50  employees  in  identifying  staff  development
measures through the “Labour market service” (“Arbeitsmarktservice”). Northern Ireland in
the UK developed the “Company Development programme” for SMEs.

A  few  Member  States  have  also  launched  measures  to  address  skill  gaps  in  the  areas  of
technology  and  engineering.  For  example,  Sweden  has  committed  itself  to  increasing  the
number  of  engineering  students,  the  number  of  research  graduates  and  the  number  of
mathematics, science and technology teachers.

Ireland  launched  the  “STEPS”  programme  to  raise  awareness  on  benefits  of  a  career  in
science, technology and engineering, created the Information Technology Skills Development
Fund  (at  post  graduate  level)  and  issued  a  study  on  the  declining  number  of  students  in
physical sciences.

In addition, Italy launched a programme for training in RTD, the “PIA Innovazione”. Several
Member  States  including  Belgium,  Greece,  Spain,  France,  Finland,  Sweden,  the  UK,  and
Norway49  have  reported  on  programmes  to  support  the  use  of  ICT  either  by  individuals  or
enterprises. Finally, the “telecoaching” pilot project in Flanders in Belgium develops methods
to train SME managers in the use of ICT tools.

in  general 

to  promote  training 

Initiatives 
include  Belgium’s  vouchers’  scheme
“Opleidingscheques”  in  Flanders  to  encourage  enterprises  to  invest  in  training,  and  the
“BRAWO” pilot project in Belgium’s German speaking community to sponsor employers and
workers’ training. In addition, Ireland created the “Skillnets” programme to enhance skills for
people in employment. Italy launched the “PIA Formazione” programme to support training
in  enterprises  and  the  UK  established  the  “Sector  Skills  Council”  network  to  assess  skill
needs.

Other  general  initiatives  include  the  merging  of  labour  market  educational  centres  and
vocational schools in Denmark, the launch of advisory services on training in Finland, and the
creation  of  a  committee  to  analyse  school  curricula  from  a  lifelong  learning  perspective  in
Norway.  Tax  incentives  to  promote  training  have  been  created  inter  alia  in  Italy,  the
Netherlands,  Austria  and  Sweden. 
scheme
(“Begabtenförderung”) to sponsor apprenticeships, created the apprenticeships training bonus
and an award for businesses providing innovative apprenticeships.

In  addition,  Austria  developed  a 

Commission

The  European  Council  in  Barcelona  in  March  2002  set  the  objective  of  making  the  EU
educational and training systems a world reference by 2010.

On  14  February  2002,  the  Council  and  the  Commission  jointly  adopted  a  detailed  work
programme  on  the  follow-up  of  the  objectives  of  education  and  training  systems  in

48 

49 

Commission Regulation (EC) n° 1400/2002 of 31 July 2002 on the application of Article 81(3) of the
Treaty  to  categories  of  vertical  agreements  and  concerted  practices  in  the  motor  vehicle  sector,  OJ  L
203, 1.8.2002, p. 30.
Norway’s  programme  focuses  on  teachers:  “ICT  in  Training  of  teachers”.  Source:  Norway’s  national
report on the Charter.

24

                                                                                                                                                        
Europe50.  It  focuses  on  the  three  following  objectives:  to  improve  the  quality  and
effectiveness of education and training systems in the EU, to facilitate everybody’s access to
such systems and to open them up to the wider world. The development of appropriate skills
for the knowledge society is one of its main objectives.

Also  in  February  2002,  the  Commission  adopted  its  Action  Plan  for  skills  and  mobility51
aimed at improving occupational and geographic mobility within the EU. The plan aims inter
alia to combat skill deficits in industry, to develop partnerships of education institutions and
business, and to encourage social partners to introduce competence development strategies for
workers.  Annual  assessments  on  implementation  will  be  presented  to  the  Spring  European
Council.

Five  years  after  its  launch  by  the  Luxembourg  Jobs  Summit,  the  European  Employment
Strategy  (EES)  was  reviewed  in  200252.  Since  1997,  there  has  been  a  shift  towards  more
employment  friendly  taxation,  a  stronger  emphasis  on  lifelong  learning  and  on  making
education and training in line with labour market needs. Moreover, Member States developed
measures  for  administrative  simplification  and  small  enterprises  under  the  Entrepreneurship
pillar  of  the  Employment  Guidelines.  In  addition,  the  draft  Joint  Employment  Report53
analyses Member States’ implementation of the guidelines.

In  addition,  following  on  from  the  Communication  on  Lifelong  Learning54,  the  ‘Bruges
process’ was launched to improve cooperation in vocational education and training amongst
EU  Member  States,  the  European  Economic  Area,  the  candidate  countries  and  the
Commission.

The eEurope 2002 Action Plan55 put a strong emphasis on measures to improve the use of
Information Society Technologies (IST) in education, an approach which is reiterated in the
initiative eEurope 200556. IST projects in the areas of self learning for work and on-the-job-
training  for  SMEs  are  being  carried  out.  IST  use  to  support  virtual  learning  will  be  an
important issue within the Sixth Framework Programme for RTD (see below, heading 8).

In October 2002, at a high-level conference organised in Copenhagen in cooperation with the
Danish  Presidency,  the  Commission  presented  the  final  report  of  the  Best  Procedure  ICT
(information  and  communication  technologies)  Skills  Monitoring  Group,  “e-Skills  in
Europe:  Benchmarking  Member  States  Policy  Initiatives”57.  A  complementary  initiative  on
“Information and Communication Technologies and e-Business skills for user industries and

50 

51 

52 

53 

54 

55 

56 

57 

in 

on 

for 

15-16 

March 

Barcelona 

final,  13.2.2002,

skills  and  mobility,  COM(2002)  72 

Council document 6365/02, 20 February 2002. The work programme was welcomed by the European
Council 
2002.
http://europa.eu.int/comm/education/policy_en.html#programme.
Commission’s  Action  Plan 
http://europa.eu.int/comm/employment_social/news/2002/feb/034_en.html
Commission  Communication  “Taking  Stock  of  Five  Years  of  the  European  Employment  Strategy”,
COM(2002) 416 final, 17.7.2002.
Communication  from  the  Commission  to  the  Council,  Draft  Joint  Employment  Report  2002
COM(2002) 621 of 13.11.2002.
Communication  from  the  Commission  “Making  a  European  Area  of  Lifelong  Learning  a  Reality”,
COM(2001) 678 final, 21.11.2001.
“eEurope 2002, An information society for all, Action Plan”, 14.6.2000, available at
http://europa.eu.int/ eeurope.
Communication  from  the  Commission,  “eEurope  2005:  An  information  society  for  all”,  COM(2002)
263 final, 28.5.2002.
More 
information 
http://europa.eu.int/comm/enterprise/ict/policy/ict-skills/wshop/synthesis-report-v1.pdf

Skills  Monitoring  Group 

found 

ICT 

can 

the 

on 

be 

at

25

                                                
SMEs” was launched in April 2002 to identify  ICT and e-business skills and job profiles in
various industry sectors. This initiative will help to develop and to adapt ICT skills profiles in
response  to  the  specific  needs  of  SMEs.  In  addition,  under  the  eLearning  Action  Plan58,
specific focus has been put on the ICT skills gap. In this context, on 19 December 2002, the
Commission  adopted  a  proposal  for  a  programme  on  the  use  of  ICT  to  improve  access  to
education  and  training  (programme  eLearning59).  In  addition,  the  Commission  presented
actions needed to ensure the supply of skilled labour in a report on "Increasing labour  force
participation and promoting active ageing", which was endorsed by the Barcelona Summit60.

In March 2002,  the  European social partners  submitted a  framework of  action  on skills  and
competencies  development, committing themselves  to  monitoring  its  implementation  and  to
undertaking an evaluation in 2006. The social partners have also adopted a multiannual work
programme  (2003-2005)  regarding  inter  alia  the  implementation  of  the  EES,  lifelong
learning, managing social consequences of change, and possible actions to support the Action
Plan on skills and mobility.

Most Member States have activities under the European Social Fund (ESF) programmes for
the period 2000-2006, in which SMEs benefit exclusively or along with other target groups in
the area of training and human resource development. Generally, the support is given in the
form of training for people working in SMEs.

5

Improving online access

“Public authorities should be urged to increase their electronic communication with
the  small  business  sector.  Thus,  companies  will  be  able  to  receive  advice,  make
applications,  file  tax  returns  or  obtain  simple  information  online,  therefore  faster
and more cheaply. The Commission must lead by example in this area.”

