Opinion of the European Economic and Social Committee on ‘Economic diversification in the accession countries – role of SMEs and social economy enterprises’
Date: 2004-04-01
Institutions: European Economic and Social Committee
Subjects: Central and Eastern European countries, EU industrial policy, corporate finance, economic development, small and medium-sized enterprises, social economy, transition economy

30.4.2004

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Official Journal of the European Union

C 112/105

Opinion of the European Economic and Social Committee on ‘Economic diversification in the
accession countries – role of SMEs and social economy enterprises’

(2004/C 112/27)

On 17 July 2003 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of
Procedure, decided to draw up an opinion on Economic diversification in the accession countries – role of
SMEs and social economy enterprises.

The Consultative Commission on Industrial Change (CCIC), which was responsible for preparing the
Committee's work on the subject, adopted its opinion on 15 March 2004. The rapporteur was Ms Fusco
and the co-rapporteur was Mr Glorieux.

At its 407th plenary session held on 31 March and 1 April 2004 (meeting of 1 April 2004), the European
Economic and Social Committee adopted the following opinion unanimously:

1.

Introduction: definitions and objectives

The accession of ten new countries to the European
1.1
Union is an unprecedented historic event, both because of the
number of countries concerned and because of the profound
social and economic changes this will bring for these countries
and for Europe as a whole. With this in mind, and in accord-
ance with the priority of strengthening the EESC's presence in
the debates on the future of Europe (based on the speech made
on 11 December 2002 by the president, Mr Briesch), this own-
initiative opinion is intended as a contribution, emphasising
the participation of civil society and its organisations, to the
process of political opinion-forming during this period of enlar-
gement. (1)

1.2
In addition, this opinion is intended to contribute to the
debate on the consequences of enlargement described in the
Wim Kok report (Enlargement of the European Union — results
and challenges) of 26 March 2003, by emphasising the role
which small and medium-sized enterprises (SMEs) and social
economy enterprises (SEEs) play in economic diversification
(including its social
in the accession countries,
and the challenge of
integrating them fully in the single
market. The EESC wishes to contribute to the various Com-
munity initiatives intended to ensure full success for their
accession, including their economic and social cohesion in the
current industrial changes.

implications)

1.3
SMEs, a term which also includes micro-enterprises with
their special features, are enterprises corresponding to precise
numerical criteria defined by the European Commission (see
Appendix, Table 1) (2).

(1) As early as 14-17 November 2000, at the conference held at the
EESC on enlargement (Towards a partnership for economic growth and
social rights), the members of the Joint Consultative Committees
(JCCs) involving the applicant countries had raised the most impor-
tant problems encountered by those countries and the need to
engage in a dialogue on certain essential themes, such as the SMEs'
contribution to the various economies and the lack of social
dialogue. See EESC opinion 1635/2003.

(2) Recommendation

2003/361/EC,

Recommendation
96/280/EC (OJ L 124 of 20.5.2003, p. 36), which will come into
force on 1.1.2005. From the current Recommendation to the new
one, these definitions remain the same. Only the turnover figures or
the balance-sheet total change.

replacing

1.4
SEEs belong to a group of four families: cooperatives,
mutual societies, associations and foundations. They are charac-
terised by the primacy of their social objectives, rather than the
need for maximum returns — this often gives rise to a link
with their local area and local development — and by the satis-
faction of needs that other sectors of the economy cannot
satisfy alone. Their basic values are: solidarity, social cohesion,
social responsibility, democratic management, participation and
autonomy (3).

1.5
The Lisbon European Council of March 2000 laid down
the objective of making Europe the most dynamic and competi-
tive knowledge-based economy in the world, while stressing
the need to create ‘a friendly environment for starting up and devel-
oping innovative businesses, especially SMEs’ and adding that ‘The
competitiveness and dynamism of businesses are directly dependent on
a regulatory climate conducive to investment, innovation, and entre-
preneurship.’ (4) On that basis the Feira European Council (19
and 20 June 2000) approved the European Charter for Small
Enterprises, which states that ‘Small enterprises are the backbone of
the European economy [and] are a key source of jobs and a breeding
ground for business ideas’ (5). The Lisbon strategy also maintains
that economic growth is a key factor for ensuring social cohe-
Europe.
sion

in

(3) B. Roelants (co-ord): Preparatory Dossier for the First European
Social Economy Conference in Central and Eastern Europe, 2002,
p. 31. Common denominators drawn up on the basis of definitions
prepared by the EU Commission, the Committee of the Regions, the
CEP-CMAF (European Conference of Cooperatives, Mutual Societies,
Associations and Foundations) and the FONDA (linked to organisa-
tions at the origin of the social economy concept).

