WRITTEN QUESTION E-0101/04 by Marjo Matikainen-Kallström (PPE-DE) to the Commission. Position of SMUs in the system for the funding of the EU's research activities.
Date: 2004-01-22
Institutions: European Parliament, Provisional data
Subjects: EU programme, EU research policy, company research, economic intelligence, research project, small and medium-sized enterprises

3.4.2004

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Official Journal of the European Union

C 84 E/761

Can the Commission state how electricity prices for private households, small and medium-sized
enterprises and large-scale consumers have evolved over the past five to ten years in the EU countries
that have fully or partially privatised the energy sector?

How have they evolved in energy undertakings that are under State control?

How has investment in the electricity networks of European energy concerns developed since their (partial)
privatisation?

To what extent have private energy companies invested in alternative energy sources in the past ten years?

Answer given by Mrs de Palacio on behalf of the Commission

(1 March 2004)

Prices have been relatively stable since 1997 in nominal terms; this amounts to a considerable reduction in
real terms across all groups. Small and medium sized enterprises have been the beneficiaries of price
reductions, especially where competition has been introduced. Non-liberalised Member States have also
delivered stable prices, but on a higher level. Many of the differences in prices between Member States can
be explained by a lack of sufficient interconnection capacity which segments the European market. The
Commission has examined this issue a number of times, notably in the Green Paper towards a European
strategy for the security of energy supply (1) and most recently in the Communication on Energy
Infrastructure and Security of Supply (2).

2003 has seen an upward trend which is expected to continue into 2004 since new investment in
generation capacity will be needed in the next few years. A separate information note providing some
background to current price trends will be sent direct to the Honourable Member and to the Secretariat
General of the Parliament.

It is difficult to draw any firm conclusions about the effect of different ownership structures. In the
countries which have a significant degree of state ownership of electricity generation, such as Ireland, Italy
and Portugal, prices are rather high with France around the EU average, whereas prices for households in
Greece are very low. In the Member States with ‘privatised’ electricity provision, prices in Belgium and
Germany are above and those in the Nordic Member States below the EU average.

The Commission does not have detailed information on the level of investment by network companies.

The ‘Bundesverband Windenergie’ reports that cumulative investment of over EUR 1 billion has been made
by private companies in Germany since 1990. Wind installations in Germany currently comprise around
half of the total in the EU.

(1) COM(2000) 769 final.
(2) COM(2003) 743 final.

(2004/C 84 E/0858)

WRITTEN QUESTION E-0101/04

by Marjo Matikainen-Kallström (PPE-DE) to the Commission

(22 January 2004)

Subject: Position of SMUs in the system for the funding of the EU’s research activities

One of the objectives of the Sixth Framework Programme for Research is to enhance the competitiveness
of the EU and for many years now SMUs have been recognised as the real generators of such improved
competitiveness.

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Official Journal of the European Union

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3.4.2004

the number of SMUs taking part

in the Sixth Framework Programme has decreased
Nevertheless,
substantially. The large-scale measures provided for by the Framework Programme, such as the IPs,
(integrated projects) put firms off and the networks of excellence are often regarded as being primarily
intended for universities and similar bodies. The Fifth Framework Programme made specific provision for
SMUs in the form of the CRAFT instruments, offering undertakings a gateway to international cooperation.
Unfortunately, the proportion of funding earmarked for CRAFT has been drastically reduced under the
Sixth Framework Programme, giving rise to merciless competition among undertakings and needlessly
raising the threshold for the award of funding.

Parliament has repeatedly urged that 15 % of the funding under the Framework Programme should be
reserved for SMUs, a call which unfortunately has gone unheeded. For its part, the Commission has
falsified the statistics, massaging them by categorising as SMUs,
for example, non-profit-making
undertakings, which may seemingly also include university foundations and other similar bodies.

As a result of this window dressing, the statistics have a better look, apparently showing an SMU
participation rate of more than 10 % in many sectors. This clearly does not reflect either the original
intention or the original spirit of the framework programmes, given that non-profit-making undertakings
make no contribution whatsoever to the competitiveness of the EU.

Barely a day goes past without another fine speech being made about the brilliant future awaiting SMUs.
However,
importance for the
competitiveness of the EU, for employment and for national economies in general.

their position needs to be improved here and now, given their vital

What measures does the Commission intend to take in order to encourage participation by ordinary SMUs
in European research projects?

