Decision No 593/2004/EC of the European Parliament and of the Council of 21 July 2004 amending Council Decision 2000/819/EC on a multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005)
Date: 2004-07-21
Institutions: Council of the European Union, European Parliament
Subjects: aid to undertakings, business policy, business start-up, early-stage capital, entrepreneurship, investment protection, small and medium-sized enterprises, start-up

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Official Journal of the European Union

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DECISION No 593/2004/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 21 July 2004

amending Council Decision 2000/819/EC on a multiannual programme for enterprise and entre-
preneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005)

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

(5)

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 157(3) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and
Social Committee (1),

After consulting the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty (2),

(6)

Whereas:

(1)

(2)

(3)

(4)

On 5 November 1997, the Commission adopted Deci-
sion 97/761/EC approving a support mechanism for the
creation of transnational joint ventures for SMEs in the
Community (3).

The ETF Start-up Facility, the Joint European Venture
(JEV) programme and the SME Guarantee Facility were
measures provided for in Council Decision 98/347/EC of
19 May 1998 on measures of financial assistance for
innovative and job-creating small and medium-sized
enterprises (SMEs) — the growth and employment initia-
tive (4).

The multiannual programme
set up by Decision
2000/819/EC (5), aims at improving the financial envir-
in particular by improving the
onment for business,
functioning of the ETF Start-up Facility, amending the
SME Guarantee Facility and, with regard to JEV, by
using, for the benefit of undertakings planning to enter
into a transnational partnership,
commitments
effected up until 31 December 2000 under Decision
98/347/EC.

the

the

Start-up Facility,

The purpose of
JEV
ETF
programme, and SME Guarantee Facility must be to effi-
ciently address market failures in the access for SMEs to
risk capital
through enhancing participation of both
private and public actors, with the aim of reaching distri-
bution rates of 100 %.

(1) Opinion delivered on 30 June 2004 (not yet published in the Offi-

cial Journal).

(2) Opinion of the European Parliament of 22 April 2004 (not yet
Journal) and Council Decision of

published in the Official
19 July 2004.

(3) OJ L 310, 13.11.1997, p. 28.
(4) OJ L 155, 29.5.1998, p. 43.
(5) OJ L 333, 29.12.2000, p. 84. Decision amended by the 2003 Act

of Accession.

shown that

IV of Annex II

to Decision
According to point
2000/819/EC, experience has
the JEV
programme needs to be simplified in order to enable
SMEs' requests for financial contributions to be dealt
with quickly by
and
Commission departments and to ensure that Community
resources are used correctly. It was also stated that the
Commission was examining the possibility of adapting
the eligibility criteria in order to respond more effec-
tively to the needs of SMEs with regard to cross-border
investments, including those in applicant States.

intermediaries

financial

the

On 10 October 2002 the European Parliament adopted
a resolution on the Report from the Commission to the
European Parliament and the Council on Growth and
Employment Initiative — measures on financial assis-
tance
and
medium-sized enterprises (SMEs) (6), where it notes that
the JEV programme in its current form is no longer
appropriate.

and job-creating

innovative

small

for

(7)

(8)

(9)

The Commission's
the Growth and
evaluation of
Employment Initiative as at 29 May 2002 concludes that
the take-up of the JEV programme by the market is low,
the job creation effect limited and the administrative
cost very high and that JEV should be phased out as
soon as possible.

For reasons of cost-efficiency, the Community should
withdraw progressively from programmes that involve
micro-management of small amounts of money, as is the
JEV
case with the projects
programme.

financed under

the

After careful analysis,
it has to be concluded that a
substantial simplification of the JEV programme is not
possible, since any substantial change to the structure or
eligibility criteria of the programme would change its
nature and therefore be outside the scope of the legal
basis (Decision 98/347/EC). Therefore it would not be
possible to use the remaining committed budget nor
would it be possible to use the budget for projects invol-
ving the then accession countries and the candidate
countries.

(6) OJ C 279 E, 20.11.2003, p. 78.

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(10)

The budget for the JEV programme was committed on
the basis of
framework agreements signed with the
financial intermediaries in the JEV network, thus creating
a direct legal relationship between the Commission and
these intermediaries. Therefore a replacement of these
existing framework agreements with direct legal agree-
ments between the Commission and SMEs, which,
in
this particular programme, would have resulted in
simplification and improved protection of the financial
interests of the Community, is not possible.