(4) Presidency conclusions – Lisbon, 23 and 24.3.2000, point 14
(5) The European Charter for Small Enterprises: Luxembourg, Office for
the Official Publications of the European Communities, 2002. The
Commission states that the Charter was recognised in Maribor on
23.4.2002 (see http://europa.eu.int/comm/enterprise/enterprise_po-
licy/sme-package/index.htm). The Committee and the Parliament
continue to urge that the Charter should have legal force, and that
it should be expressly included in the European Convention's
chapter on industry.
‘A strategy for full employment and better jobs for all’, COM(2003)
6 final

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The Commission subsequently argued that
the challenges
making it necessary to adopt the Lisbon agenda are the require-
ments to increase the supply of jobs, raise the employment
improve technical knowledge and ensure an
percentage,
ordered flow from agriculture and industry to services without
worsening the regional disparities in the countries them-
selves (1).

modernising local management models. They have perfected
social and environmental impact assessment systems.

The EESC,

pluralism and

in its opinion 242/2000 (2), stressed the
1.6
importance of SEEs and indicated that they are fundamental to
entrepreneurial
the
economy (3). Most SEEs are included in the EU's standard defini-
tion of SMEs (4). Those which do not match that definition,
because of their size, generally have certain characteristics in
common with SMEs, such as a low level of external investment,
no stock exchange listing, proximity of owner-shareholders,
and a close link with the local social fabric.

diversification

of

1.7
The Commission acknowledged that SMEs are the
bedrock of European industry, with 66 % of total employment
and 60 % of the EU total of value added, excluding the agri-
cultural sector. In 1999 the proportion of the applicant coun-
tries' employment accounted for by SMEs was even higher at
72 %, excluding the agricultural sector. The job total for micro-
is the most significant,
enterprises (fewer than 10 workers)
with 40 % of total employment (5), and is a good argument for
paying special attention to enterprises of
type (see
Appendix, Table 2).

this

(full-time equivalent),

1.8
In the EU, the social and economic importance of the
enterprises and organisations of the social economy is growing:
with about 9 million workers
they
account for 7.9 % of civilian waged employment (6). Moreover,
they involve a considerable proportion of civil society, since it
is estimated that more than 25 % of the EU's citizens are
members of them as producers, consumers, savers, inhabitants
of a dwelling, policy-holders, students, volunteers etc. In the
acceding and applicant countries of central and eastern Europe,
the number of cooperatives alone is estimated at 15,000 enter-
prises, providing more than 700,000 jobs and involving nearly
15 million members; after a period of decline, these too have
entered a new phase of growth (7). SEEs develop particularly in
a number of sectors such as health, the environment, social
services and education (8). Thus they have an essential role in
the creation of social capital, the capacity to employ disadvan-
taged people, social welfare, revitalising local economies, and

(1) Opinion of

the Economic and Social Committee on The social

economy and the single market, CES 242/2000 of 3.3.2000

(2) In a recent study, the OECD specifies that the ‘social economy’ is a
broader concept than the non-profit sector, since it is less strictly
linked to non-distributional constraints, whereby organisations
cannot legally redistribute their surplus to their owners (OECD,
Paris, 2003, The non-profit sector in a changing economy, p. 299).
(3) McIntyre et al.: Small and medium enterprises in transitional econo-

mies, Houndmills: Macmillan, p. 10

(4) Industrial policy in an enlarged Europe, Communication from the
Commission to the Council, the European Parliament, the Economic
the Regions,
and Social Committee and the Committee of
COM(2002) 714 final.

(5) CIRIEC 2000: The enterprises and organisations of the third system:

strategic challenge for employment, University of Liège

(6) Calculated on the basis of the study carried out by the International
Cooperative Alliance in 1997 and funded by the European Commis-
sion.

(7) See the charter of the CEP-CMAF (European Conference of Coopera-

tives, Mutual Societies, Associations and Foundations).

(8) Point 2.1.1.

1.9
In several current EU Member States there is major inter-
action between conventional SMEs and SEEs. Cooperative
banks often promote start-up and development projects by
conventional SMEs. Social economy structures have proved
in strengthening conventional SMEs when these have
useful
wished to form networks, groups or joint support schemes,
achieve economies of scale or set up mutual guarantee schemes
for bank loans.

1.10
The EESC, in its opinion of 24-25 September 2003 on
Industrial change: current situation and prospects — An overall
approach prepared by the CCIC, takes the view that the concept
of change is different from that of restructuring, pointing out
that in fact ‘it is a much more dynamic concept. On the one hand it
embraces the on-going development of the company (establishment,
development, diversification, change); but, on the other hand, the busi-
ness world is closely linked with the European political and social
environment in which it develops, and which in its turn influences the
process of industrial change’ (9). Moreover, ‘Today it is important to
dwell on the proactive concept of change in order better to anticipate
and manage the economic, social, organisational and environmental
repercussions of industrial change’ (10). This concept of change is
particularly important given the accelerating pace of restruc-
turing, in a context characterised by globalisation, EU enlarge-
ment, the deepening of the Single Market, and technological,
industrial and social changes.