Member States

SMEs’  access  to  the  Internet  is  increasing  considerably  in  some  Member  States  such  as
Greece, Spain, Italy, and the UK. Progress is particularly impressive in Greece, where SMEs’
access  to  the  Internet  increased  from  24 %  in  1999  to  78 %  in  2001.  In  2001,  70 %  of  all
European micro-enterprises and over 80 % of small enterprises had access to the Internet61.

All Governments are committed to improving on-line access and Germany, Portugal and the
UK have set the target of offering 100 % of governmental services on-line by 2005 and Spain
of 40 %  by  200662. Most Member  States concentrate  efforts  on improving and  streamlining
on-line  services  to  better  meet  businesses’  needs  (as  recommended  in  last  year’s  Charter
report),  on  increasing  their  user-friendliness  and  on  enlarging  the  range  of  services  offered.

58 

59 

60 

61 
62 

Communication  from  the  Commission  “eLearning  Action  Plan”,  Designing  tomorrow’s  education”
COM (2001) 172 final, 28.3.2001.
Proposal  for  a  Decision  of  the  European  Parliament  and  of  the  Council  adopting  a  multiannual
programme (2004-2006) for the effective integration of Information and Communication Technologies
(ICT)  in  education  and  training  systems  in  Europe  (eLearning  Programme),  COM(2002)  751  final,
19.12.2002
Report  from  the  Commission  “Report  requested  by  Stockholm  European  Council:  "Increasing  labour
force participation and promoting active ageing", COM(2002) 9, 24.1.2002.
Source: Observatory of European SMEs 2002/1 “Highlights from the 2001 Survey”.
Also  Spain  has  set  up  the  target  of  providing  40  %  of  its  services  on-line  by  2006.  Source:
Communication on “Better Environment for Enterprises”, COM(2002) 610 final of 7.11.2002.

26

                                                
Several  Member  States  are  developing  systems  whereby  forms  can  be  filled  in,  signed  and
processed on-line.

The  following  countries  have  reported  on  web  portals  advising  entrepreneurs  and
increasingly providing on-line services: Belgium, Germany, Greece, Ireland, the Netherlands,
Austria63, Portugal, Finland, Sweden, UK and Norway. Luxembourg is preparing its new web
portal  “Guichet  pour  entreprises”  to  provide  information  on  starting,  developing  and  re-
structuring a company, and has launched a project to put all administrative forms on line.

Particularly  user  friendly  is  Ireland’s  BASIS  (“Business  Access  to  State  Information  and
Services”)  web  portal64,  which  provides  a  single  access  point  to  all  enterprise-related
governmental  services  and  is  organised  around  enterprise  “events”  such  as  starting  a
company, employing staff, paying taxes, accessing funding and innovation.

Denmark  is  developing  a  web  portal  to  enable  enterprises  to  carry  out  most  administrative
procedures on-line using a free of charge digital signature. The portal, to be operational as of
mid  2003,  seeks  to  generate  automatic  exchange  of  data  between  administrations  in  such  a
way that businesses report the same information to only one administrative service.

Another good example is Sweden’s web portal “Entrepreneurs’ guide” (“Företagarguiden”),
launched in October 2001, which answers e-mail queries in 48 hours65.

VAT declarations and payments can be processed on-line in Belgium66, Greece67, Ireland68,
Finland  and  Sweden.  Such  facilities  are  under  development  in  Flanders  in  Belgium69,  in
Denmark  and  in  Luxembourg.  In  Austria,  over  7  000  financial  statements  were  transmitted
electronically since May 2001.

Other innovative on-line services include an Irish website enabling the processing of patent
and  trademark  applications  on-line,  and  the  development  of  a  Finnish  internet  system
allowing micro enterprises with up to five employees to pay salaries on-line as from autumn
2003.  Public  procurement  information  is  provided  on-line  in  a  number  of  Member  States
including  Germany,  Greece,  Ireland,  Austria  and  Finland.  In  Finland,  900  procurement
notices  were  placed  at  the  “JULMA”  site  since  October  2001.  Greece  is  expanding  its
Integrated  Customs  Information  System  (“ICIS”)  to  facilitate  the  submission  of  customs
declarations.

Commission

The  Information  Society  Technologies  (IST)  Programme70  is  part  of  the  Fifth  and  Sixth
Framework Programmes for RTD. It complements the GoDigital initiative launched in April

63 

64 
65 
66 
67 

68 

69 

70 

Austria expects to be able to provide most administrative procedures online in 2003. The number of on-
line procedures increased from 3 in 2001 to 7 in 2002. Source: Austria’s national report on the Charter.
See www.basis.ie
See www.foretagarguiden.se
Belgium’s EDIFACT and INTERVAT projects. Source: Belgium’s national report on the Charter.
Greece’s TAXIS website, also income tax declarations possible. Source: Greece’s national report on the
Charter.
Ireland’s ROS Revenue online Service, VAT and income tax. Source: Ireland’s national report on the
Charter.
In  Belgium  the  FISCONET  federal  database  has  been  on-line  since  spring  2002.  Source:  Belgium’s
national report on the Charter.
www.cordis.lu/ist

27

                                                
200171,  which  aims  inter  alia  to  raise  awareness  and  spread  best  practice  on  e-commerce
among SMEs. For this purpose, the Commission is carrying out approximately 70 IST take-up
projects involving hundreds of European SMEs. By making the experiences from the take-up
projects  widely  accessible,  the  IST  Programme  is  making  an  important  contribution  to
eEurope  GoDigital.  The  eEurope  2005  Action  Plan72  identifies  the  need  to  promote  “a
dynamic  e-business environment”. SME actions under the  Sixth  Framework Programme for
RTD support this process (see heading 8).

An “e-business legal portal” was created in October 2002 and is managed by a network of 16
Euro  Info  Centres  in  13  European  countries.  The  portal  is  an  on-line  information  service,
providing  an  overview  of  relevant  e-commerce  legislation,  self-regulatory  initiatives  and
offering legal advice on various questions. This portal will help the Commission identify the
most  important  legal  problems  faced  by  companies  when  they  conduct  business  on-line.  Its
extension to all Member States and possibly the candidate countries is foreseen.

In  2001,  under  the  IDA  Programme  (Interchange  of  Data  between  Administrations),  an
initiative  for  the  creation  of  the  portal  “public-services.eu”  was  launched.  This  portal,
currently in a pilot phase, will provide a single access point for all public on-line information
and services in order to assist enterprises carry out cross-border activities.

In  November  2001,  the  Commission  and  the  Belgium  Presidency  jointly  organised  a  high-
level  ministerial  conference  on  eGovernment  applications.  At  this  occasion,  an  "eEurope
award for Innovation in eGovernment" was launched and the first benchmark study on on-line
public services was issued. A Ministerial declaration presents the findings of this event73.

6

More out of the Single Market

“The Commission and Member States must pursue the reforms underway aiming at
the  completion  in  the  Union  of  a  true  internal  market,  user-friendly  for  small
business, in critical  areas  for  development  of  small  businesses  including  electronic
commerce,  telecommunications,  utilities,  public  procurement  and  cross-border
payment systems.

European and national competition rules should be vigorously applied to make sure
that small  businesses  have every chance  to  enter new markets and compete  on fair
terms.”

Member States

In autumn 2002, only five Member States – Denmark, the Netherlands, Finland, Sweden and
the  UK  -  have  passed  98.5 %  of  all  Internal  Market  Directives  into  national  law,  thus
achieving  the  Stockholm  European  Council’s  target  of  reducing  implementation  deficits  to
1.5 %. In  spring 2002,  Belgium and  Spain  were also  in this  category. Sweden currently  has
the lowest deficit rate (0.4 %), followed by Finland (0.6 %) and Denmark (0.7 %)74.

71 

72 

73 

74 

“Helping  SMEs  to  Go  Digital”,  COM(2001)  136  final,  13.3.2001,  www.europa.eu.int/godigital.  The
GoDigital Initiative is part of the eEurope 2002 Action Plan.
Communication  from  the  Commission,  “eEurope  2005:  An  information  society  for  all”,  COM(2002)
263 final, 28.5.2002.www.europa.eu.int/information_society/eeurope
Ministerial  Declaration  on  eGovernment  of  29  November  2001,  more 
http://europa.eu.int/information_society/eeurope/egovconf/index_en.htm.
Internal Market Scoreboard, no 11 of November 2002 and no 10 of 16 May 2002.

information  at

28

                                                
Throughout 2002, the backlog has further increased for the Member States furthest away from
meeting  the  target:  France,  followed  by  Greece,  Portugal  and  Austria75.  Finland  is  the  only
Member  State  to  meet  the  new  target  of  0 %  deficit  (by  spring  2003)  in  implementing
Directives more than two years overdue. To reach this target, the other Member States have to
transpose a number of Directives ranging from one in Sweden to 14 in France.