Answer given by Mr Busquin on behalf of the Commission

(4 March 2004)

Through the Decisions on the 6th Framework Programme (FP6) and on the Specific Programmes
‘Integrating and Strengthening the Foundations of the European Research Area’ and ‘Structuring the
European Research Area’, SME-participation is strengthened and stimulated:

(cid:1) at least 15 % of the budget allocated to the seven Priority Thematic Areas (PTA) is to be granted to
SMEs (± EUR 1700 million). This represents a major increase of this target which had been set at 10 %
for the 5th Framework Programme (FP5);

(cid:1) EUR 430 million are devoted to horizontal research activities involving SMEs;

(cid:1) The horizontal research activities involving SMEs and/or SME-associations include co-operative

research (CRAFT) (± EUR 320 million) and collective research (± EUR 110 million).

Economic and Technological Intelligence activity (ETI) is one of the activities within the Research and
Innovation part of the Specific Programme ‘Structuring the European Research Area’. The major purpose
of the ETI-projects is to create the right conditions for SMEs to participate in FP6-projects.

In addition, it must be highlighted that the Commission has been pro-active in stimulating and promoting
SME-participation in FP6:

(cid:1) a first initiative has been the creation of a dedicated SME-NCP-network. Through this network, SMEs
and the research community at large are being informed and stimulated to combine their efforts in
participating in FP6;

(cid:1) a second initiative has been the creation of a Commission SME Task Force involving all the services
involved in the operational management of FP6. The major objective of this Task Force is to monitor
SME-participation in FP6 and to propose new initiatives or corrective measures to further promote
SME-participation.

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During the first FP6 implementing year, it must be mentioned that:

(cid:1) following the first calls for horizontal research activities in FP6, about 1 070 SMEs will be awarded a

research contract;

(cid:1) following the first calls for proposals in FP6 PTA, about 2 450 SMEs will be awarded a research

contract.

(cid:1) the Commission launched a first call for proposals for ETI in April 2003. As a result of the first call,
20 projects have been retained which will receive a total funding of EUR 20 million. The projects
cover a range of industrial sectors and the first ETI-projects have started their activities.

Although the relevant calculation for the achievement of the 15 % target is the allocation of Community
financial contribution to SMEs at the end of the projects, monitoring of SME participation in FP6 is already
done at different stages from proposal submission, evaluation and selection, until final distribution of EU
financial contribution between contractors.

As a consequence, and according to the results of the first FP6 PTA calls, a number of corrective measures
are currently under discussion in the SME Task Force. They include:

(cid:1) making Workprogrammes more SME-friendly;

(cid:1) topping up of new instrument projects from the first calls;

(cid:1) integrated Projects (IP) dedicated to SMEs.

The implementation and timing of the above described measures or other initiatives will depend on the
needs and resources of the PTA involved.

Furthermore, two large scale European Networks, namely the IRC Network and the Euro Info Centres,
continue to provide information and support to a large number of SMEs of any size operating within all
European countries (including the Accession Countries) and have been doing so for many years. Both
Networks contribute significantly to increasing awareness on research and innovation within the SME
community. Moreover, in the area of knowledge transfer to SMEs that is particularly important for their
competitiveness in today’s global environment, around 50 000 technology profiles were published and 500
trans-national technology transfers were reported by the IRC Network in 2002.

Finally, as far as the definition of small and medium sized enterprise (SME) is concerned,
it must be
highlighted that the definition applicable for FP5 and for FP6 is the one given in the 1996 Commission
Recommendation 96/280/EC (1) based on the following four criteria: number of employees (< 250), annual
turnover (< EUR 40 million) or annual balance sheet total (< EUR 27 million), and independence. It is this
definition that legally has to be applied for the production of statistical data on SME-participation.

The concept of enterprises as being any entity engaged in an economic activity and irrespective of its legal
form corresponds to the concept of
Justice and the
Commission in the field of competition and state law. In reply to the Honourable Member’s concern, it is
therefore possible that certain non-profit organisations legally have to be considered as SMEs too.

‘enterprise’ used constantly by the Court of

Furthermore, new SME definition has been adopted by the Commission, and will enter into force on 1st
January 2005. In this new definition, the ceilings for annual turnover/balance sheet total are increased to
EUR 50 million and EUR 43 million respectively, and guidelines are given for the calculation of the
number of employees. In addition, the concept of independence has been further developed and three
categories of enterprises are identified: autonomous, partner and linked.

(1) Commission Recommendation 96/280/EC of 3 April 1996 concerning the definition of small and medium-sized

enterprises, OJ L 107, 30.4.1996.