Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing a Programme for the Competitiveness of Enterprises and small and medium-sized enterprises (2014 - 2020)
Date: 2011-11-30
Institutions: European Commission
Subjects: EU programme, administrative formalities, clean technology, competitiveness, corporate finance, innovation, market access, research and development, small and medium-sized enterprises, tourism

EUROPEAN COMMISSION 

Brussels, 30.11.2011 
COM(2011) 834 final 

2011/0394 (COD) 

Research, Innovation and Competitiveness Package 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing a Programme for the Competitiveness of Enterprises and small and 
medium-sized enterprises (2014 - 2020) 

(Text with EEA relevance) 

{SEC(2011) 1452 final} 
{SEC(2011) 1453 final} 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Grounds for the proposal 

Enterprises, particularly Small and Medium-sized Enterprises (SMEs), are an important contributor 
to  growth  and  employment  in  the  Union.  If  the  Union  is  to  deliver  its  Europe  2020  priorities  of 
smart, sustainable and inclusive growth, competitiveness needs to be centre stage. 

While regulatory means are at the Union's disposal, including smart legislation and cutting red tape 
for Union enterprises, some market failures can be addressed effectively via public funding at EU 
level. 

This  is  already  happening.  The  Competitiveness  and  Innovation  Framework  Programme  (CIP) 
provides funding for relevant action. The need to continue and develop such financial support was 
recognised in the Commission Communication “A budget for Europe 2020”1. Now the Commission 
has  proposed  a  "Programme  for  the  Competitiveness  of  Enterprises  and  SMEs"  (COSME)  with  a 
total allocation of € 2.5 billion for the period 2014-2020. 

General context 

Union  enterprises  face  the  challenge  of  being  competitive  on  a  global  scale.  However,  they  are 
hindered  by  market  failures  that  undermine  their  capacity  to  compete  with  counterparts  in  other 
parts of the world. As a result, EU SMEs show  lower  labour  and  resource  productivity  and  grow 
more slowly than their counterparts in the United States, for example, and they are less able to adapt 
successfully  to  changing  framework  conditions  than  larger  enterprises  in  Europe.  The  difficulties 
SMEs face have been aggravated by the recent economic and financial crisis and commodity and 
resource price increases. 

While actions to tackle these market failures are primarily the responsibility of the Member States 
and regions, in some areas there is the clear potential for EU added value. For instance, the Union 
can  assist  by  strengthening  the  Single  Market,  supporting  coherence  and  consistency  in  national 
measures,  achieving  catalytic  effects  of  best  practice  dissemination,  or  achieving  economies  of 
scale.  Beyond  guaranteeing  the  smooth  functioning  of  the  Single  Market,  the  EU  has  a  role  in 
improving the business environment to ensure strong, diversified EU enterprises, and SMEs capable 
of competing on a global scale, while adapting to a low-carbon, resource-efficient economy. 

This  Programme  is  being  proposed  as  a  means  of  addressing  key  market  failures  that  limit  the 
growth  of  enterprises,  particularly  SMEs,  in  the  Union.  As  regards  competitiveness  and 
entrepreneurship, the main challenges that Union enterprises continue to face are: 

– 

– 

difficulties  in  accessing  finance  for  SMEs  which  struggle  to  demonstrate  their  credit-
worthiness and find it hard to gain access to risk capital; 

weak  entrepreneurial  spirit  --  only  45%  of  European  citizens  would  like  to  be  self-
employed compared to 55% e.g. in the United States; 

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COM(2011) 500 final. 

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– 

– 

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a  business  environment  not  conducive  to  start-ups  and  growth,  characterised  by 
persistent regulatory fragmentation and too much red tape; 

limited capacity of SMEs to adapt to a low-carbon, climate-resilient, energy and resource-
efficient economy due to limited financial means and limited expertise; 

limited  capacity  of  SMEs  to  expand  to  markets  beyond  their  home  country,  both within 
the Single Market and beyond.  

These  difficulties  mean  that  not  enough  enterprises  are  created,  and  those  that  are  launched  are 
often  not  viable,  or  perform  poorly  in  terms  of  productivity  and  viability  of  newly  created 
enterprises. On a macro level, we are witnessing an erosion of the EU economy's competitive edge. 

In  line  with  the  Europe  2020  strategy,  the  Programme  is  designed  to  create  the  conditions  for 
European  enterprises  to  flourish  and  to  ensure  that  SMEs  are  able  to  take  full  advantage  of  the 
Single Market's enormous potential, as well as encouraging them to look beyond it. There needs to 
be a special effort to promote the development of SMEs, a major source of economic growth and 
job creation in the Union, accounting for more than 67 % of private sector jobs and providing more 
than 58 % of total turnover in the EU.  

Particular attention will be given to improve the competitiveness of enterprises in the tourism sector 
to  implement  the  new  competencies  of  the  Union  provided  for  in  the  Lisbon  Treaty,  the  reason 
being  the  significant  contribution  of  this  sector  to  the  Union’s  GDP  and  the  high  proportion  of 
SMEs active in this sector. 

Objectives of the proposal 

The Programme aims to achieve the following general objectives: 

• 

• 

strengthen  the  competitiveness  and  sustainability  of  the  Union’s  enterprises,  including  in 
the tourism sector; 

encourage an entrepreneurial culture and promote the creation and growth of SMEs. 

Activities funded through the Programme will aim to: 

• 

Improve the framework conditions to make for the competitiveness and sustainability 
of  Union  enterprises  including  in  the  tourism  sector  by  supporting  coherence  and 
consistency  in  implementation  as  well  as  informed  policy-making  at  Union  level.  The 
economic  and  regulatory  environment  can  be  improved  through  benchmarking,  the 
exchange of best practices and sectoral initiatives. SME policy will be developed and SME 
competitiveness promoted in line with the goals of the Small Business Act (SBA) and the 
Europe 2020 strategy. Union actions will include reinforcing the use of the “Think Small 
First”  principle  in  Union  and  Member  State  policy-making,  identifying  and  exchanging 
best practices to contribute to implementing the SBA, and supporting SMEs in making the 
most  of  the  Single  Market's  potential.  Business  sectors,  including  manufacturing  and 
services,  and  selected  sectors  in  which  there  are  a  high  proportion  of  SMEs  will  be 
strengthened. 

• 

Promoting  entrepreneurship,  including  among  specific  target  groups:  Activities  will 
include  simplifying  administrative  procedures,  developing  entrepreneurial  skills  and 

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attitudes,  especially among new entrepreneurs, young people and women, and promoting 
second chances for entrepreneurs.  