Denmark  is  currently  carrying  out  a  benchmarking  exercise  to  analyse  differences  and
similarities in the way different Member States implement and apply the same EC Directives.

The Austrian pilot project “Opportunities in the Single Market” (“Chance Binnenmarkt”)76,
aims to raise SMEs’ awareness of the opportunities of the single market and to provide free
advisory services.

Several countries report on the operation of the SOLVIT programme (see below) at national
level, namely Germany, Portugal, Finland, Sweden, the UK and Norway.

Only a  few  Member  States  report  progress in the liberalisation of national markets. Both
Ireland and Austria adopted legislation to further open up their gas markets. Finland proposed
various measures to develop the electricity market, which is now  fully  open  to competition.
Public  procurement  legislation  is  under  revision  in  Greece  and  Portugal,  and  Denmark
launched a website for companies feeling unfairly treated in public procurement cases.

As  regards  competition  law,  Denmark  amended  its  Competition  Act  to  raise  the  level  of
infringement  fines,  Ireland  consolidated  all  statutory  arrangements  for  competition  and
mergers in its  Competition  Act  2002,  and  Austria  created  a  Federal  Competition  Authority.
Sweden  proposed  a  new  regulation  with  provisions  against  public  actors  that  harm
competition. In addition, the UK’s new Enterprise Bill improves the protection of small firms
against unfair competition77.

Commission

The Commission’s current Internal Market Strategy is a five-year programme last reviewed
in April 200278, focusing attention on those areas where progress is most urgently needed in
order  to  make  EU  businesses  more  competitive  and  better  able  to  grasp  the  opportunities
offered by the Single Market.

An adequate  Intellectual  Property protection system will support SMEs’  efforts  to innovate.
The Commission presented a proposal for a Regulation creating the Community patent79, a
priority target in the Internal Market Strategy. A unitary patent will enable companies to align
their production and distribution activities to the EU formation and to take on the challenges
of  innovation  and  competitiveness  with  the  US  and  Japan.  Community  patents  should  be
affordable in terms of cost and should guarantee legal certainty. Furthermore, on 20 February

75 

76 
77 

78 

79 

France: deficit currently at 3.8 %, from 3.1 % in spring 2002; Greece: 3.3 % from 2.7 %; Portugal: 3.1
% from 2.1 %; and Austria: 2.7 % from 2.1 %. Source: idem to previous end note.
This measure was already reported upon in Austria’s 2001 report.
In  the  UK,  regulatory  impact  assessments  will  also  include  an  analysis  of  the  effects  of  competition.
Source: UK’s national report on the Charter.
Communication from the Commission on “2002 Review of the Internal Market Strategy: Delivering the
promise”, COM (2002) 171, 11.4.2002.
Commission  proposal  of  1.8.2000  for  a  Regulation  of  the  Council  on  the  Community  patent,  COM
(2000) 412 final, CNS 2000/0177, Official Journal C 337 E/45, 28.11.2000, p. E/278.

29

                                                
2002 the Commission presented a proposal for a Directive on the patentability of computer-
implemented inventions80, harmonising and clarifying provisions in this area.

In  July  2002,  the  Commission  adopted  its  second  biennial  report  on  the  application  of  the
principle of Mutual Recognition in the Single Market81. The main purpose of the report is
to  assess  the  progress  made  in  the  application  of  mutual  recognition82  in  the  single  market
since 1999 and to highlight the areas in which mutual recognition continues to pose problems.
The  Commission  is  planning  to  adopt  a  Communication  including  guidelines  on  applying
mutual recognition for products between economic operators and national administrations.

In conformity assessment, multiple testing and certification within the EU is still common,
despite efforts to encourage the mutual recognition of test results, marks and certificates. This
has resulted in increased costs to industry, in particular for SMEs, which are required to pay
for  more  than  one  conformity  evaluation  procedure.  In  order  to  obtain  an  overview  of  this
situation, a Best Procedure project was launched in autumn 2002, with the aim of producing
case  studies  of  various  sectors.  These  will  compare  conformity  assessment  procedures  and
their economic impact in the selected sectors, developing indicators to measure their impact
on manufacturing enterprises, including SMEs.

Internal  Market 

from  possible  misapplication  of 

While the Internal Market generally functions well, sometimes businesses run into difficulties
resulting 
regulations  by  public
administrations in other Member States. SOLVIT83 is a network set up by the Commission to
resolve problems relating to the misapplication of regulations - these might emerge in various
aspects  of  business  life,  e.g.  market  access  of  goods  and  services,  public  procurement,
taxation, or the starting-up of a company. The Internal Market Council, in its Resolution of 1
March 2002, confirmed Member States’ commitment to the effective operation of the system.
The SOLVIT network, launched on 22 July 2002, has an important role to play in making the
EU more operational and practical for businesses, in particular the smallest ones.

On 11 December 2002, the Commission adopted a Communication to improve the control of
application of Community law 84. On 30 July 2002 the Commission adopted a report on “the
State of the Internal Market for services”85. This report draws up a comprehensive overview
of the barriers that continue to inhibit services. It concludes that a decade after completion of
the Internal Market there is still a huge gap between the vision of an integrated EU economy
and the reality as experienced by European enterprises.

A significant development was the adoption of the Regulation on cross-border payments in
Euro  to  achieve  a  single  payments  area86.  The  Regulation  makes  provisions  to  apply  the
principle  of  non-discrimination  to  bank  charges  for  national  and  cross-border  payments  in

80, 

81 

82 

83 

84 
85 

86 

Proposal  for  a  “Directive  on  the  patentability  of  computer-implemented  inventions”,  COM(2002)  92
final, 20.2.2002.
Report from the  Commission, “Second biennial Report on the  Application  of  the  Principle  of  Mutual
Recognition in the Single Market”, COM(2002) 419, 23.7.2002.
Mutual  recognition  means  that  if  a  business  (large  or  small)  can  sell  its  products  legally  in  its  home
market it can sell these products anywhere in the European Union.
Commission  Communication  on  “Effective  Problem  Solving  in  the  Internal  market  (“SOLVIT”)”,
COM (2001) 702, 27.11.2001. Commission Recommendation on “Principles for using “SOLVIT” – the
Internal Market Problem Solving Network”, 7.12.2002, OJ L 331, 15.12.2001, p. 79.
COM(2002) 725, 11.12.2002.
Report  on  “the  State  of  the  Internal  Market  for  Services”  (COM(2002)  441),  prepared  as  part  of  the
Internal Market Strategy for Services (COM(2000) 888).
Regulation No 2560/2001 of the European Parliament and of the Council of 19.12.2001 on cross-border
payments in euro

30

                                                
Euro. Deadline for implementation as regards card transactions and ATM withdrawals was 1
July  2002  and  is  1  July  2003  as  regards  credit  transfers.  Commission  studies  indicate
persistently  high  and  variable  levels  of  charges  on  cross-border  payments,  despite  repeated
exhortations  to  banks  to  eliminate  such  practice.  According  to  the  Regulation,  cross-border
charges should not differ from national ones, hence uniform charges should apply irrespective
of distance87.

In  December  2001,  the  Commission  services  launched  a  consultation  document  on  “Co-
operatives in Enterprise Europe”. This document made the case that co-operatives require a
legislative  environment  adapted  to  their  specific  characteristics,  and  identified  European
policies and initiatives with an impact on co-operatives. On 3 June 2002, the Council reached
an  agreement  on  the  Commission’s  proposal  for  a  Statute  for  a  European  Co-operative
Society88, which draws parallels with the Statute for a European Company, but is specifically
tailored  to  the  co-operative  form  of  enterprise.  The  Commission  is  currently  working  on  a
proposal for a Statute for a European Association.

7

Taxation and financial matters

“Tax  systems  should  be  adapted  to  reward  success,  encourage  start-ups,  favour
small  business  expansion  and  job  creation,  and  facilitate  the  creation  and  the
succession in small enterprises. Member States should apply best practice to taxation
and to personal performance incentives.

Entrepreneurs need finance to  translate ambitions into reality.  In order  to improve
the access of small enterprises to financial services, we will:

Identify and remove barriers to the creation of a pan-European capital market and to
the implementation of the Financial Services Action Plan and the Risk Capital Action
Plan;

Improve  the  relationship  between  the  banking  system  and  small  enterprises  by
creating appropriate access conditions to credit and to venture capital;

Improve the access to the structural funds and welcome initiatives by the European
Investment  Bank  to  increase  funding  available  to  start-ups  and  high-technology
enterprises, including equity instruments.”