1.11
The present opinion takes account in particular of the
Commission report ‘Managing Change’ of 2 November 1998,
drafted by a high-level group chaired by Mr Pehr Gyllen-
hammar (11) on which the EESC issued a critical but positive
opinion, welcoming the fact that it acknowledged that indus-
trial change created new possibilities and that it stressed the
need for job creation, expressing the view that
‘The broad
strategy of seeking stimulus from an approach built on benchmarking,
innovation and social cohesion is valid.’ As regards the SMEs, the
EESC emphasised that they could not overcome on their own
the problems of industries in decline or those resulting from
serious and sudden crises. The EESC took the view that large-
scale changes must be managed through a collective effort
territorial partnerships of a voluntary
based on flexible
nature (12).

(9) Ibid.
(10) Opinion of

the Economic and Social Committee on Managing
Change –Final Report of the high level group on economic and social
implications of industrial change, CES 698/99

(11) EESC opinion of 7.7.1999, OJ C 258 of 10.9.1999, 3.7.2 and 3.7.3
(12) With the exception of Poland and Hungary. See European Commis-

sion: Impact of enlargement on industry,

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1.12
Faced with the industrial changes since the 1990s, with
increasing globalised competition and entrepreneurial concen-
tration, and on the eve of their forthcoming inclusion in the
Single Market, the SMEs and SEEs of most of the accession
countries are coping with enormous challenges. At the same
time, bearing in mind the decisive role they play in socio-
economic terms, it is urgently necessary for the EU as a whole
to reflect on the best way to make the most of their role,
support their adaptation to these challenges, and promote their
innovative and funding capacity,
their entrepreneurial spirit
and their competitiveness.

2. Comments on the special features of the accession
countries as regards SMEs, SEEs and economic change

2.1 Economic changes and diversification in the accession countries

2.1.1
In the course of their transition from a command
economy to a market economy, the accession countries of
central and eastern Europe have undergone a profound indus-
trial change. Liberalisation has been abrupt, with a corre-
sponding loss of traditional export markets, and a sizeable fall
in industrial employment (1).

After a decade of restructuring,

2.1.2
the manufacturing
industries of the accession countries of central and eastern
Europe have come closer to the EU's model for production and
employment structures. Manufacturing industries have taken
advantage of direct foreign investments to modernise, gener-
ating a gap in productivity and profit levels between foreign-
owned and national-owned enterprises. While some countries
have advanced towards sectors with higher added value, the
others appear to maintain a specialisation in labour-intensive,
low-skilled activities, with more market shares in certain indus-
tries (2). In addition, industry has caught up mainly in the large
cities, with the risk of widening gaps between regions in the
future (3). There is also a risk of enterprises of this type relo-
cating to the border countries of the future EU, as labour costs
countries.
rise

accession

the

in

(1) SEC (2003) 234, 24.2.2003, p. 7
(2) Particularly the agri-food and beverages, wood, textile and metal-

based industries.
(3) Ibid., note 18, p. 8

2.1.3
Industrial change in the context of enlargement also
includes a growth of intra-industrial trade and other types of
partnership (joint ventures, mergers,
temporary partnerships
etc.) between the accession countries and those of the EU (4), as
well as sub-contracting by large enterprises to SMEs. This devel-
opment is a decisive factor for ensuring a fairer distribution of
the benefits of enlargement and a smoother integration into the
Single Market. If the resulting economies of scale are signifi-
cant, there can be greater complementarity between large enter-
prises and SMEs, and the latter can have a fundamental role to
play as sub-contractors and suppliers of services.

2.1.4 Market services represent a growing proportion of the
GDP of the accession countries, reaching 54 % in 2001, but in
a context of sub-contracting and interconnections between
industry and services. However, the industry represented 33 %
of their GDP in 2001, and will continue to be important (5).

2.1.5
Apart from the market services mentioned above, and
noting that in absolute terms, between 1994 and 2002, the
majority of new jobs are found in the services sector, employ-
ment in services to local communities has risen very little, or in
some cases has fallen (6). This sector, of considerable socio-
economic importance, also shows a significant gap between the
accession countries and those of the EU, both in terms of
economic importance and in terms of employment (7).

The EESC would point out that SMEs in countries in
2.1.6
transition tend to have greater flexibility and innovation poten-
tial than large companies, with generally higher productivity in
services and in ‘niche’ manufacturing sectors. In general they
show more entrepreneurial
the company
failure rate remains very high, even if in some countries (8) the
ratio between the gross and net rates for SME start-ups is more
favourable than in some of
the EU Member States (see
Appendix, Table 4).

spirit. However,

2.2 Social impact of the changes

2.2.1
The analysis of employment growth by significant
sector in the applicant countries between 1995 and 1999
shows that employment
in SMEs has increased noticeably
whereas that in large companies has declined (see Appendix,
Table 3). According to the report by the European SMEs Obser-
vatory, this growth could be due to as much to job losses in
large companies as to their replacement by SMEs, but did not
make up for job losses (9).