Improving  access  to  finance  for  SMEs  in  the  form  of  equity  and  debt:  Financial 
instruments for growth, including new equity and debt platforms to provide equity facility 
and  loan  guarantees,  will  enable  SMEs  to  access  funding  more  easily.  First,  an  equity 
facility  for  growth-phase  investment  will  provide  SMEs  with  commercially-oriented 
reimbursable  equity  financing  primarily  in  the  form  of  venture  capital  through  financial 
intermediaries. Second, a loan facility will provide SMEs with direct or other risk-sharing 
arrangements with financial intermediaries to cover loans.  

Improving access to markets inside the Union and globally: Growth-oriented business 
support services will be provided via the Enterprise Europe Network to facilitate expansion 
in the Single Market and beyond. This Programme will also provide SME business support 
in  markets  outside  the  Union.  There  will  also  be  support  for  international  industrial 
cooperation,  particularly  to  reduce  differences  in  regulatory  and  business  environments 
between the EU and its main trading partners. 

EU added value 

The additional value for action at the Union level relies on the following five main sources: 

• 

• 

strengthening  the  Single  Market,  by  overcoming  market  fragmentation  in  areas  such  as 
venture  capital  investment,  cross-border  lending  and  credit  enhancement  as  well  as 
informational  and  organizational  constraints  which  prevent  SMEs  from  taking  advantage 
of  the  opportunities  that  the  Single  Market  offers.  For  instance,  the  main  purpose  of  the 
financial  instruments  will  be  to  improve  access  to  finance  to  SMEs  in  a  market  segment 
which is not covered by Member States’ measures, which are restricted to investments and 
support within each country. The focus will be on financing expansion of growth-oriented 
enterprises  that  are  aiming  at  international  expansion,  cross-border  activities  and  to 
develop a cross-border SME finance market. Only a programme at Union level can fulfil 
this role.  

demonstration and catalytic effects through the dissemination of industrial and policy best 
practices. Under the current programme, the best examples in promoting entrepreneurship 
and SMEs at national, regional and local level can be selected for the European Enterprise 
Awards  competition.  The  Awards  are  aimed  at  rewarding  the  best  measures  taken  by 
public  authorities  for  example  in  the  fields  of  simplification  and  reduction  of 
administrative  burden.  Every  year  around  400  projects  have  competed  in  the  national 
competitions and around 56 are selected by their countries to participate in the European 
Competition where the European jury selects six winners. From the 250 national nominees, 
more  than  30  have  won  an  award  and  been  showcased  across  Europe  as  a  best  practice. 
Transferring  skills  and  knowledge  across  frontiers  contributes  to  align  Member  States' 
policies,  create  new  partnerships  and  reduce  the  gap  between  European  economies. 
European national and local administrations have the possibility to present their successful 
initiatives at the SBA Conference, organised every year by the Commission and the Union 
Presidency. The Conference has become the key event for promoting the exchange of good 
practices in the Union and beyond. For example, the latest SBA Conference in Budapest 
attracted  340  participants  from  EU  Member  States  and  from  30  non-Member  States.  28 
good practices were presented in the work-shops. As regards financial instruments, the role 
of  the  EIF  facilitates  constant  exchange  of  best  practices  in  the  areas  of  both  guarantees 

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and venture capital, while the catalytic effect is acknowledged to be particularly high for 
venture capital. 

economies  of  scale  in  areas  where  it  would  be  difficult  for  individual  Member  States  to 
achieve  the  required  critical  mass.  For  instance,  in  the  field  of  support  to  SMEs  abroad, 
European  added  value  is  created  by  the  bundling  of  national  efforts  and,  by  establishing 
services  that  would  lack  critical  mass  if  provided  at  national  level  (for  example,  through 
support  to  IPR  enforcement).  The  China  IPR  SMEs  Helpdesk,  funded  by  the  current 
programme,  offers  advice  which  would  be  otherwise  unavailable  to  SMEs  from  smaller 
Member  States.2  Otherwise,  Union  intervention  can  contribute  to  avoid  duplication  of 
effort,  promote  cooperation  between  Member  States  and  coordination  with  relevant  non-
Member States. In the case of tourism, there is clear added value in taking initiative at the 
Union-level especially in the following areas: the consolidation of the knowledge base by 
the  means  of  pan-European  surveys  and  studies  to  better  understand  the  demand  and  the 
supply side, without which data comparability and consistency across the Union would not 
be  achieved3;  the  development  of  joint  transnational  promotion  strategies  of  Europe  as 
home  to  high  quality  and  sustainable  tourist  destinations4;  the  identification  of  best 
practices that can benefit specific sectors, such as maritime and coastal tourism; as well as 
the extension of the tourism season, which could be done better with exchanges between 
different Member States than by each country individually. 

coherence and consistency in national measures through the exchange of best practices at 
European  level  and  benchmarking.  One  of  the  best  examples  for  the  success  of 
benchmarking  exercises  financed  under  the  current  programme  is  the  action  for 
simplification  of  start-up  procedures.  Since  2008,  the  situation  and  progress  country-by-
country  and  year-by-year  has  been  monitored  taking  into  account  three  aspects  of 
simplification  (in  respect  of  which  a  benchmarking  exercise  was  mandated  by  the 
Competitiveness Council): average time, administrative costs and procedures to start-up a 
limited  company.  The  action  consisted  of  semi-annual  expert  meetings  ("the  network  of 
National  Start-up  Co-ordinators")  nominated  by  Member  States.  Its  purpose  was  to 
develop  a  measurement  methodology,  track  progress  and  support  this  progress  with  the 
exchange  of  good  practices  and  information.  Since  2002  registration  times  have  dropped 
by 70% and costs have more than halved. Following  the  success  of  this  measure,  targets 
have been reviewed by the February 2011 Review of the Small Business Act (SBA). 

• 

the unique expertise acquired by EU institutions:  

– 

This is the case of the EU financial institutions, the European Investment Bank (EIB) 
and  the  European  Investment  Fund  (EIF),  whose  experience  in  designing  and 
implementing  SME-friendly  financing  schemes  is  unparalleled.  The  experience 
gained by the EIF over more than 10 years constitutes a uniquely valuable asset. It 
has acted since 2007 as an investor in 19 CIP-supported venture capital funds, often 

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Over 50,000 different users of the IPR web portal and e-learning services over the first 3 years, with over 2 
million hits; more than 30 training seminars and interactive workshops run every year, of which 2/3 performed 
in Europe, to gather SMEs' concerns. 
Studies/surveys carried out by individual smaller Member States would have less European added-value and 
fail  to  cover  the  EU  wide  scope  and  might  generate  a  duplication  of  research  already  carried  out  in  other 
countries. 
This type of measures implies a higher added-value and impact if done with a coordinated/complementation 
approach  between  the  Member  States;  moreover  smaller  Member  States  tend  to  have  fewer  resources  for 
promotion of their destinations and especially for the promotion of transnational tourism products. 