Member States

Two  Member  States  are  substantially  reducing  corporation  taxes.  Ireland  is  lowering  all
corporation taxes to a single rate of 12.5 % in 2003, which already applies to small businesses
with a trading income below €254 000.  Ireland has also simplified its tax  return  system  for
companies with a turnover below €320 000. The UK reduced corporation taxes from 23 % to
19 % for companies with profits between £50 000 and £300 000. The 19 % start-up tax rate
has been reduced to 0 % for companies with profits not exceeding £10 000.

Several Member States report on different taxation measures to alleviate the tax burden of
small  business.  Belgium  has  lowered  taxes  for  SMEs  based  on  turnover  levels,  exempting

87 
88 

European Commission Press Release IP/01/1084.
Amended proposal COM(93) 252 final, 6.7.1993, O.J. N° C236 of 31/8/93.

31

                                                
those  with  turnover  below  €322  500  from  paying  part  of  their  taxes89.  Denmark  raised  the
turnover threshold for VAT payment obligation from DKK20 000 to DKK50 000 and allows
enterprises  with  a  turnover  below  DKK15  million  to  present  VAT  declarations  quarterly
instead of monthly. New UK rules allow small enterprises to apply a flat rate percentage of
VAT  to  their  turnover  rather  than  account  for  VAT  on  each  sale.  Finally,  in  Norway,
enterprises with turnover below approximately €125 000 may present VAT declarations once
a  year  instead  of  every  two  months.  Both  Portugal  and  Norway  created  tax  incentives  for
R&D:  Portugal  targets  SMEs  in  industry,  trade  or  agriculture,  and  Norway  provides  SMEs
with  up  to  100  employees  tax  credit  representing  20 %  of  annual  R&D  expenditure  up  to
approximately €500 000.

More  measures  are  in  the  pipeline.  Sweden  is  currently  developing  a  system  for  taxation
based  on  average  income  instead  of  real  income.  Both  Greece90  and  Italy  are  drafting
legislation  to  simplify  their  taxation  systems.  Finally,  Greece  is  reducing  VAT  declaration
obligations from 6 to 4 times a year, and France, Greece91 and Austria are lowering taxation
for company transfers, and Ireland is considering such measures.

Several Member States developed new measures to finance start-ups.

Ireland  enlarged  its  venture  capital  market  by  injecting  €95  million  in  twelve  new  venture
capital funds mainly targeted at start-ups and early stage businesses.

Luxembourg developed its “prêt de démarrage” fund to finance up to €250 000 or 40 % of
start up costs.

In  addition,  Austria  created  the  start-up  promotion  programme  “Start  up  Förderung”  to
finance small technology based enterprises with up to 50 employees, and is preparing a new
venture  capital  programme  for  small  enterprises  in  industry  and  trade.  Portugal  launched  a
new  risk  capital  fund,  giving  priority  to  the  financing  of  seed  and  start-up  projects,  and  of
small enterprises.

A few Member States have developed micro loan systems.

Germany  has  launched  a  micro  loan  programme  (“DtA-Mikrodarlehensprogramm”)  in
cooperation with the EIF, providing loans up to €25 000 to start-ups and micro enterprises.

Spain launched a micro credit line (“Línea de Microcréditos ICO”) for micro enterprises, which
targets mainly female entrepreneurs, aged or handicapped people and immigrants. With over
€12 million, it provides loans up to €25 000 to be reimbursed in 2-3 years. 480 projects were
financed in cooperation with the EIF. Spain also created a micro-credit programme for female
entrepreneurs (“Programa de microcréditos para mujeres emprendedoras”) to start-up a company
or  to  finance  its  first  year  of  operation.  With  over  €6  million  co-financed  by  the  ESF,  it
provides loans up to €12 000 to be reimbursed in five years.

Sweden launched a micro loan system targeting mainly female entrepreneurs, covering 50 %
of investments up to SEK250 000.

89 

90 

91 

This measure is expected to lead to a €70 million tax reduction. Source: Belgium’s national report on
the Charter.
This measure is expected to lead to a €280 million-tax reduction. Source: Greece’s  national report on
the Charter.
In  Greece  this  concerns  the  transfer  of  sole  proprietorship  enterprises  to  relatives.  Source:  Greece’s
national report on the Charter.

32

                                                
Spain  and  Finland  are  particularly  active  in  new  venture  capital  schemes  for  technology
investments. Spain adopted a new financial support system for investments up to €500 000 in
technology-based  SMEs  during  their  first  two  years,  and  its  ICO  line  for  the  financing  of
technological innovation provides loans of up to 70 %  of investments. Finland launched the
“LIKSA”  programme  to  finance  business  plans  for  the  creation  of  technology-based
enterprises,  and  the  “INTRO”  initiative  to  put  start-up  enterprises  in  contact  with  investors.
France has set the target of raising investment in risk capital to € 1 billion by 2010 and Ireland
has committed itself to raising investment in venture capital to 0.8 % of the GDP by 200692.

Few  Member  States  reported  developments  on  mutual  guarantee  schemes.  Greece  is
creating  a  guarantee  fund  facility  for  small  and  micro  enterprises  (“TEMPME”)  with  €100
million capital to cover 50 % of loan guarantees requested by financial institutions. Portugal
created three  mutual  guarantee  societies  and  strengthened  its  mutual  counter  guaranty  fund,
while Sweden developed a new loan guarantee scheme for SMEs inspired by good practices
in the Netherlands and Finland.

More  general  measures  include  the  creation  of  an  SME  Funding  Agency  in  Flanders  in
Belgium, where a project to generate risk capital for start-ups is in the pipeline, and the launch
of the €335 million “Argentum” fund to support venture capital funds investing in clusters in
Norway.  Improving  enterprise  financing  is also  among the  priorities  of  the  new  French  law
“Initiative  economique”.  In  addition,  the  Tyrolean  business  support  fund  in  Austria  created
low interest rate loans to companies with up to 20 employees.

New  information  measures  on  access  to  finance  include  a  German  task  force  bringing
together financial experts from the federal administration and from banks to advise SMEs on
access  to  finance,  and  a  German  SME  Forum  on  financing  conditions  under  the  Basle  II
agreement.  Austria  is  developing  a  one-stop-shop  business  service  (“Wirtschaftsservice
GmbH”) bringing together different services to provide advice on financing measures.

In  Belgium,  the  “Risk  capital  fair”  in  the  Walloon  region  brought  together  potential
entrepreneurs with investors. Belgium, Denmark, Austria, Portugal, Sweden, UK and Norway
report  on  developments  in  their  business  angels  network.  In  Denmark,  three  additional
networks  are  in  the  pipeline  and  a  website  puts  entrepreneurs  in  contact  with  potential
business angels. Portugal is supporting its new network through the programme for financing
innovation, and Norway is considering tax incentives for business angels.

Commission

In  October  2001,  the  Commission  presented  a  Communication  “Towards  an  Internal
Market  without  tax  obstacles  -  a  strategy  for  providing  companies  with  a  consolidated
corporation  tax  base  for  their  EU-wide  activities”93  and  a  detailed  study  on  “Company
Taxation  in  the  Internal  Market”94.  These  address  current  problems  relating  to  company
taxation in the EU and include an analysis of the situation of SMEs.

92 
93 

94 

Source: Communication on “Better Environment for Enterprises”, COM(2002) 610 final of 7.11.2002.
Communication from the Commission, “Towards an Internal Market without tax obstacles: A strategy
for providing companies with a consolidated corporate tax base for their EU-wide activities”,
COM(2001) 582 final, 23.10.2001,
http://europa.eu.int/comm/taxation_customs/taxation/company_tax/policy_proposals.htm. .
Commission  Staff  working  paper,  Company  Taxation  in  the  Internal  Market,  SEC(2001)  1681,
23.10.2001.

33

                                                
their  VAT-related  obligations  (for  example 

Two recent directives in the field of VAT make it easier for SMEs to trade across borders and
requirements)95.  The
lessen 
Commission is currently carrying out a study on VAT obligations with a view to propose their
simplification  (registration,  declarations,  payment),  mainly  for  SMEs.  In  2002,  the
Commission  carried  out  a  study  on  employee  stock  options  in  the  EU  and  the  USA.  The
study showed that  Member States’ systems still differ  considerably  on  taxation,  labour  law,
data  protection  and  security.  Companies  operating  in  several  countries  therefore  need  a
different stock options plan for each country. This creates substantial administrative costs and
deters smaller companies in particular from having stock option plans.

invoicing 

In September 2002, the Commission presented the results of the Best Procedure project on
transfer of business at a seminar in Vienna96. This consisted of the conclusions of the expert
group  created  in  2000  to  monitor  the  implementation  of  the  1994  Recommendation  on  this
issue97,  in  particular  to  assess  measures  taken  since  the  1998  Communication98,  and  to
propose further action. The results of the project show that less than half of the measures set
out in the Commission Recommendation have been implemented. Examples of good practice
in  the  different  Member  States  were  also  presented99.  In  October  2002,  the  Commission
launched  a  new  project  on  the  transfer  of  businesses  to  act  on  the  expert  group’s  proposals
and to help Member States make further progress.