(4) Especially in the case of the Czech Republic, Slovenia, Hungary and
to a lesser extent Poland. This type of trade is seen particularly in
the textile, electrical, optical, and transport-equipment sectors.

(5) Ibid., note 18, p. 1 and pp. 4-5
(6) Especially in Bulgaria, Hungary and Poland.
(7) Vidovic, H., The service sectors in Central and Eastern Europe, Research

Report, September 2002, No. 289, page 16

(8) Such as Poland and the Czech Republic.
(9) Some net losses were noted, particularly in Lithuania and Slovakia.

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2.2.2
The transition period has brought with it growing
poverty and inequality (1). Among other problems, analyses
based on incomplete data show that women are clearly disad-
vantaged on the labour market (2).

In recent years,

2.2.3
the social protection and health
the accession countries have undergone many
systems of
reforms. To a large extent, certainly, these countries are facing
the same problems as the current EU Member States: rising
expenditure and stagnating or falling revenue. Even so, they
generally fall short of the European average in health care
terms. Life expectancy there is 6 years less than that in the
Member States (3).

2.3 Role and challenges of SMEs and SEEs in the accession coun-

tries

2.3.1
The current accounts deficit in the accession countries
at present, and restrictions imposed by the stability pact, will
put further pressures on public expenditure (4). It is therefore
necessary to find innovative ways of meeting public interest
needs (5) — an area where SEEs in particular can play an
important role, as is the case in several EU countries (6). This is
all the more important in former industrial regions, where
there is a general lack of conventional investment, and in rural
regions, where many agricultural SMEs are disappearing. In a
significant number of the acceding and applicant countries of
central and eastern Europe, SEEs are already by far the main
employer of disabled people.

2.3.2
The European Charter for Small Enterprises acknowl-
edges that, while the latter are the backbone of the European
economy, they are also the most sensitive of all to changes in
the business environment. This is even more true in the acces-
sion countries, which have together officially approved the
Charter (7). The challenge for SMEs and SEEs as regards their
capacity to compete in the Single Market is significantly greater
this time than in all
the previous waves of enlargement.
Among the most important constraints upon them are the lack
of skilled labour, access to financing and administrative regula-
5).
Appendix,
tions

Table

(see

(1) Tang et al., 2002: Winners and losers of EU integration, Washington,
World Bank, p. 8. Age is one of the main factors in discrimination.
Other vulnerable groups include the disabled, and minorities such
as the Roma.

(2) Women are more likely than men to leave the labour market defini-
tively. When they do return to the labour market, they are more
likely than men to be unemployed in some of the accession coun-
tries. Cf. UNICE, Economic Survey of Europe, 1999-1, Table 41,
Gender differences in employment in 1997.

(3) According to the AIM (International Association of Mutual Benefit
Organisations). Among the main problems are the rapid rise in
expenditure,
long waiting lists, a lack of data for assessment and
organisation of services, under-the-counter payments to providers of
medical treatment, etc.

(4) Kumar et al., 2002: Transitional

impacts and the EU enlargement

complexity, Ljubljana, University of Ljubljana, pp. 25-36

(5) Tang et al., 2002, p. 44
(6) Cf. in particular the Italian system of social cooperatives. See also
the Best Procedure Report 2001 (SEC 2001/1704 – 29/10/2001).
The measures described in the BEST report are an important source
of knowledge for improving the business environment in the acces-
sion countries.
(7) Maribor 2003

2.3.3
The European Commission's Green Paper on Entrepre-
neurship states that SEEs, because they have to apply ‘business
principles and efficiency to achieving social and societal objectives, …
face particular challenges in accessing finance, management training
and advice.’ (8) These challenges are all the more serious in the
accession countries, where they are not the only ones faced by
SEEs. In particular, cooperatives there are often regarded as a
vestige of the earlier regime, although they appeared there a
century and a half ago, and have generally adapted well to the
introduction of the market economy. The regulations or preju-
dices to which they are subjected often limit their access to the
market. However, in economies in transition, the combination
of small cooperative producers, local cooperative savings and
(as
cooperative lending institutions, and local authorities
promoters, guarantors, and sometimes partial holders of finan-
cial holdings both in production and in financing institutions)
is entirely natural (9).

2.3.4
SMEs and SEEs in the accession countries are an
important instrument of employment and re-employment in
the major industrial changes in progress, from declining sectors
to traditional sectors
and those which reduce employment
(crafts and trades) and others which are expanding, such as
services to enterprises, the new information and communica-
tion technologies, high-technology sectors, construction and
public works, proximity services
and
tourism.