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in  a  cornerstone  role,  leveraging  over  €1.4  billion  of  total  investment  in  growth-
oriented SMEs. As regards historical performance, under the first generation of EU 
venture capital (the ETF Start-up Facility under the Growth & Employment Initiative 
from  1998-2000)  over  98%  of  the  money  invested  has  already  been,  or  should 
ultimately  be,  paid  back  from  beneficiaries,  including  Skype  (voice-over  IP 
telephony), Vertaris (paper recycling) and Solaire Direct (Photovoltaic structures). 

– 

The Enterprise Europe Network has achieved tangible results by putting emphasis on 
promoting  the  internationalisation  of  SMEs  (in  the  Internal  Market  and  beyond) 
through providing information on Union matters as well as the possibility to feed into 
the  decision  making  process.  Its  role  is  especially  important  in  overcoming 
information asymmetries faced by SMEs and alleviating transaction costs associated 
with  cross-border  activities.  The  value  of  the  Enterprise  Europe  Network  is 
constituted  by  the  shared  methodologies,  instruments  and  tools  used,  qualified 
service providers mandated and (co-) financed by their regional / national authorities. 

Coherence with other policies and programmes  

It  is  essential  that  the  specific  interests  and  circumstances  of  SMEs  are  taken  into  account  in  the 
design  of  all  Union  policies  and  funding  programmes.  The  future  financial  framework  will  be 
designed to facilitate the participation of small enterprises in funding programmes, by simplifying 
rules, reducing the costs of participation, accelerating award procedures and providing a “one-stop 
shop” to make life easier for beneficiaries of Union funding.  

Due  to  its  importance  for  the  achievement  of  the  Europe  2020  goals,  the  improvement  of  the 
business environment for SMEs is mentioned in six out of seven Europe 2020 flagship initiatives: 
An  Industrial  policy  for  the  Globalisation  Era,  Innovation  Union,  Youth  on  the  Move,  A  Digital 
Agenda for Europe, Resource Efficient Europe, An Agenda for new Skills and Jobs. Of particular 
relevance  for  the  new  Programme  is  the  flagship  initiative  “An  industrial  policy  for  the 
globalization era” which outlined a new strategic approach, addressing European competitiveness as 
well  as  the  creation  and  growth  of  small  and  medium-sized  enterprises  and  the  promotion  of  an 
entrepreneurial culture.  

The proposed new Programme will also provide a tool which can serve other policy objectives. The 
Enterprise Europe Network will provide a vehicle for links with other programmes and initiatives, 
in terms of “top-down” diffusion of information, promoting them, as well as “bottom-up” collection 
of feedback from stakeholders. It will continue to provide information, advice and support to SMEs 
on  environmental  programmes  and  compliance.  Synergies  with  other  programmes  will  be 
maximised.  For  example,  the  guarantee  activities  proposed  in  the  new  Programme  will  operate 
alongside  guarantee  activities  funded  under  the  Union  Structural  Funds  and  the  Progress 
Microfinance Facility. The Venture Capital instruments will complement the ones provided under 
Horizon 2020 - the new Framework Programme for Research and Innovation. The Programme will 
also avoid overlaps with other programmes, in particular in the areas of entrepreneurship promotion 
and skills. Careful consideration will also be given to the complementarity of the new Programme 
with the proposed Partnership Instrument. It will be essential that the external action of the Union 
be complementary to the external dimension of the internal agenda of securing sustainable growth 
and jobs in Europe.  

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Management of the Programme 

As announced in the Commission Communication "A budget for Europe 2020"5, management will 
be largely outsourced.  

– 

– 

The  financial  instruments  will  be  operated  by  the  European  Investment  Bank  Group  on 
behalf of the Commission; 

Other  actions  may  be  managed  by  an  executive  agency,  building  on  the  positive 
experience6 with the Executive Agency for Competitiveness and Innovation (EACI) in the 
current multi-annual financial framework. A cost-benefit analysis will be carried out. 

Outsourcing for the CIP has proved especially successful with regard to simplification, as the EACI, 
as a result of its specialisation, has streamlined and developed procedures adapted to SMEs.  

SME-related  parts  of  other  future  spending  programmes  might  also  be  externalised  to  the  EACI. 
They may include parts of Horizon 2020, making that agency a “one-stop-shop” for SMEs willing 
to  access  Union  funding  programmes.  The  use  of  one  executive  agency  would  also  lead  to  a 
streamlined  use  of  IT  tools  and  electronic  portals,  thus  further  contributing  to  easier  access  for 
SMEs. 

Simplification 

A priority for the Commission in this Programme, as in other programmes within the context of the 
Multiannual  Financial  Framework  (MFF),  is  to  simplify  the  regulatory  environment  and  facilitate 
access to funds for EU enterprises, particularly SMEs, as far as possible. This approach is applied in 
the  Competitiveness  and  SME  Programme  (COSME)  by  basing  it  solely  on  the  rules  of  the 
Financial Regulation, without any derogation. This provides for simple, coherent and standardised 
administrative procedures for enterprises to access funds.  

The revision of the Financial Regulation will help to make it easier for small enterprises to take part 
in  funding  programmes,  for  example  by  simplifying  rules,  reducing  the  costs  of  participation, 
accelerating award procedures and providing a "one-stop shop"" to make access to Union funding 
easier. A new system of lump sums is proposed.  

These features meet the needs stakeholders expressed in the public consultation on the future of the 
Competitiveness and Innovation Framework Programme (CIP): 

• 

• 

• 

• 

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simplify administrative procedures and the procedures of the Enterprise Europe Network, 
through simplifying the preparation of proposals 

make more use of lump sums, flat rates 

drop the requirement to name staff employed on a project 

simplify administrative documents to be submitted for contracts 

COM(2011)  500  final,  SEC(2011)  867  -  868  final.  Communication  from  the  Commission  to  the  European 
Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A 
Budget for Europe 2020 - Part II: Policy fiches. 
Final  Report:  Evaluation  of  the  Executive  Agency  for  Competitiveness  and  Innovation;  12  May  2011. 
http://ec.europa.eu/cip/files/docs/evaluation-of-eaci-may-2011_en.pdf 

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• 

drop the need for private beneficiaries to provide bank guarantees.  