In October 2002, the Commission adopted its fourth progress report on the 1998 Risk Capital
Action  Plan  (RCAP)100,  which  embodies  the  Community’s  strategy  on  risk  capital.  Four
years  after  its  adoption,  and  even  at  a  time  when  the  risk  capital  market  is  experiencing  a
severe  correction,  there  is  major  progress  in  the  implementation  of  the  Action  Plan.  Risk
capital  is  a  key  source  of  financing  for  new  and  innovative  enterprises  and  successive
European  Councils  have  called  for  its  implementation  by  2003.  The  modernisation  of  the
regulatory framework has continued in  a financial environment dominated by  the successful
circulation  of  Euro  notes  and  coins.  Important  developments  include  the  mandatory
introduction of international accounting standards by 2005, and the forthcoming legislation on
supplementary  pension  funds.  This  has  a  direct  impact  on  the  supply  of  finance  for  SMEs
with high growth potential.

In  relation  to  public  funding  of  enterprises,  the  adoption  by  the  Commission  of  its
Communication on state aid and risk capital101 has clarified the conditions for compatibility of
public funding of risk capital measures with the state aid provisions of the Treaty. As such, a

95 

96 
97 

98 

99 

100 

101 

Council Directive 2001/115/EC of 20 December 2001 amending Directive 77/388/EEC with a view to
simplifying,  modernising  and  harmonising  the  conditions  laid  down  for  invoicing  in  respect  of  value
added tax; Council Directive 2000/65/EC of 17.10.2000 amending Directive 77/388/EEC as regards the
determination of the person liable for payment of value added tax. .
http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/transfer_business/seminar.htm
OJ L 385, 31.12.1994, p. 14 and the accompanying  Communication containing the  motivations of the
Recommendation, OJ C 400, 31.12.1994, p. 1.
Communication from the Commission on the “transfer of small and medium sized enterprises” (OJ C
93, 28.3.1998).
Results 
of 
http://europa.eu.int/comm/enterprise/entrepreneurship/
support_measures/transfer_business/best_project.htm
Communication  from the Commission on implementation of the  risk  capital  action  plan,  COM(2002)
563 final of 16.10.2002. Based on Communication from the Commission “Risk Capital: A key to Job
Creation in the European Union”, SEC(1998) 522.”
Information from the Commission on “State aid and risk capital”, OJ C 235, 21.8.2001, p.3.

Procedure 

project 

found 

Best 

can 

the 

be 

at

34

                                                
timely implementation of the Financial Services Action Plan (FSAP)102 will go a long way
to  foster  a  more  integrated  EU  risk  capital  market.  The  Commission  continues  to  urge  the
Member  States  to  implement  the  necessary  fiscal  and  structural  reforms  to  promote
investment in venture capital funds.

The three financial instruments managed by the European Investment Fund (EIF) under the
Multiannual  Programme  for  Enterprise  and  Entrepreneurship  (2001-2005)103  became
operational  in  the  first  quarter  of  2002.  These  are  the  ETF  Start-up  Scheme,  the  SME
Guarantee  Facility  and  the  Seed  Capital  Action,  all  of  which  are  delivered  via  financial
intermediaries.  These  instruments  build  on  the  financial  instruments  of  the  Growth  and
Employment initiative of 1998-2000. The  2001  annual report on these instruments104 shows
that,  mainly  small  enterprises  with  fewer  than  10  employees  have  benefited  from  the
guarantee  facility.  However,  the  take  up  of  the  fourth  financial  instrument,  the  JEV
programme,  which provides support  for the creation of  transnational  joint  ventures  between
SMEs, was slow.

In  September  2002,  the  Commission  published  a  report  on  progress  under  the  CREA  Seed
Capital Action. The Action, financed by the Third Multiannual Programme for SMEs (1997-
2000)105, supported recently created seed capital funds with at least €4 million of investment
capital as a way of overcoming an early-stage financing gap. The 19 active funds selected in
1998-1999  have  invested  €92.7  million  in  140  companies,  creating  1 985  new  jobs.  The
majority  of  these  funds  invest  locally  or  regionally  in  new  enterprises  in  information
technology, communications, electronics and life sciences.

In  January  2002,  as  requested  by  the  Industry  Council  in  December  2001,  work  began  on
preparing a possible European Code of Conduct for banks and SMEs. The project involves
inter  alia  the  three  main  European  banking  associations106  and  the  three  main  SME
organisations107. The Commission services reviewed a number of existing codes of conduct,
both within the EU and beyond.

In the context of work on best practices in micro lending, in 2002, the Commission created
a  joint  working  group  with  experts  from  the  Member  States,  candidate  countries,  SMEs,
banking organisations and SME organisations.

In  2001-2002,  the  Fourth  Round  Table  of  Bankers  and  SMEs  held  meetings  in  nine
candidate countries. This Round Table, which was launched in October 2000 and will finish
in 2003, brings together local and EU financing experts to discuss a wide range of access to
finance issues, to exchange best practices and  to  highlight access to finance  problems faced
by SMEs in each candidate country. There is generally a lack of credit available to the private

102 

103 

104 

105 

106 

107 

Communication  from  the  Commission  on  the  ‘Implementing  the  framework  for  Financial  markets:
Action Plan”, COM(1999) 232, 11.5.1999.
Council Decision 2000/819/CE of 20 December 2000 on a “Multiannual programme for enterprise and
entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005)”.
Report from the Commission, “Growth and Employment Initiative: Measures on financial assistance for
innovative  and  job  creating  Small  and  Medium-Sized  Enterprises  (SMEs)”,  COM(2002)  345  final  of
1.7.2002.
Council  Decision  97/15/EC  of  9.12.1996  on  a  third  Multiannual  programme  for  small  and  medium-
sized enterprises (SMEs) in the European Union (1997 to 2000).
These are the Banking Federation of the European Union, the European Savings Banks Group and the
European Association of Co-operative Banks.
These are UNICE, UEAPME and Eurochambres.

35

                                                
sector  in  these  countries,  banks  have  very  limited  experience  of  lending  to  SMEs  and
collateral requirements for loans are often high.

In order to promote financing from business angels, the Commission, in the framework of the
Best Procedure, published  a  report on benchmarking business  angel policies in  the  Member
States108.  The  report  notes  that  the  supply  of  start-up  and  early-stage  equity  finance  has
become  increasingly  dependent  on  business  angels.  The  reasoning  behind  this  include
changes  in  the  banking  sector  which  have  made  lending  unattractive  for  banks  due  to  low
margins  and  high  overhead  costs.  In  addition,  venture  capital  funds  are  often  unable  to
accommodate the large number of small deals with heavy due diligence requirements.

In order to close existing risk capital matching gaps and complement existing initiatives, (e.g.,
business  angel  networks,  investment  forums,  business  plan  competitions),  the  Commission
supports a pan-European database of investment opportunities, “www.Gate2Growth”. This
database  helps  innovative  entrepreneurs  access  existing  networks  of  financiers,  corporate
growth  and  incubator  experts  and  patent  officers.  In  response  to  a  request  by  the  European
Parliament, this “one-stop-shop” risk capital website will be further developed in 2003109.

The Commission has closely followed the possible effects on SMEs of the Basel Committee
negotiations  on  the  new  Capital  Adequacy  Framework  for  banks.  The  Committee’s
proposals  recognise  the  importance  of  SMEs  in  the  economy,  and  will  be  included  in  the
Capital Adequacy Directive due in 2004.

8

Strengthen the technological capacity of small enterprises

“We  will  strengthen  existing  programmes  aimed  at  promoting 
technology
dissemination towards small enterprises as well as the capacity of small business to
identify, select and adapt technologies.

We  will  foster  technology  cooperation  and  sharing  among  different  company  sizes
and  particularly  between  European  small  enterprises,  develop  more  effective
research  programmes  focussed  on  the  commercial  application  of  knowledge  and
technology,  and  develop  and  adapt  quality  and  certification  systems  to  small
enterprises. It is important to ensure that a Community patent is available and easily
accessible to small enterprises.

We  will  foster  the  involvement  of  small  enterprises  in  inter-firm  cooperation,  at
local,  national,  European  and  international  levels  as  well  as  the  cooperation
between small enterprises and higher education and research institutions.