(including health)

2.3.5
The SMEs and SEEs in these countries can play an
important role in this process of change in various ways,
already tried out in the EU countries, with many cases of good
practices: through the employment of people new to the labour
market; through support for the innovative capacity of micro-
enterprises and small enterprises; through the reemployment of
people made redundant in businesses obliged to reduce their
staff or shut down; through setting up social welfare mutual
societies;
in the
through the creation of new businesses
growing sectors; through the development of services and sub-
contracting; through the transfer of enterprises in crisis to their
workers; and through qualitative transformation within the
same sector. In addition, SEEs can make certain specific contri-
butions to this process of change both through their capacity
to train entrepreneurs, which has already been demonstrated in
the present EU countries, and through the values they promote,
such as socially responsible entrepreneurship, democracy and
citizens' participation,
(including financial) of
involvement
workers in the enterprise, social inclusion, and interest in local
and sustainable development.

(8) European Commission: Green Paper – Entrepreneurship in Europe,

COM(2003) 27 final, point III.C.ii

(9) McIntyre, R.: The complex ecology of small enterprises (Chapter 3), in
McIntyre and Dallago (eds.), 2003, Small and Medium Enterprises in
Transitional Economies, Palgrave, Macmillan, in association with the
United Nations University and the World Institute for Develop-
mental Economics Research, pp. 49-50. The conclusions of the first
Conference on the social economy in the central and eastern Euro-
pean countries are in line with this view. See http://www.cecop.org/
praha
Glinkina, S.: Small businesses, survival strategies and the shadow
economy (Chapter 4), in McIntyre and Dallago (eds.), 2003, Small
and Medium Enterprises
in Transitional Economies, Palgrave,
Macmillan, in association with the United Nations University and
the World Institute for Developmental Economics Research

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2.3.6
Regularising the shadow economy is a challenge to be
met in the accession countries. According to a 2003 study by
the United Nations University (1), this economy is unstable and
cannot be a motor for growth or capital accumulation, as its
primary function is survival by maintaining consumption. It
contravenes labour standards and has negative macro-economic
effects in the long term, such as erosion of the tax system, of
the basis of the foreign exchange market and of social protec-
tion, thereby jeopardising effective macro-economic manage-
ment. This economy preserves an irrational sectoral structure
with an absolute predominance of micro-enterprises and low-
level capitalisation, weak entrepreneurial initiative and a tech-
In the intensified
nology which soon becomes outdated.
competition which will follow accession to the EU, an indus-
trial policy for the accession countries must urgently take
account of this worrying situation, which the authorities of
these countries should manage firmly.

3. Recommendation concerning an integrated programme
for the promotion of SMEs and SEEs in the economic
diversification of the accession countries

3.1 General comments

The features that SMEs (including micro-enterprises) share with
SEEs (see point 1.6), and the positive interplay that exists
between them (see points 1.9 and 2.3.5), are powerful argu-
ments for launching a new joint effort at EU level to promote
and support
them. The particularly serious challenges that
SMEs and SEEs are facing in the context of accession (see
section 2) make it particularly important to introduce support
measures, so that these two types of enterprise can make an
effective contribution to the development of the new Member
States.

The EESC has taken account of the existing programmes for
supporting SMEs in particular, but also notes the unsatisfactory
nature of the existing structures for supporting SEEs and for
promoting joint initiatives between SMEs and SEEs.

The EESC therefore proposes that an integrated programme be
launched to support SMEs and SEEs in the accession countries.
Such a programme should be promoted jointly by the EU
Commission,
the European
the European Investment Bank,
Investment Fund, the governments of the countries involved
and the organisations that represent and support SMEs and
level. The Structural Funds,
SEEs at European and national
which will become accessible to the accession countries from
May 2004 onwards, should play a leading role in funding the
activities of
this integrated programme. A link should be
ensured with the action plan relating to the Commission's
spirit.
communication

entrepreneurial

on

(1) It is particularly urgent for SMEs to be classified according to the

NACE system.

3.2 10-point programme

3.2.1 Inte g r a ti ng t h e da ta

In most of the accession countries, statistics relating to SMEs
and SEEs and their representation and support organisations
are still highly inadequate and lack uniformity (2). SEEs suffer
even more than conventional SMEs from such lack of precision.
At present there are no precise data on such enterprises in
these countries, beyond the data provided by their federations
where those exist. The EESC regards as very necessary the Euro-
pean Commission's proposal to set up a system of satellite
accounts with the national statistical institutions, already tried
out in some Member States (3), while setting up a data collec-
tion system which is simple and clear enough for SMEs and
SEEs to provide the data without difficulty. (4)