The Programme will  respond  to  these suggestions by making maximum use of the new Financial 
Regulation, and will make a point of further simplifying reporting requirements, that will include 
more extensive use of online reporting. Furthermore, to allow for an improved access to funding for 
SMEs,  the  rules  for  participation  and  eligibility  of  all  future  Union  funding  programmes  will  be 
aligned to the greatest extent possible. 

Financial instruments as such are simple to use for enterprises as they address their bank or venture 
capital fund with an ordinary financing request and not with a project proposal as for grant finance. 
As regards the financial instruments to be implemented by the European Investment Fund (EIF) or 
other appropriate financial institutions, the Commission proposal for the equity and debt platforms 
and  the  revised  Financial  Regulation  will  govern  the  financial  instruments’  administrative 
requirements.  The  rules  will  be  simplified  to  the  greatest  extent  possible,  to  strike  a  balance 
between  reporting  obligations  on  intermediaries  and  beneficiaries  on  the  one  hand,  and  sound 
financial management, including audit requirements, on the other.  

In addition, the simplified procedures developed by the EACI will be taken over by the Commission 
for similar types of projects. Best practices will be shared as regards, for example, simplifications 
the Agency introduced in grant agreements, contracts and procedures. Further simplification might 
include  more  flexible  implementation  modalities  for  grant  agreements  to  avoid  the  need  for 
amendments at a later stage. 

RESULTS  OF  CONSULTATIONS  WITH  THE  INTERESTED  PARTIES  AND  IMPACT 

ASSESSMENTS 

Consultation with interested parties 

The CIP will come to an end on 31 December 2013. In the context of the impact assessment process 
for  a  successor  programme,  the  Commission  organised  a  public  consultation,  addressing  a  wide 
audience, including public and private organisations and individuals, consisting of four steps:  

– 

– 

– 

– 

an  online  survey  (including  a  specific  survey  on  financial  instruments7),  that  ran  from  8 
November 2010 to 11 February 2011; 

a public conference on 25 January 2011;  

meetings  with  representatives  of  Member  States  in  the  Entrepreneurship  and  Innovation 
Programme (EIP) Committee and in the Joint Meeting of the CIP Committees;  

a meeting of the CIP Strategic Advisory Board on 2 February 2011. 

The  consultation  confirmed  that  many  parts  of  the  current  programme  are  working  well,  and  that 
there is wide support for maintaining a Union programme to support SMEs and create a favourable 
business  environment.  Issues  concerning  access  to  finance  for  SMEs  were  also  discussed  at 
meetings of the SME Finance Forum held in September 2010 and March 2011. 

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http://ec.europa.eu/cip/files/docs/public-consultation-annex2-to-final-report_en.pdf  

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Evaluation of the current programme 

Under the current CIP, evaluations are carried out both at the level of specific programmes and at 
the level of the framework programme. Most actions of the proposed Programme are a continuation 
of actions under the Entrepreneurship and Innovation Programme under the CIP. 

The main findings of the EIP evaluations are summarised below. 

Interim evaluation 

The EIP interim evaluation8 assessed the initial outcomes of the EIP, with a focus on the setting up 
of the Enterprise Europe Network and the impacts of the financial instruments funded under the EIP 
and its predecessor programme. The evaluation confirmed that the objectives of EIP had efficiently 
addressed  the  most  important  barriers  and  constraints  facing  European  SMEs,  such  as  regulatory 
and  administrative  burdens  and  limited  access  to  finance.  The  financial  instruments  supported  by 
EIP  are  needed  because  of  market  failure,  addressing  the  financing  constraints  that  start-up  and 
growing  SMEs  face  across  the  Union.  EIP  financial  instruments  were  seen  as  an  innovative 
approach to addressing market failures in SME financing. 

Recommendations for further improvements included: 

• 

• 

• 

developing  a  standard  set  of  monitoring  indicators  to  record  and  report  programme 
progress; 

improving the Enterprise Europe Network's feedback function; 

simplifying the structure of the EIP to improve links between individual actions and 
global EIP objectives. 

Final evaluation 

The  EIP  final  evaluation9  assessed  the  relevance,  efficiency,  effectiveness,  information  and 
awareness,  utility  and  sustainability  of  the  programme,  with  a  specific  focus  on  its  main 
components:  financial  instruments,  Enterprise  Europe  Network,  and  innovation.  The  evaluation 
entailed extensive consultation of stakeholders and beneficiaries through surveys and interviews.  

The  findings  of  the  evaluation  have  been  encouraging.  The  EIP  was  seen  as  being  on  track  to 
achieve the anticipated impacts, addressing the needs, problems and issues it was designed for and 
doing so in a particularly efficient way at European level.  

Its  objectives  were  seen  as  highly  relevant  to  enterprise  needs  and  in  line  with  the  Europe  2020 
goals.  The  programme  was  evaluated  as  benefiting  end-users,  in  particular  SMEs,  in  an  effective 
way.  The  EIP  measures,  particularly  the  financial  instruments,  were  found  to  have  effectively 
created conditions for real replication in the market. 

The following recommendations were made on how to further improve the implementation of the 
EIP:  

8 
9 

http://ec.europa.eu/enterprise/dg/files/evaluation/final_report_eip_interim_evaluation_04_2009_en.pdf  
http://ec.europa.eu/cip/files/docs/eip-final-evaluation-report_en.pdf  

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develop a systematic management process for pursuing cross-cutting objectives within the 
programme and linking the high-level objectives to single financed actions and measures, 

make links with other elements of Enterprise policy more explicit, eg with references to the 
priorities of the Small Business Act or relevant Europe 2020 Flagship Initiatives. 

develop  the  monitoring  system  and  indicators,  which,  while  a  valuable  contribution  in 
assessing the performance of the programme, still need fine-tuning.  

There  is  already  more  focus  on  performance  measurement  and  on  performance  indicators  in  the 
current programme and this will have a prominent place in the new Programme. The latter will take 
into account the above recommendations, in particular by strengthening the intervention logic of the 
Programme, linking it more closely to the strategic priorities of the Union.  

Impact assessment 

An  impact  assessment  covering  the  instruments  of  the  Programme  was  carried  out  and  it 
accompanies this Commission proposal. The impact assessment considered four options: 

– 

– 

– 

– 

Option  1,  Business-as-Usual,  would  cover  the  same  competitiveness-  and  SME-related 
elements as the EIP is expected to cover in 2013. 

Option 2 would discontinue all current financial interventions. 

Option  3b  would  maintain  the  current  scope  of  intervention  with  a  balanced  budgetary 
expansion. 

Option 3c would mean a focused budgetary expansion, with financial support restricted to 
the financial instruments and the Enterprise Europe Network. 