Actions at national and regional levels aimed at developing inter-firm clusters and networks
should therefore be supported, pan-European cooperation between small enterprises
using  information  technologies  enhanced,  best  practice  in  co-operative  agreements
spread, and  small  enterprises  cooperation supported to improve their  capabilities  to
enter pan-European markets and to extend their activities in third country markets.”
Member States

108 

109 

Benchmarking  Business  Angels,  Enterprise  Directorate  General,  4.11.2002,  available  at
http://europa.eu.int/comm/enterprise/entrepreneurship/financing/index.htm
The European Parliament, Resolution of 11.4.2002, Report A5-0020/2002, points 17.

36

                                                
The  last  Charter  report  pointed  out  the  lack  of  initiatives  on  inter-firm  cooperation  and
clusters.  Since  then,  several  Member  States  have  launched  new  measures  or  expanded  on
initiatives  in  this  area.  In  addition,  nine  Member  States  set  targets  to  increase  research
expenditure as a percentage of GDP, with targets ranging from 1 % to 3.5 %110. Most Member
States including Belgium,  Germany,  Greece,  Spain,  Ireland,  Austria,  Portugal,  Sweden,  and
the UK support technology clusters and cooperation amongst SMEs.

Germany  launched  the  “NEMO”  programme  (Netzwerkmanagement  -  Ost  -  NEMO)  to
promote regional networks with research facilities for SMEs in eastern Germany.

Austria  created  the  “protec  2002+”  programme  to  improve  SMEs’  innovative  capacity  by
promoting  technology  transfer.  The  programme  supports  both  individual  SME  projects
developing  new  products,  as  well  as  networks  bringing  together  enterprises  and  technology
transfer institutions.

the 

launched 

Belgium’s  Flemish  region 
innovation  cooperation  network  “Vlaamse
Innovatiesamenwerkingsverbanden” to support innovative projects of enterprise networks. In
addition,  Sweden  introduced  a  cluster  programme  2002-2004  to  encourage  innovative
regional  systems.  Support  to  clusters  in  the  Walloon  region  in  Belgium  took  inspiration
from  clusters  in  Denmark,  France,  the  Netherlands  and  Austria.  Ireland  created  the
“Shannon Development Network” and the “e-cluster initiative” to help companies develop IT
plans.  Technology  incubators  now  operate  in  most  countries  including  Belgium,  Denmark,
Germany,  Greece,  France111,  Luxembourg,  Austria,  Portugal,  Finland,  Sweden,  the  UK  and
Norway112. In addition, the UK launched the Business Incubation Fund.

Several  Member  States  launched  new  programmes  or  expanded  on  recent  measures  to
promote  technology  transfer  from  universities  to  SMEs  and  to  stimulate  cooperation
between small enterprises.

Denmark  launched  the  “Industrial  Innovator  Scheme”  for  cooperation  between  small
enterprises  and  universities,  which  makes  provisions  for  “innovators”  to  develop  a  new
technology or design in a small company.

Greece  created  the  “PAVE-NE”  programme  to  develop  methods  to  transfer  research  to
traditional sectors.

Ireland developed the “Technology  Transfer Initiative programme” to  facilitate the  transfer
and commercialisation of technology between a number of universities and Irish SMEs.

Other new initiatives include Germany’s programme “Knowledge creates markets” (“Wissen
schafft Märkte”) to raise universities’ awareness on patents and transfer of research findings.
Furthermore, Austria’s new “A plus B” initiative supports young scientific graduates in setting
up  technology  companies,  and  Portugal’s  new  programme  “IDEIA”  supports  joint  applied

110 

111 

112 

Member States set the  following targets on General Expenditure on  R & D:  Austria (2.5 % in 2005),
Denmark Germany and France (all 3 % in 2010), Ireland (2 % in  2006),  the  Netherlands  (among  the
leading EU MS in 2010), Portugal (1 % in 2003) and Finland (3.5 % in 2004). In addition, Spain set the
target  of  increasing  Business  Expenditure  (BERD)  to  0.84  %  in  2003.  Source:  Communication  on
“Better Environment for Enterprises”, COM (2002)610 final of 7.11.2002.
France aims to create 865 technological companies per year in incubators. Source: Communication on
“Better Environment for Enterprises”, COM(2002) 610 final of 7.11.2002.
Norway  has  incubators  in  rural  areas,  the  “Business  Gardens”  for  small  knowledge  based  enterprises
linked to science parks.

37

                                                
research.  Finally,  the  UK  is  carrying  out  89  projects  to  strengthen  partnerships  between
university and businesses.

New measures to promote the employment of technologically qualified personnel in SMEs
include the “IRON-P” programme in Greece (employment of scientists in small enterprises),
the
the  “Innovation  assistant” 
“QUADROS” programme in Portugal (recruitment of scientific  graduates in enterprises) and
the “SME Competence strategy” in Norway (targeting SMEs with up to 100 employees).

(Innovationsassistentin)  project 

in  Lower  Austria, 

A series of measures of a more general nature were launched.

Spain  created  the  “NEOTEC”  initiative  (“Initiativa  NEOTEC  para  la  creación  y
consolidación de empresas de base tecnológica”) to support the creation of technology-based
companies.

Sweden launched the “Regional growth through dynamic innovation systems” programme to
develop regional innovation and “Technopoles” to support young high-technology companies.

Finally,  Italy  revised  its  “Technological  Innovation  Fund”  (“Fondo  per  l’innovazione
tecnologica)  to  facilitate  SMEs’  applications  and  Spain’s  “PROFIT”  programme  financed
over 2 700 projects to facilitate technology uptake by enterprises in 2001, 40 % of which was
in small enterprises. The Netherlands is providing funds to help SMEs’ uptake of technology.

Some Member States also created regional target measures. This was the case in Denmark’s
initiative  to  improve  cooperation  between  traditional  companies  and  universities  in  the
regions  of  Jutland  and  Fyn,  and  Sweden’s  “REG.IT”  to  help  companies  in  regional
development areas adopt IT technology. Tax incentives to promote the intake of technology
by enterprises were provided for in Denmark (new tax deduction on research investments by
enterprises), Italy and Austria (10 % research allowance for SMEs).

Commission

The  Sixth  Framework  Programme  for  RTD113  (FP6)  attaches  great  importance  to  the
participation of SMEs, including micro  and craft enterprises in all research areas.  It devotes
the  highest  ever  budget  (nearly  €2.2  billion)  to  them,  becoming  one  of  the  largest  support
instruments in the world for SMEs in the field of research and innovation. At least 15 % of
the  budget  allocated  to  the  priority  thematic  research  areas  of  the  Integrating  and
Strengthening the European Research Area114 specific programme of FP6 will be dedicated to
SMEs.  The  Sixth  Framework  Programme  will  improve  on  existing  initiatives  aimed  at
simplifying administrative procedures and helping SMEs. In particular, the National Contact
Points  (NCPs)  network  to  provide  information  and  assistance  to  SMEs,  will  be  further
developed to ensure a coherent approach and a high level of service. Efforts are undertaken to
facilitate  the  participation  of  SMEs  in  the  new  instruments  of  the  Sixth  Framework
Programme, the Network of excellence and the integrated projects.

113 

114 

Decision No 1513/2002/EC of the European Parliament and of the Council of 27 June 2002 concerning
the Sixth Framework Programme of the European Community for research, technological development
and  demonstration  activities,  contributing  to  the  creation  of  the  European  Research  Area  and  to
innovation (2002 to 2006), OJ L 232, 29.8.2002, p. 1.
More information on the European Research Area at
http://europa.eu.int/comm/research/era/index_en.html

38

                                                
In January 2002, the Commission launched a free of charge Helpdesk on Intellectual Property
Rights (IPR) to help European SMEs participate in Community funded RTD115.

The  new  generation  of  innovative  actions  for  2000-2006,  financed  under  the  European
Regional Development Fund (ERDF), are particularly relevant for small enterprises and their
involvement  in  the  knowledge-based  economy.  Three  themes  have  been  chosen  for  this
period:  a  regional  economy  founded  on  knowledge  and  technological  innovation;  eEurope-
regio:  the  Information  Society  and  regional  development;  and  regional  identity  and
sustainable  development.  During  2001,  approximately  80  regions  have  begun  implementing
their  regional  programmes  of  innovative  actions,  mainly  in  the  fields  of  technological
innovation and the information society, with EU co-financing at over €200 million. For 2002,
the Commission approved another approximately 40 regional programmes.

A  Best  Procedure  project  on  Technology  Transfer  Institutions  was  launched  in  the
autumn  of  2002  to  contribute  to  the  improvement  of  technology  transfer  from  research  to
enterprises. The project will cover various activities in the area of relations between industry
and science, in particular issues on IPR, mobility of researchers, and spin-offs.