(11) Only relatively minor procedural changes would be
committed
possible without
losing the
budget, and these are deemed to be insufficient
to
ensure that the JEV programme performs significantly
better.

remaining

(12)

(13)

(14)

(15)

(16)

It is not possible to use the remaining committed budget
for projects involving the then accession countries and
the candidate countries, since this budget was committed
under
Initiative
and
(1998-2000) and is therefore reserved exclusively for
those states that are members of the European Union
and European Economic Area, as provided by Deci-
sion 98/347/EC.

the Growth

Employment

Since the phasing-out of the other two European trans-
national joint venture programmes — European Com-
munity Investment Partners (ECIP) for the developing
countries in Asia, Latin America,
the Mediterranean
region and South Africa (ALAMEDSA countries) in 1999
and the Programme to promote SME joint ventures and
other joint agreements (JOP) in the Central and Eastern
European Countries
(CEECs) and New Independent
States (NIS) in 2000 — many financial intermediaries in
the JEV network have scaled down or ceased this activity
because of the low volume of JEV applications from
SMEs with the result that in the majority of Member
States, in reality,
it is no longer possible to apply for
participation in the programme.

In view of the clear conclusion of the evaluation, it is
not considered appropriate to propose replacing the JEV
programme with a similar one.

The phasing-out of the JEV programme should not affect
the rights and obligations of the Community, the finan-
cial intermediaries or the beneficiaries (SMEs) that relate
to approved projects.

In observance of their legitimate expectations, the finan-
cial intermediaries should be allowed to present applica-
tions for financial contributions for SMEs for a certain
period after this Decision has been adopted.

(17) On 23 October 2003 the European Parliament adopted
a resolution on entrepreneurship in Europe, where it
calls for the establishment of systems allowing improved
access, in particular for small and micro-enterprises, to
European Investment Bank/European Investment Fund

(18)

(19)

(20)

(21)

funds for investments in new technologies and invest-
ments linked to training.

and

entrepreneurship

For the purpose of promoting innovation, research and
development
as
requested by the Barcelona Council, an environment
favourable to private sector investment in research and
through venture capital,
development,
should be encouraged.

in particular

SMEs,

by

The Commission has committed itself to reforming the
existing multiannual programme for enterprise and
entrepreneurship in due time taking into account the
necessity of promoting cooperation between enterprises
and business organisations and of supporting dialogue
between horizontal and sectoral or professional organi-
sations of small and micro-enterprises and craft enter-
prises.

The Council of 26 November 2002 stated that Member
States, the Commission and financial institutions should
consider how to improve the financial framework for
biotechnologies.

and

The European Parliament requested, in its resolution on
of
sciences
life
21 November 2002 (1),
the Commission should
identify how to overcome the issue of
insufficient
funding regarding biotech start-ups and asked the Euro-
pean Investment Bank to give favourable consideration
to follow-up actions.

biotechnologies

that

(22) Decision 2000/819/EC should be amended accordingly,

HAVE ADOPTED THIS DECISION:

Article 1

Decision 2000/819/EC is hereby amended as follows:

1. Article 5(1) shall be replaced by the following:

‘1.
The Commission shall submit to the European Parlia-
ment and to the Council an annual report on the implemen-
tation of the financial instruments of this programme for
2004 as well as a similar end report for 2005 (the final
year).’;

2. Annex I shall be amended as follows:

(a) in the first indent of point 4(a)(i), the first sentence shall

be replaced by the following:

‘— by investing in relevant specialised venture capital
funds, particularly in seed funds, smaller funds,
funds operating regionally or
funds focused on
specific sectors or technologies, or venture capital
funds financing R&D, e.g. funds linked to research
centres and science parks which in turn provide risk
capital for SMEs.’;

(1) OJ C 25 E, 29.1.2004, p. 384.

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(b) in point 4(a)(i)

the following subparagraph shall be

(d) in the first indent of point 5, the word ‘fifth’ shall be

added:

‘The start-up phase is normally defined as up to five
years. However, for companies in specific high tech-
nology sectors,
in particular life sciences, the start-up
phase can be up to 10 years, due to the extended
pre-commercialisation product development and testing
phases that are characteristic of these particular sectors.’;

(c) in point 4(a)(iv), the following subparagraphs shall be

added:

‘The Joint European Venture programme shall be phased
out.

The financial
intermediaries may present applications
for financial contributions from SMEs to the Commis-
sion until 29 December 2004.

Applications and projects shall be dealt with according
to Article 4 and Annex II of Council Decision
98/347/EC of 19 May 1998 on measures of financial
assistance for innovative and job-creating small and
medium-sized enterprises (SMEs) — the growth and
employment initiative (*).

(*) OJ L 155, 29.5.1998, p. 43.’

deleted;

3.

in Annex II, point IV shall be deleted.

Article 2

This Decision shall enter into force on the twentieth day
following its publication in the Official Journal of the European
Union.

Article 3

This Decision is addressed to the Member States.

Done at Strasbourg, 21 July 2004.

For the European Parliament

For the Council

The President

J. P. BORREL

The President

A. NICOLAÏ