The impact assessment has concluded that modest budgetary expansion is the preferred option, as 
it  would  provide  a  balanced  approach  in  terms  of  supporting  efficiency  gains,  critical  mass, 
coherence and effectiveness, and tackling market and regulatory failures. 

Following the opinion of the Impact Assessment Board, the report was improved as follows: 

– 

– 

– 

evaluation findings and stakeholders' views were better detailed in the text; 

social impacts were assessed to a greater extent; 

policy  coherence  and  coherence  with  other  EU  programmes  was  further  assessed  and 
explained in the report. 

LEGAL ELEMENTS OF THE PROPOSAL 

Legal basis 

The  proposal  is  based  on  Article  173  and  Article  195  of  the  Treaty  on  the  Functioning  of  the 
European Union. 

It contains the following provisions: 

EN 

10 

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– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

– 

Article 1 establishes the Programme; 

Article 2 defines the overall objectives and Article 3 the specific objectives; 

Article 4 describes the Programme's budget; 

Article 5 concerns the participation of third countries; 

Articles 6, 7, 8 and 9 describe the Programme's fields of actions; 

Article 10 defines the annual work Programme for implementation; 

Article 11 defines the scope for support measures to be undertaken by the Commission; 

Article 12 describes provisions for monitoring and evaluation; 

Article 13 describes the forms of financial assistance; 

Article 14 provides information about the implementation of the financial instruments; 

Article 15 describes provisions for the protection of the Union's financial interests; 

Article 16 sets out provisions on the committee; 

Articles  17,  18  and  19  describe  delegating  acts,  the  exercise  of  the  delegation  and 
provisions for the urgency procedure; 

Article 20 sets the date for the entry into force of this Regulation. 

Subsidiarity and proportionality principles 

The proposed EU intervention is in line with the Lisbon Treaty, as it will specifically target policy 
failures  such  as  the  lack  of  coordination  and  effective  networking  and  market  failures  such  as 
information  asymmetries  which  can  only  be  tackled  at  EU  level.  Setting  out  a  coordinated  and 
consolidated  policy  is  seen  as  being  very  valuable  in  bringing  key  stakeholders  together,  sharing 
knowledge, ideas  and concerns, and in helping to raise awareness  within and across  governments 
and in the wider community. 

None  of  the  measures  considered  under  the  future  Programme  calls  for  EU-level  measures  to 
replace national initiatives, or binding decisions at EU level. EU intervention is designed to make 
national measures work better, by giving an EU dimension to them, by better coordination and the 
removal  of  cross-border  obstacles  to  cooperation  either  by  private  actors  or  public  authorities. 
Cooperation of national and regional actors and structures is encouraged by means of “horizontal” 
networking rather than “vertical” centralisation.  

EU  action  has  to  be  proportional,  in  other  words,  efforts  and  means  deployed  have  to  be  fully 
justified by the goals. In this respect, given the challenges the EU economy faces, the size and scale 
of  EU  action  is  expected  to  generate  positive  impacts  across  Europe  through  crowding-in  and 
multiplier  effects.  Because  of  budgetary  constraints,  the  proposed  EU-level  measures  have  been 
carefully selected to demonstrate EU added value.  

EN 

11 

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Based  on  the  above  analysis,  it  can  be  concluded  that  the  proposed  EU-level  intervention  to 
promote  entrepreneurship  and  competitiveness  is  fully  justified,  especially  taking  into  account 
SMEs' needs.  

BUDGETARY IMPLICATIONS 

The financial appropriations for implementing the Programme for the period from 1 January 2014 
to 31 December 2020 shall amount to EUR 2.522 billion.10 

2011/0394 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

establishing a Programme for the Competitiveness of Enterprises and small and medium-
sized enterprises (2014 - 2020) 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 
173 and 195 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

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

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

Acting in accordance with the ordinary legislative procedure,  

Whereas: 

(1) 

The  Commission  adopted  the  Communication  “Europe  2020  -  A  strategy  for  smart, 
sustainable and inclusive growth”11 in March 2010 (hereinafter "the Europe 2020 Strategy"). 
The Communication was endorsed by the European Council of June 2010. The Europe 2020 
Strategy  responds  to  the  economic  crisis  and  is  intended  to  prepare  Europe  for  the  next 

10 

11 

The  budget  of  the  Programme  has  been  decreased  compared  to  the  amount  published  in  the  Commission 
Communication “A  budget  for  Europe  2020”  (COM(2011)500)  due  to  the  fact  that  actions  to  support 
standardisation  will  be  financed  up  to  an  amount  of  EUR  182  million  outside  the  Programme  in  order  to 
maintain their successful structure and efficient implementation. 
COM (2010) 2020 final. 

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12 

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(2) 

(3) 

(4) 

decade.  It  sets  five  ambitious  objectives  on  climate  and  energy,  employment,  innovation, 
education and social inclusion to be reached by 2020 and identifies key drivers for growth, 
which  aim  at  making  Europe  more  dynamic  and  competitive.  It  also  emphasises  the 
importance of reinforcing the growth of the European economy while delivering high levels 
of employment, a low carbon, resource and energy-efficient economy and social cohesion. 

In  order  to  ensure  that  enterprises  play  a  central  role  in  delivering  economic  growth  in 
Europe, the Commission adopted a Communication, entitled "An Integrated industrial policy 
for  the  globalization  era,  putting  competitiveness  and  sustainability  at  centre  stage"12  in 
October  2010,  which  was  endorsed  by  the  European  Council  on  its  Conclusions  of 
December  2010.  This  is  a  flagship  initiative  of  the  Europe  2020  Strategy.  The 
Communication sets out a  strategy that aims to boost  growth and jobs by maintaining and 
supporting a strong, diversified  and competitive industrial base in Europe, notably through 
improving  framework  conditions  for  enterprises,  as  well  as  through  strengthening  several 
aspects of the Single Market, including business-related services.  

In  June  2008  the  Commission  adopted  the  Communication  “Think  Small  First  -  A  “Small 
Business  Act  for  Europe”13,  which  was  endorsed  by  the  European  Council  of  December 
2008. The Small Business Act (SBA) provides a comprehensive policy framework for small 
and  medium-sized  enterprises  (SMEs),  promotes  entrepreneurship  and  anchors  the  “Think 
Small First” principle in law and policy in order to strengthen the competitiveness of SMEs. 
The  SBA  establishes  10  principles  and  outlines  policy  and  legislative  actions  to  promote 
SMEs’  potential  to  grow  and  create  jobs.  Implementation  of  the  SBA  contributes  to 
achieving  the  objectives  of  the  Europe  2020  Strategy.  Several  actions  for  SMEs  have 
already been set out in the flagship initiatives. 