The  Commission  has  extended  for  two  additional  years  the  68  Innovation  Relay  Centres
(IRCs) that offer Technology Transfer services to European SMEs. These are due to operate
within the Sixth Framework Programme 2002-2006116.

Within its “PAXIS” action, in April 2002, the Commission organised in Stockholm the Third
European Forum for Innovative Enterprises. The Forum discussed latest trends and successful
approaches in innovative start-ups, as well as issues such as the role of academia as a business
generator and cities as business incubators. Finally, the Commission launched 16 innovation
strategy  projects  in  the  Newly  Associated  Countries  with  the  aim  of  implementing  regional
innovation  strategies.  14  Thematic  Networks  with  more  than  250  European  innovation
stakeholders have been set up to exchange good practice on regional innovation policy117.

9

Successful e-business models and top-class small business support

“The Commission and Member States should  encourage small  enterprises  to  apply
best practice and adopt successful business models that enable them to truly flourish
in the new economy.

We  will  co-ordinate  Member  States  and  EU  activity  to  create  information  and
business  support  systems,  networks  and  services  which  are  easy  to  access  and
understand,  and  relevant  to  the  needs  of  business;  ensure  EU-wide  access  to
guidance and support from mentors and business angels, including through websites,
and exploit the European Observatory on SMEs.”

Since  the  previous  report,  several  Member  States  launched  general  action  plans  or
strategies on e-commerce. Five Member States have set up targets in this area118. Germany
wants 20 % of its SMEs to have an e-strategy by 2005. France and Ireland want respectively
90 % and 95 % of their SMEs to have Internet access by 2006. The Netherlands wants 66 %

115 
116 
117 
118 

More information can be found on the web site www.ipr-helpdesk.org.
Additional information on the IRC Network can be found on the web site “irc.cordis.lu”.
More information can be found on the web site www.innovating-regions.org.
Source: Communication on “Better Environment for Enterprises”, COM(2002) 610 final of 7.11.2002.

39

                                                
of its SMEs to carry out on-line transactions by 2005 and Spain wants 99 % of its enterprises
with over 10 employees to have Internet access by 2010.

The Netherlands developed the action plan “SMEs in the Dutch Digital Delta” to stimulate e-
commerce in SMEs.

Spain introduced the “PRINCE XXI” initiative119 to support the use of e-commerce in small
industrial enterprises with less than 25 employees.

In addition, Denmark launched its ebusiness action plan 2002 to raise awareness and improve
infrastructure  for  e-commerce,  and  Styria  in  Austria  launched  an  ebusiness  programme
“Aktionsprogramm  E-Business  neu”  to  strengthen  e-business  activities  in  micro  and  small
enterprises. Sweden extended the “SVEA” project until 2006 to ensure that 80 % of companies
with more  than  one  employee  make  use  of  e-commerce  by  this  date.  The  UK  established  a
network of “ebusiness clubs” at its Chambers of Commerce and extended its scheme to help
SMEs develop websites.

On-going programmes in this field include Belgium’s eFl@nders action plan in the Flemish
region  and  Ireland’s  “e-business  programme”  by  the  Chambers  of  Commerce  to  build  e-
business capacity amongst SMEs. Over 800 small enterprises developed websites as a result
of the “Empower” initiative in Ireland (concluded at the end of 2001). In Belgium’s Walloon
region,  the  "eCapital  Breakfasts”  for  SMEs  bring  together  entrepreneurs  with  e-commerce
experts and financial institutions in order to raise awareness on ICT and to enhance their use.

Some  Member  States  provide  financial  support  to  e-commerce  investments.  This  can  be
said both of France’s “UCIP” procedure and  Italy’s new funds to sponsor joint e-commerce
initiatives by SMEs. Also the Belgium Walloon region120 provides grants for the creation of
e-commerce  platforms  in  SMEs  with  less  than  100  employees.  New  analysis  tools  include
Denmark’s  new  ICT  index  to  analyse  how  companies  apply  IT  in  business  processes,  and
France’s e-commerce “tableau de bord” to analyse intake of ICT by national companies.

Some Member States report significant progress as regards business support services.

New services specifically targeting small and micro enterprises are Ireland’s “Community
Enterprise Centre Scheme 2002” to provide facilities to support the creation and development
of micro-enterprises, and Scotland in the UK’s planned support services to small businesses
through the policy framework “Smart successful Scotland”.

119 

120 

PRINCE XXI is part of the INFO XXI 2001-3 programme reported in the 2002 Charter report. Source:
Spain’s national report on the Charter.
Law of July 2002 on the use of e-commerce. Source: Belgium’s national report on the Charter.

40

                                                
Recent measures include the planned consultancy vouchers for SMEs in Flanders in Belgium,
the on-going creation of Centres for Business and Technological Development in Greece, and
the planned  extension of the “Guichet  Unique Transfrontalier  des Entreprises” which  helps
entrepreneurs to start up a company in  Luxembourg, Belgium and  France.  In addition,  Italy
launched a programme for the creation of 30 incubators with an investment incentive fund121,
and the UK launched the “Opportunity Wales” initiative offering business support services to
SMEs in Wales’ objective 1 areas.

Finland  has  launched  a  “Regional  Business  Services  Project”  2002–2007  to  establish  a
network  of  50  regional  business  service  points.  These  will  provide  standardised  and  tailor
made services to small enterprises and start-ups at regional level. Finland has also developed
several  modules  of  “Branded  Expert  Services”  inter  alia  to  help  SMEs  develop  business
activities, and craft enterprises become more competitive.

Support  services  are  being  provided  increasingly  on-line.  For  example  Germany  created
an  on-line  service  to  provide  entrepreneurs  with  advice  on  crisis  management,  insolvency
procedures  and  re-start122.  In  Spain,  different  services  such  as  business  plan  assistance  and
research of business opportunities are provided on-line through the “Portal PYME”. Finally,
Belgium  launched  a  study  to  analyse  the  visibility,  coherence  and  efficiency  of  business
support  services123.  A  recent  Norwegian  study  revealed  that  70 %  of  micro  and  small
enterprises are not aware of such services, which are used by only 3 % of all enterprises.

Commission

For SMEs providing on-line services, further  opportunities in the  Internal  Market should  be
provided  as  a  result  of  the  E-commerce  Directive124,  for  which  the  transposition  deadline
was 17 January 2002.

As  a  follow-up  of  the  eEurope  2002  Action  Plan,  and  more  specifically,  of  the
Commission’s  Communication  and  Action  Plan  “Helping  SMEs  to  Go  Digital”125,  the
Commission  services  have  launched  specific  actions  to  address  the  needs  of  SMEs  with
regards  to  the  adoption  of  ICT  and  e-business.  A  summary  of  the  progress  achieved  in  the
different actions is outlined in the “Go Digital Progress Report 2001-2002”126.

The Best Procedure project on national and regional policies in support of e-business for
SMEs, concluded in June 2002, identified 19 examples of good national and regional policies
for  helping  small  businesses  “go  digital”.  The  final  report127  sets  out  15  lessons  on  policy
development  and  identifies  more  than  150  policy  initiatives  in  support  of  e-business  for
SMEs.  Promising  e-business  initiatives  identified  in  the  project  include  awareness  raising
actions, promoting SMEs’ support networks, and promoting Internet platforms for SMEs. The

121 

122 
123 

124 

125 
126 
127 

18  incubators  with  665  companies  have  been  created  through  this  measure.  Source:  Italy’s  national
report on the Charter.
http://www.aus-fehlern-lernen.info. Source: Germany’s national report on the Charter.
Study in the framework of evaluation and monitoring measures of “4X4 pour entreprendre”. Results are
expected for spring 2003. Source: Belgium’s national report on the Charter.
Directive 2000/31/EC of 8 June 2000 of the European Parliament and of the Council on certain legal
aspects  of  information  society  services,  in  particular  electronic  commerce,  in  the  Internal  Market
('Directive on electronic commerce'), OJ L 178, 17.7.2000, p.1.
“Helping SMEs to Go Digital”, COM(2001) 136, 13.3.2001.
Commission Staff working paper, "Go Digital Progress Report 2001-2002”, SEC(2002) 566, 13.5.2002.
Final  benchmarking  report  of  national  and  regional  policies  in  support  of  e-business  for  SMEs:
http://europa.eu.int/comm/enterprise/ict/policy/benchmarking.htm

41

                                                
final  report  therefore  recommends  exchange  of  good  practice  in  this  field.  This  is  why  the
Commission launched a “European e-business support network for SMEs” to bring together
European,  national  and  regional  players  with  a  view  to  strengthening  actions  in  support  of
SMEs in this field128.