3.2.2 Imp r ovi ng

comp li a n ce w i th

e ffe c ti v e
i mp le me nta ti on of th e a cq ui s c ommuna utai r e ,
a nd th e le g a l a nd a dmi ni str a t i ve fr a me w or k

a nd

3.2.2.1
Although a considerable effort is being made in the
accession countries to incorporate the acquis communautaire into
national laws and standards and then implement it as part of
public policies, this work is still very incomplete as regards that
part of the acquis that concerns SMEs and SEEs, especially in
such areas as business policies, promoting SMEs, employment,
social policy, social
inclusion and corporate social responsi-
bility, particularly as regards respect for the environment. This
process should be substantially strengthened, particularly by
training administrative staff and by assisting SMEs and SEEs in
their efforts to comply progressively with Community stan-
dards, with the support of the EU Commission. The work
currently being done in the field of the acquis and its imple-
mentation under the PHARE Business Support Programme
should be continued. Moreover, although the accession coun-
tries have considerably improved their legislation on SMEs
(particularly as regards bankruptcies), progress is still very
slight as regards legislation intended to promote SEEs. The
latest changes to the cooperative legislation of certain accession
countries even constitute steps backward. Legislation on coop-
eratives and other types of SEE should therefore be reformed in
several accession countries, and should be brought more into
line with the statutes of the European cooperative society (and
the future statutes of the European association and the Euro-
pean mutual society). Exchanges and comparative studies on
legislation relating specifically to SMEs and SEEs should be
launched. Moreover, under the laws of several accession coun-
tries the costs involved in setting up SEEs should be reduced,
considering that they cannot call on external investments and
that they usually remain anchored in the fabric of local society.

(2) European Commission, Consulting document on Cooperatives in

Enterprise Europe, 7.12.2001, p. 34

(3) European Commission, Consulting document on Cooperatives in

Enterprise Europe, 7.12.2001, p. 34

(4) Account should also be taken of Recommendation 193/2002 of the
International Labour Organisation, adopted almost unanimously
(apart from two abstentions) and particularly by the governments of
the 15 EU Member States and the 10 accession countries, and espe-
cially of Article 7 on tax policies and public procurement, and of
Articles 4 and 6 on cooperatives belonging to a wider sector also
including mutual societies and associations.

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For conditions for access to the Single Market to be
3.2.2.2
really fair,
it is necessary to modify as soon as possible the
rules that restrict the access of SEEs to public works contracts
in several accession countries. Moreover, account should also
be taken in public procurement, as in taxation, of the produc-
tivity costs borne by some SMEs, and particularly SEEs (1), in
carrying out policies such as employing disadvantaged people
or respecting social and environmental standards going beyond
the legal minima41.

3.2.3 A c t i ve p r omot i on of e ntr e p r e ne u r sh i p t h r ou g h

i nf or ma ti on a nd e du c a t i on

3.2.3.1 Whereas much progress seems to have been made in
for
the accession countries on facilitating the procedures
setting up SMEs, particularly with the setting-up of information
centres at local level, much remains to be done to ensure that
public authorities are equally active in providing information
on SEEs. Moreover, these information centres should do more
to promote traditional trades and promising sectors, such as
services to enterprises, proximity services, health services, ICT-
related activities and tourism.

as

training schemes

should ‘appropriate

The EESC is pleased to note that

3.2.3.2
the European
Charter for Small Enterprises declares that ‘Specific business-
related modules should be made an essential
ingredient of
education schemes at secondary level and at colleges and
for
universities’
managers in small enterprises’. However, this aim still seems far
from being achieved in most of the accession countries. More-
over, these teaching programmes should also include a compo-
nent on SEEs, which is not generally the case. The entrepreneur
training potential of SEEs, which has been verified in the EU
Member States, should be brought to the fore by promoting
inter alia enterprise-to-enterprise training, and by giving SEE
managers the opportunity of sharing their experience in enter-
prise management training centres for SME managers.

3.2.4 Pr omoti ng su p p or t a nd a dv i ce c e ntr e s for t h e
c r e a t i on, de v e l op me n t a n d tr a n sfe r of e n te r -
p r i se s

3.2.4.1
Just as start-ups should continue to be vigorously
encouraged, above all in the most promising sectors, so the
vital importance of making a success of transfers of enterprises
to which there is no heir or which are in crisis should not be
neglected in the current industrial changes. Successful transfers
can safeguard not only the enterprise's activity, but also derived
jobs and hence a substantial part of the local socio-economic
fabric (2). Transfers of enterprises to their workers, particularly
through SEEs, have shown very high levels of success in the EU
countries when the backup was adequate. This experience
to good use for any type of SME transfer.
could be put

(1) Activities covered by the concept of social responsibility of enter-
prises. The development of reporting activities would make it
possible to take account of these progressive processes conducive to
sustainable development.

(2) In addition, it has been observed that survival chances for transfers
are on average higher than those for start-ups. See European
Commission:
‘Helping the transfer of businesses’, DG Enterprise,
2003.

3.2.4.2
For every stage in the life of an enterprise, including
its creation and transfer, SMEs and SEEs need a true support
policy, as well as high-quality support, consultancy and backup
services on enterprise strategy, design, innovation and techno-
logical know-how, research and development, quality certifica-
tion etc., as shown also by a number of successful experiments
in industrial areas of the EU. Among other things, the emphasis
should be on cooperation between these support centres and
universities, and on promotion of entrepreneurship among
women and young people. Encouragement should also be
given to support for the marketing and export of SMEs' and
SEEs' products, especially through the recognition of typical
products, and chambers of commerce and trades, together with
occupational organisations, should be involved in promoting
these products.