The Commission Communication entitled “Review of the Small Business Act for Europe”14 
of February 2011, which was endorsed by the Competitiveness Council of May 2011, takes 
stock  of  the  implementation  of  the  SBA  and  assesses  the  needs  of  SMEs  operating  in  the 
present economic environment, in which they find it increasingly difficult to get financing 
and  access  to  markets.  That  review  presents  an  overview  of  the  progress  made  in  the  first 
two  years  of  the  SBA,  sets  out  new  actions  to  respond  to  challenges  resulting  from  the 
economic crisis that stakeholders have reported, and proposes ways to improve the uptake 
and  implementation  of  the  SBA  with  a  clear  role  for  stakeholders,  and  business 
organisations on the front-line. 

(5)  With  the  proposal  for  a  Council  Regulation  laying  down  the  multiannual  financial 
framework for the years 2014-202015 , adopted on 29 June 2011, the Commission lays down 
a  package  of  legislative  proposals  and  documents  for  the  2014-2020  Union  budget.  That 
multiannual  financial  framework  describes  how  the  policy  goals  of  increasing  growth  and 
creating  more  jobs  in  Europe  and  establishing  a  low-carbon  and  more  environment-
conscious economy and internationally prominent Europe will be achieved. 

(6) 

In  order  to  contribute  to  the  reinforcement  of  competitiveness  and  sustainability  of  Union 
enterprises,  in  particular  SMEs,  the  advancement  of  the  knowledge  society,  and 

12 
13 
14 
15 

COM (2010) 614 final. 
COM(2008) 394 final. 
COM(2011) 78 final. 
COM(2011) 398 final. 

EN 

13 

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(7) 

(8) 

development based on balanced economic growth, a Programme for the Competitiveness of 
Enterprises and SMEs (hereinafter "the Programme") should be established. 

The  Commission  has  committed  to  mainstream  climate  action  into  Union  spending 
programmes and to direct at least 20% of the Union budget to climate-related objectives. It 
is  important  to  ensure  that  climate  change  mitigation  and  adaptation  as  well  as  risk 
prevention  is  promoted  in  the  preparation,  design  and  implementation  of  the  Programme. 
Measures covered by this Regulation should contribute to promoting the transition to a low-
carbon and climate-resilient economy and society. 

The competitiveness policy of the Union is intended to put into place the institutional and 
policy arrangements that create conditions under which enterprises can grow in a sustainable 
way. Improved productivity is the dominant source of sustainable income growth, which in 
turn  contributes  to  improvements  in  living  standards.  Competitiveness  also  depends  on 
companies’  ability  to  take  full  advantage  of  opportunities  such  as  the  European  Single 
Market. This is especially important for SMEs, which account for 99% of the enterprises in 
the Union, provide two out of three existing jobs in the private sector, and 80 % of newly-
created  jobs,  and  contribute  with  more  than  half  of  the  total  value-added  created  by 
enterprises  in  the  Union.  SMEs  are  a  key  driver  for  economic  growth,  employment  and 
social integration. 

(9) 

Competitiveness  has  been  put  under  the  spotlight  of  Union  policy-making  in  recent  years 
because  of  the  market,  policy  and  institutional  failures  that  are  undermining  the 
competitiveness of Union enterprises, particularly SMEs. 

(10)  The  Programme  should  therefore  address  market  failures  affecting  the  competitiveness  of 
the Union economy on a global scale due principally to issues which undermine the capacity 
of enterprises to compete with their counterparts in other parts of the world.  

(11)  The  Programme  should  particularly  address  SMEs,  as  defined 

in  Commission 
Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and 
medium-sized  enterprises.16  Particular  attention  should  be  paid  to  micro  enterprises, 
enterprises engaged in craft activities and social enterprises. Attention should also be paid to 
the  specific  characteristics  and  requirements  of  young  entrepreneurs,  new  and  potential 
entrepreneurs and female entrepreneurs, as well as specific target groups, such as migrants 
and entrepreneurs belonging to socially disadvantaged or vulnerable groups such as persons 
with  disabilities.  The  Programme  should  also  encourage  senior  citizens  to  become  and 
remain entrepreneurs and promote second chances for entrepreneurs.  

(12)  Many of the Union's competitiveness problems involve SMEs' difficulties in getting access 
to finance because they struggle to demonstrate their credit-worthiness and have difficulties 
in  gaining  access  to  risk  capital.  This  has  a  negative  effect  on  the  level  and  quality  of  the 
new enterprises created and on the growth of enterprises. The added value for the Union of 
the  proposed  financial  instruments  lies  inter  alia  in  strengthening  the  Single  Market  for 
venture capital and in developing a pan-European SME finance market. The Union’s actions 
should be complementary to the Member States’ use of financial instruments for SMEs. The 
entities  entrusted  with  the  implementation  of  the  actions  should  ensure  additionality  and 
avoid double financing through EU resources. 

16 

OJ L 124 20.5.2003, p. 36 

EN 

14 

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(13)  The  Enterprise  Europe  Network  has  proven  its  added  value  for  European  SMEs  as  a  one-
stop-shop for business support by helping enterprises to improve their competitiveness and 
explore  business  opportunities  in  the  Single  Market  and  beyond.  The  streamlining  of 
methodologies  and  working  methods  and  provisions  of  a  European  dimension  to  business 
support services can only be achieved at Union level. In particular, the Network has helped 
SMEs  to  find  cooperation  or  technology  transfer  partners,  get  advice  on  sources  of 
financing, and on intellectual property and on eco-innovation and sustainable production. It 
has  also  obtained  feedback  on  Union  legislation  and  standards.  Its  unique  expertise  is 
particularly  important  in  overcoming  information  asymmetries  and  alleviating  transaction 
costs associated with cross-border transactions.  

(14)  The  limited  internationalisation  of  SMEs  both  within  and  outside  Europe  affects 
competitiveness.  According  to  some  estimates  currently  25%  of  the  SMEs  in  the  Union 
export or have exported at some point over the last three years, of which only 13% export 
outside the Union on a regular basis and only 2 % have invested beyond their home country. 
In line with the Small Business Act, which called on the Union and the Member States to 
support and encourage SMEs to benefit from the growth of markets outside the Union, the 
EU supports a network of European Business Organisations in more than 20 markets abroad. 
It provides financial assistance to the EU-Japan Centre for Industrial Cooperation, business 
bodies  in  Hong  Kong,  Malaysia  and  Singapore  as  well  as  the  European  Business  and 
Technology  Centre  in  India,  EU  SME  Centres  in  China  and  in  Thailand  and  the  China 
Intellectual  Property  Rights  SME  helpdesk.  European  added  value  is  created  by  bundling 
national efforts in this domain, avoiding duplication, promoting cooperation and by offering 
services that would lack critical mass if provided at national level. 