On 13 May 2002 the Commission published the "Go Digital Progress Report" analysing the
results of the Go Digital Awareness Campaign.129. Launched in April 2001, this campaign
aims  to  encourage  multiplier  organisations  to  launch  Go  Digital  events  and  workshops  at
European,  national  and  regional  level.  Such  workshops  should  demonstrate  the  potential
benefits of adopting  e-business, to  promote  the efficient  use  of  e-business  by  SMEs,  and  to
provide them with practical assistance on how to take full advantage of the eEconomy.

Following  the  Best  Procedure  project  on  business  support  services130,  the  Commission
presented the results of the work on support services, with a focus on micro, small and sole
proprietor businesses at a European seminar in Vienna in April 2002. This study provides a
methodology for possible policy actions aimed at creating top class support services for small
companies.

Support measures and initiatives are presented in the SMIE database131 which contains over
2  500  measures  and  100  good  practices  from  25  countries  (EU,  EEA  and  six  candidate
countries). The database aims to facilitate comparative analysis, benchmarking and evaluation
of support measures.

The Best Procedure project on business incubators132 concluded that 90 % of all start-ups
set up inside a business incubator are still active three years later, and that the public cost of
creating jobs inside incubators is very low compared with other public measures. A sustained
effort  to  support  business  incubators  over  the  next  eight  years,  should  allow  incubators  to
contribute towards the Lisbon goal of achieving 15 million new jobs. Since the project ended
in  January  2002,  the  Commission  services  have  presented  its  conclusions133  and  created  a
European-wide business incubator on-line database.

10

Develop stronger, more effective representation of small enterprises’ interests at
Union and national level

“We will complete a review of how the interests of small businesses are represented
at EU and national level, including through the social dialogue.”

Member States

Very few Member States have launched new initiatives in this area since last year’s report.

128 

129 

130 

131 
132

133 

is 

is 

an 

2005 

action; 

related 

eEurope 

available 

information 

This 
http://europa.eu.int/comm/enterprise/ ict/policy/e-bus-snfsme.htm
More  information  at  http://europa.eu.int/information_society/topics/ebusiness/godigital/background/
index_en.htm
Commission Staff working paper,” “Creating Top-class Business Support Services”, SEC(2001) 1937,
28.11.2001.
http://europa.eu.int/comm/enterprise/smie/index.htm
Benchmarking 
business 
management 
at:<http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/incubators/index.htm.
Information on the Business incubators database at: http://europa.eu.int/comm/enterprise/bi.
For  example  the  ACE  Forum  in  Paris  in  March  2002,  and  the  annual  16th  International  American
National Business Incubation Association (NBIA) conference in Toronto, Canada, in April 2002.

incubators, 

available

report 

final 

of 

at:

42

                                                
The  Walloon  region  in  Belgium  signed  a  partnership  charter  with  employers  and  workers’
organisations on training, administrative simplification and business development.

Greece established the “National Competitiveness Council”, an advisory body on enterprise
policy  and  competitiveness  to  the  Ministry  of  Development,  which  represents  the  business
community and other stakeholders.

The  UK’s  “Small  Business  Council”  (SBC),  an  independent  body  of  20  entrepreneurs
advising the  executive, has been strengthened in 2002.  Its  chairman  now  attends  ministerial
committees  discussing  regulation  and  has  access  to  the  Prime  Minister.  The  SBC  consults
small businesses and issues an annual report with recommendations to the Government.

A  group  of  countries  -  Denmark,  Finland,  Sweden,  the  UK  and  Norway  in  particular  –
systematically consult small business representatives in the framework of their regular impact
assessments. Informal consultations by the Ministry drafting legislation, public hearings, open
written consultation and business test panels are the most used measures. In Finland, business
representatives  also  participate  in  working  groups  preparing  legislation  and  in  Sweden
business organisations are represented in permanent “reference groups”.

In  Spain,  draft  laws  are  distributed  to  stakeholder  organisations  for  consultation.  Moreover,
both Germany and Luxembourg carry out compulsory consultation of stakeholders including
small businesses prior to the adoption of legislation. Austria regularly consults its Chambers
of  Commerce  prior  to  the  adoption  of  legislation.  Denmark  interviews  over  1  000  “model
companies” every year on their opinion on administrative burdens. In Norway, the Forum for
Simplification  brings  together  government  officials  with  business  organisations  to  discuss
how to reduce burdens on businesses.

Greece  is  creating  an  Observatory  for  SMEs  to  collect  data  at  local,  regional  and  national
level  on  micro,  small  and  medium  sized  companies.  The  Spanish  Observatory  for  SMEs,
which aims at monitoring national SME policies and carries out studies, is being restructured.

As  regards  developments  with  initiatives  mentioned  in  last  year’s  report,  Ireland’s  Round
Table for SMEs met regularly in 2002 to discuss matters ranging from the internal market to
EU enlargement, and the UK’s smallbusiness|europe liaison office in Brussels stepped up its
activities. In Sweden, the group of small enterprises’ representatives discussed policy  issues
from a small business perspective and recommended changes in legislation accordingly.

Commission

In  the  framework  of  the  “e-Commission”  initiative134,  but  also  linked  to  the  Commission’s
governance  and  better  regulation  initiatives,  the  Interactive  Policy  Making  (IPM)
initiative135 has introduced two new internet-based instruments, “Feedback Mechanism” and
“On-line Consultations”. The IPM initiative aims to enable stakeholders to actively participate
in  the  Commission’s  policy-making  process.  The  “Feedback  Mechanism”  has  collected
information from over 17 000 cases, mainly from small businesses, about different problems
–  such  as  lack  of  information,  high  compliance  costs  of  legislation,  inconsistent  legislation,
insufficient redress facilities and possible infringement cases – which small enterprises  face
regularly. This enables the Commission to make policy based on “hard” facts. With the On-

134 
135 

Available at http://europa.eu.int/comm/di/pubs/e-comm/sec_2001_0924_en.pdf
http://ipmmarkt.homestead.com/.

43

                                                
line  Consultation  mechanism,  the  general  public,  specific  target  groups  as  well  as  small
enterprises are able to feed their views into the policy-making process.

In  December  2001,  the  Commission  nominated  an  SME  Envoy  in  the  person  of  Mr  Timo
Summa,  Director  in  charge  of  the  promotion  of  entrepreneurship  and  SMEs  within  the
Enterprise Directorate-General. The SME Envoy function aims to establish an active interface
with the SME Business Community, so that the interests and needs of these enterprises can be
better and more clearly identified, highlighted to the relevant Commission services, and taken
into consideration in Community programmes, policies and actions136.

The  Commission  holds  regular  meetings  with  European  business  organisations,  with
particular  emphasis  on  those  who  represent  SMEs  and  have  a  horizontal  approach.  The
purpose  of  the  meetings  is  to  generate  an  information  exchange,  whereby  the  Commission
informs  the  European  business  organisations  on  current  issues.  This  is  done  with  a  view  to
disseminating the information  to  their  member organisations,  and serves  to consult  them  on
forthcoming initiatives. The business representatives in return inform the Commission about
the concerns and interests of their respective members.

As described above (see heading 3),  the Commission is currently modernising the Business
Test  Panel,  which  will  be  expanded  to  include  up  to  4  000  businesses  drawn  from  a  wide
range of sectors and all Member States. Small enterprises will constitute an important element
of the panel.

SMEs’  participation  in  the  European  standardisation  process  is  crucial  for  their
competitiveness. However, many decisions on standards are made without taking their needs
into  account.  With  this  is  mind,  the  Commission  services  have  charged  a  contractor  with
providing information to SMEs and crafts businesses on standards, certification, quality  and
norms  and  with  organising  SMEs’  participation  in  the  standardisation  bodies  at  national,
European and international level137.

Some  of  the  many  examples  of  Commission  services’  consultation  of  small  businesses
include  the  Committee  of  the  Leonardo  da  Vinci  programme  and  the  Bruges  process  (see
heading  4)  where  the  Social  Partners  -  including  European  SME  organisations  -  participate
actively.  Likewise,  for  the  Community  Eco-label  award  scheme138,  considerable  effort  has
been  made  to  involve  the  participation  of  representatives  of  manufacturers  in  the  working
groups,  via  the  various  sector  federations,  in  establishing  criteria  for  a  product  group,  and
representatives of SMEs are specifically invited via UEAPME.

136 

137 
138 

See  “The  SME  Envoy:  an  active  interface  between  the  Commission  and  the  SME  Community”,
SEC(2003) 60 of 21.1.2003
This applies to a limited number of standards.
The  Eco-label  award  scheme  aims  to  promote  products  that  have  a  reduced  environmental  impact
during their life cycle and to provide consumers with better information on the environmental impact of
products.

44