3.2.5 Imp r ovi ng

th e

con di ti on s

for

fu n di ng

a nd

a cce ss to fu nding

3.2.5.1
The question of capital for start-ups and transfers of
SMEs and SEEs is fundamental. Improving the financial frame-
work for setting up and developing enterprises of these types,
and improving access to the Structural Funds and encouraging
the initiatives of the European Investment Bank, as proposed
by the Charter for Small Enterprises, are conditions that are as
fundamental as support services. The EESC proposes that a
financial mechanism be set up to combine various intervention
tools over the entire growth cycle of SMEs and SEEs in the
accession countries, with the EIB, the European Investment
Fund and social economy banks being involved, together with
funding through the Structural Funds (3). Financial systems of
public support for SME and SEE start-ups and transfers, and
multiplier systems through solidarity funds, such as those that
have already been successfully tried out in certain European
countries, should also be encouraged (4).

(3) Various European financial bodies (Crédit Coopératif, Crédit Mutuel
and ESFIN in France, Coopfond (Legacoop)
in Italy, and SOFI-
CATRA in Belgium) are already working, in contact with the Euro-
pean Commission, to set up a ‘Coop-Est’ project involving various
financial instruments to meet the needs for funding structures for
SEEs.

(4) For the public mechanisms, especially in Italy and Spain, with the
single payment of unemployment benefits. For
the multiplier
mechanisms, groups of SEEs have, in several centres of excellence in
the EU, set up solidarity and risk-capital funds to fund their develop-
ment. These funds generally have a multiplier effect on other
funding, such as lending by commercial banks, and have shown
their capacity to generate enterprises and jobs. Such funds already
exist within some cooperative federations in the accession countries,
but this type of effort should be vigorously supported in the context
of the Structural Funds.

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Official Journal of the European Union

C 112/111

3.2.5.2
Attention should also be drawn to the role which
can be played by ethical and solidarity-based funding networks
in providing suitable financial tools to the accession countries'
SMEs and SEEs. The Italian Parliament recently echoed this in a
resolution adopted unanimously in October 2003. In particular,
it is pointed out that various alternative-finance organisations
are already working on a joint project which could serve as a
guide for the new arrangements now being developed (1).

3.2.5.3
Promotion should also be given to the idea of setting
up mutual guarantee societies between SMEs and between
SEEs, so that they can guarantee bank loans between them-
selves – a system which has proved itself in several EU coun-
tries, often in the form of a cooperative, mutual society or asso-
ciation (2).

3.2.5.4
The EESC emphasises that it is also important to
encourage solidarity-based funding of sickness, invalidity and
pension costs by specialised SEEs such as mutual societies, like
those which exist in the EU Member States.

3.2.6 Pr omoti ng SM E s a nd SE E s i n th e conte x t of

l oc a l de v e l op me n t

SMEs and SEEs form part of the local fabric. Hence they have a
fundamental role to play in the context of local development,
and the local authorities should set up active partnerships with
them to this end. (3) The partnerships between local authorities
and social economy actors which exist in the EU should be
actively promoted in the accession countries (4).

3.2.7 Su p p or t i ng

t h e

de v e lop me nt

of

e n te r p r i se

sy st e ms

The Charter for Small Enterprises underlines the importance of
also developing groups, amalgamations, networks and clusters
of enterprises. The experience gained in the EU countries, parti-
cularly with groups and consortia of cooperatives and mutual
societies, often on a territorial or sectoral basis, shows that the
development of systems of enterprises can be of vital impor-

(1) By setting up a European Federation of Ethical and Alernative Banks
(Febea) and a European Ethical and Alternative FinanceCompany
(Sefea).

(2) See André Douette (2003): La garantie des prêts aux petites et moyennes
entreprises – Les systèmes de garantie membres de l'Association européenne
du Cautionnement Mutuel, Association européenne du Cautionnement
Mutuel.

(3) Like those which exist within the European network of towns for
the social economy (REVES), and which can be classified in three
distinct categories:

the municipality of Genoa,

(4) the creation of mixed public-private structures: for example, the Job
Centre of
the ‘Gagner’ agency in
Roubaix, and the SAKA BYAGARD/SOKOYAN KYATALO day care
centre in Kokkola, Finland;
— public support for the creation of general interest bodies, such
as Genoa's Immigrant Services Centre or the ARKESIS integrated
network for local development in Reggio Calabria;
— the service partnership, where the public sector provides a
reference framework for the management and provision of
general
interest services by SEEs: for example, Pfefferwerk
GmbH in the centre of Berlin, and cooperatives which
directly manage the job centres of the provinces of Forlì,
Cesena and Ravenna in Italy.

— Other important examples of multi-partnership at local level
in the EU involving SEEs include the system of Italian social
cooperatives combined in the Gino Matarelli Consortium for
Social Cooperation (CGM), the home help sector, the new
arrangements for the Société Coopérative d'Intérêt Général
(SCIG) in France, the Solidarités des Alternatives Wallonnes
network, women's cooperatives in Sweden, etc.