(15)  To improve the competitiveness of European enterprises, notably SMEs, the Member States 
and  the  Commission  need  to  create  a  favourable  business  environment.  The  interests  of 
SMEs and the sectors in which they are most active need particular attention. Initiatives at 
Union  level  are  necessary  in  order  to  develop  a  level  playing  field  for  SMEs  and  to 
exchange information and knowledge on a European scale. 

(16)  Another factor which affects competitiveness is the relatively weak entrepreneurial spirit in 
the Union. Only 45% of the Union citizens (and less than 40% of women) would like to be 
self-employed  as  compared  to  55%  of  the  population  in  the  United  States  and  71%  in 
China.17  Demonstration  and  catalytic  effects,  for  example  European  Awards  and 
conferences,  as  well  as  coherence  and  consistency  enhancing  measures  such  as 
benchmarking and exchanges of best practices provide a high European added value. 

(17)  Global competition, demographic changes, resource constraints and emerging social trends 
generate  challenges  and  opportunities  for  some  sectors.  For  example,  design-based  sectors 
facing  global  challenges and  characterised  by  a high  proportion  of  SMEs  need  to  adapt  to 
reap  the  benefits  and  harness  the  untapped  potential  of  high  demand  for  personalised, 
inclusive products.  As  these challenges apply to all SMEs in the Union in these sectors, a 
concerted effort at Union level is necessary. 

(18)  As  outlined  in  the  Commission  Communication  of  30  June  2010,  entitled  "Europe,  the 
world's No 1 tourist destination – a new political framework for tourism in Europe"18, which 
was  endorsed  by  the  European  Council  Conclusions  of  October  2010,  tourism  is  an 

17 
18 

2009 Eurobarometer survey on entrepreneurship. 
COM(2010) 352 final. 

EN 

15 

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important sector of the Union economy. Enterprises in this sector substantially contribute to 
the Union's Gross Domestic Product (GDP) and job creation and have significant potential 
for the development of entrepreneurial activity, since it is run mainly by SMEs. The Lisbon 
Treaty acknowledges the importance of tourism outlining the Union specific competences in 
this  field  which  complement  the  actions  of  Member  States.  There  is  clear  added  value  for 
the tourism initiative at Union level, especially in providing data and analysis, in developing 
transnational promotion strategies and in exchanging best practices. 

(19)  The  Programme  should  indicate  actions  for  the  objectives,  the  total  financial  envelope  for 
pursuing those objectives, different types of implementing measures, and the arrangements 
for monitoring and evaluation and for protection of the Union's financial interests. 

(20)  The  Programme  should  complement  other  Union  programmes,  while  acknowledging  that 
each  instrument  should  work  according  to  its  own  specific  procedures.  Thus,  the  same 
eligible costs should not receive double funding. With the aim to achieve added value and 
substantial  impact  of  Union  funding,  close  synergies  should  be  developed  between  the 
Programme, other Union programmes and the Structural Funds. 

(21)  The principles of transparency and equal gender opportunity should be taken into account in 
all relevant initiatives and actions covered by the Programme. The respect of human Rights 
and fundamental freedom for all citizens should be also considered in those initiatives and 
activities. 

(22)  This  Regulation  should  lay  down,  for  the  entire  duration  of  the  Programme,  a  financial 
envelope  constituting  the  prime  reference,  within  the  meaning  of  point  17  of  the 
Interinstitutional Agreement of XX/YY/201Z between the European Parliament, the Council 
and  the  Commission  on  cooperation  in  budgetary  matters  and  on  budgetary  discipline  and 
sound  financial  management19,  for  the  budgetary  authority  during  the  annual  budgetary 
procedure. 

(23)  To ensure that financing be limited to tackling market, policy and Institutional failures, and 
with  a  view  to  avoiding  market  distortions,  funding  from  the  Programme  should  comply 
with the Union State aid rules. 

(24)  The Agreement on the European Economic Area and Protocols to Association Agreements 
provide for the participation of the countries concerned in Union programmes. Participation 
by other third countries should be possible when Agreements and procedures so indicate. 

(25)  The Programme should be monitored and evaluated so as to allow for adjustments. 

(26)  The  financial  interests  of  the  Union  should  be  protected  through  proportionate  measures, 
including the prevention, detection and investigation of irregularities, the recovery of funds 
lost,  wrongly  paid  or  incorrectly  used  and,  where  appropriate,  penalties,  throughout  the 
expenditure cycle 

(27)  To  ensure  uniform  conditions  for  the  implementation  of  this  Regulation,  implementing 
powers should be conferred on the Commission, to adopt an annual work programme for the 
implementation  of  the  Programme.  These  powers  should  be  exercised  in  accordance  with 
Regulation  (EU)  No  182/2011  of  the  European  Parliament  and  of  the  Council  of  16 

19 

OJ C 139, 14.6.2006, p.1 

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February  2011  laying  down  the  rules  and  general  principles  concerning  mechanisms  for 
control by the Member States of the Commission's exercise of implementing powers20. 

(28)  The power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of 
the European Union should be delegated to the Commission in respect of specific rules for 
participation  and  externalisation  of  certain  tasks.  It  is  of  particular  importance  that  the 
Commission  carry  out  appropriate  consultations  during  its  preparatory  work,  including  at 
expert level. 

(29)  The  Commission,  when  preparing  and  drawing-up  delegated  acts,  should  ensure  a 
simultaneous,  timely  and  appropriate  transmission  of  relevant  documents  to  the  European 
Parliament and to the Council. 

HAVE ADOPTED THIS REGULATION: 

CHAPTER I 
Subject matter 

Article 1 
Establishment  

A  programme  for  Union  actions  to  improve  the  competitiveness  of  enterprises,  with  special 
emphasis  on  small  and  medium-sized  enterprises  (SMEs)  (hereinafter  "the  Programme"),  is 
established for the period from 1 January 2014 to 31 December 2020.  

Article 2 
General Objectives 

1. 

The  Programme  shall  contribute  to  the  following  general  objectives,  paying  particular 
attention to the specific needs of SMEs at European and global level:  

(a) 

(b) 

strengthening  the  competitiveness  and  sustainability  of  the  Union’s  enterprises 
including in the tourism sector; 

encouraging  an  entrepreneurial  culture  and  promoting  the  creation  and  growth  of 
SMEs. 

2. 