Ibid. See also Committee of the Regions: Draft opinion of the
Committee of the Regions on Partnerships between local and regional
authorities and social economy organisations: contribution to employ-
ment, local development and social cohesion, CdR 384/2001.

tance for SMEs and SEEs with a view to defining together long-
term enterprise strategies,
increasing entrepreneurial scales in
the same sector or region, developing their technological capa-
city and improving their competitiveness, while leaving the
enterprises free to make their own decisions. In addition, the
enlargement and deepening of the Single Market is a reason
why SMEs and SEEs in the present and new EU Member States
should use the future trans-European instrument that the Euro-
pean cooperative society will be. The EESC considers that the
preparation of
these various enterprise systems should be
actively encouraged in the accession countries.

3.2.8 S tr e n g th e ni ng th e i nsti tu ti ona l r e p r e se nta t i on

of SM E s a nd SE E s

it

is necessary to develop,
The EESC takes the view that
strengthen and make more effective the representation of the
interests of SMEs and SEEs in the accession countries by repre-
sentative organisations, the latter's capacity to negotiate with
the authorities, their strategic action of promoting enterprise
support services, and links among these organisations at all
levels. The SMEs and SEEs in these countries must make their
voices heard as key actors in the economic and social fabric.
Hence the importance of continuing the considerable effort
launched by the Phare Business Support Programme to help
strengthen the representative organisations of SMEs and SEEs
in the accession and applicant countries of central and eastern
Europe (5).

3.2.9 De v e lop i ng th e soc i a l di a log u e

SMEs and SEEs in the accession countries must also be consid-
ered in their role as employers, even if work in them as a
conventional employee coexists with work as a self-employed
person and with worker ownership. As employers they must
undertake to respect European and world labour standards. In
addition, their representative organisations must enter into the
social dialogue as independent actors, discussing not only
labour relations but also all social policies with trade union
organisations and the other economic and social actors at all
levels. Activities in this direction should be actively promoted
under the programme proposed here.

(5) This point is developed specifically in point 10 of the European

Charter for Small Enterprises.

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Official Journal of the European Union

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3.2.10 E ncou r a g i ng a nd de ve lop i ng a c ti v i ti e s for th e
e x ch a ng e of b e st p r a cti ce b e t w e e n S M Es a nd
SE E s i n c u r r e nt E U c ou nt r i e s a nd th ose i n th e
ac ce ssi on countri es

Initiatives by the EU Commission (1) show the importance of
systematically enabling SMEs and SEEs in the accession coun-
tries to benefit from the experience of their counterparts in the
EU countries in each of the areas discussed in points 3.2 to
3.2.9. Particular encouragement should be given to the EU
Commission's efforts to set up a network for exchanging good
practices regarding the quality of support services for SMEs.
Such exchanges enable entrepreneurial actors in the accession
countries to improve their development strategy by engaging in
strategic consideration of the proposed models of excellence,
and to establish themselves increasingly as actors which have
to be taken into account by the public authorities in their poli-
cies.

4. Conclusions

4.1
The EESC acknowledges that the success and effective-
ness of SMEs and SEEs are not automatic and do not depend
solely on the enterprises themselves. The opportunities for
development of these enterprises and for them to fulfil their
roles in the transitional economies and the economic diversifi-
cation of
the accession countries must be supported by a
favourable environment which takes account of their particular
characteristics. Such an environment should be promoted by
means of a specific programme for these countries, comprising

Brussels, 1 April 2004.

the ten points mentioned above. The EESC calls on the
Commission to promote such a programme for SMEs and SEEs
in the accession countries.

4.2
In line with its opinions and declarations of recent years,
the EESC intends to contribute both to launching the new
support measures and to following them up. In particular, the
EESC, in the context of its work on the internal market, will
closely follow the development of SMEs and SEEs in the EU,
paying particular attention to the new Member States.

4.3
The EESC takes the view that industrial policy in an
enlarged Europe must take account much more effectively of
the needs and challenges of SMEs and SEEs in the accession
It would draw attention to their needs, such as
countries.
management
innovation, quality,
design, funding and cooperation instruments such as clusters,
second- and third-degree structures, networks etc., which will
be more and more necessary to meet the challenges of EU
enlargement and internationalisation.

education and training,

including the Commission,

4.4
Finally, the EESC undertakes, and calls upon all the EU
to develop a far-
institutions,
reaching dialogue with all the representative institutions and
managers of SMEs and SEEs in the accession countries, in order
to meet together the very serious challenges facing these enter-
prises during the process of their countries' accession to the
EU, while remaining aware that this is a major development in
the history of twenty-first century Europe as a whole.

The President

of the European Economic and Social Committee

Roger BRIESCH

(1) Particularly the Phare Business Support Programme with the

UAPME's BSP1 and BSP2 for SMEs, and the CECOP's