The  achievement  of  the  objectives  referred  to  in  paragraph  1  shall  be  measured  by  the 
following indicators:  

(a)  percentage  of  growth  of  the  Union's  industrial  sector  in  relation  to  total  Gross 

Domestic Product (GDP) growth,  

(b)  Union manufacturing output growth in eco-industries, 

(c) 

changes in administrative burden on SMEs, 

20 

OJ L 55, 28.2.2011, p. 13 

EN 

17 

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(d)  SME growth in terms of added-value and number of employees, 

(e) 

and SME turnover rate. 

3. 

The  Programme  shall  support  the  implementation  of  the  Europe  2020  Strategy  and  shall 
contribute  to  achieving  the  objective  of  “smart,  sustainable  and  inclusive  growth”.  In 
particular, the Programme shall contribute to the headline target concerning employment.  

CHAPTER II 
Specific objectives and fields of action 

1. 

The specific objectives of the Programme shall be: 

Article 3 
Specific objectives 

(a)  To  improve  framework  conditions  for  the  competitiveness  and  sustainability  of 

Union enterprises including in the tourism sector; 

(b)  To promote entrepreneurship, including among specific target groups; 

(c)  To improve access to finance for SMEs in the form of equity and debt; 

(d)  To improve access to markets inside the Union and globally. 

The  need  of  enterprises  to  adapt  to  a  low-carbon,  climate-resilient,  energy  and  resource-
efficient economy shall be promoted in the implementation of the Programme. 

To measure the impact of the Programme in achieving the specific objectives referred to in 
paragraph 1, performance indicators shall be used. Those indicators are set out in Annex I. 

Article 4 
Budget 

The  financial  envelope  for  implementing  the  Programme  shall  be  EUR  2.522  billion,  of 
which approximately EUR 1.4 billion shall be allocated to financial instruments. 

The  financial  envelope  established  under  this  Regulation  may  also  cover  expenses 
pertaining  to  preparatory,  monitoring,  control,  audit  and  evaluation  activities  which  are 
required for the management of the Programme and the achievement of its objectives; in 
particular, studies, meetings of experts, information and communication actions, including 
corporate communication of the political priorities of the Union as far as they are related to 
the  general  objectives  of  the  Programme,  expenses  linked  to  IT  networks  focusing  on 
information processing and exchange, together with all other technical and administrative 
assistance expenses incurred by the Commission for the management of the Programme.  

2. 

3. 

1. 

2. 

3. 

The  financial  allocation  may  also  cover  the  technical  and  administrative  assistance 
expenses  necessary  to  ensure  the  transition  between  the  Programme  and  the  measures 

EN 

18 

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adopted  under  Decision  No  1639/2006/EC  of  the  European  Parliament  and  of  the 
Council21. If necessary, appropriations may be entered in the budget beyond 2020 to cover 
similar  expenses,  in  order  to  enable  the  management  of  actions  not  yet  completed  by  31 
December 2020. 

Article 5 
Participation of third countries 

1. 

The Programme shall be open to the participation of:  

(a)  European  Free  Trade  Association  (EFTA)  countries  which  are  members  of  the 
European Economic Area (EEA), in accordance with the conditions laid down in the 
EEA Agreement, and other European countries when agreements and procedures so 
allow; 

(b)  Acceding countries, candidate countries and potential candidates in accordance with 
the general principles and general terms and conditions for the participation of those 
countries 
the  respective  Framework 
Agreements and Association Council Decisions, or similar arrangements; 

in  Union's  programmes  established 

in 

(c)  Countries  falling  under  the  scope  of  the  European  neighbourhood  policies,  when 
agreements  and  procedures  so  allow  and  in  accordance  with  the  general  principles 
and general terms and conditions for the participation of those countries in Union's 
programmes  established  in  the  respective  Framework  Agreements,  Protocols  to 
Association Agreements and Association Council Decisions.  

2. 

3. 

Entities  established  in  countries  referred  to  in  paragraph  1,  in  case  the  conditions 
established in that paragraph are not fulfilled or when those countries decide not to join the 
Programme, or entities established in other third countries may participate in actions under 
the Programme. 

Such entities shall not be entitled to receive Union financial contributions, except where it 
is indispensable for the Programme, in particular in terms of competitiveness and access to 
markets for Union enterprises. That exception shall not apply to entities which are profit-
making. 

Article 6 
 Actions to improve the framework conditions for the competitiveness and sustainability of Union 
enterprises 

1. 

2. 

The Commission shall support actions to improve and strengthen the competitiveness and 
sustainability of Union enterprises, particularly SMEs, so as to enhance the effectiveness, 
coherence  and  consistency  of  national  policies  promoting  competitiveness,  sustainability 
and the growth of enterprises in Europe.  

The Commission may support actions intended to develop new competitiveness strategies. 
Such actions may include the following: 

21 

OJ L 310, 9.11.2006, p. 15. 

EN 

19 

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(a)  measures to improve the design, implementation and evaluation of policies affecting 
the  competitiveness  and  sustainability  of  enterprises,  including  disaster  resilience, 
and to secure the development of appropriate infrastructures, world class clusters and 
business  networks,  framework  conditions  and  development  of  sustainable  products, 
services and processes;  

(b)  measures to encourage cooperation in policy making and exchange of good practices 
among  the  Member  States,  other  countries  participating  in  the  Programme  and  the 
Union's  main  competitors,  and  to  address  international  aspects  of  competitiveness 
policies. 

(c) 

support  for  SME  policy  development  and  cooperation  between  policy  makers, 
particularly  with  a  view  to  improving  the  ease-of-access  to  programmes  and 
measures for SMEs. 

The  Commission  may  support  initiatives  accelerating  the  emergence  of  competitive 
industries based on cross-sectoral activities in areas characterised by a high proportion of 
SMEs  and  with  a  high  contribution  to  the  Union's  GDP.  Such  initiatives  shall  stimulate 
development  of  new  markets  and  the  supply  of  goods  and  services  based  on  the  most 
competitive business models or on modified value-chains. They shall include initiatives to 
social 
enhance  productivity, 
responsibility.  

sustainability  and  corporate 

resource  efficiency, 

Article 7 
Actions to promote entrepreneurship 

The Commission shall contribute to promoting entrepreneurship by improving framework 
conditions affecting the development of entrepreneurship. The Commission shall support a 
business environment favourable to enterprise development and growth.   

Particular attention shall be paid to young entrepreneurs, new and potential entrepreneurs 
and female entrepreneurs, as well as specific target groups.  

The  Commission  may  support  Member  States'  measures  to  build-up  entrepreneurial 
education, skills and attitudes, in particular among potential and new entrepreneurs.  

Article 8  
Actions to improve access to finance for SMEs 

The Commission shall support actions which aim to improve access to finance for SMEs in 
their  start-up  and  growth  phases,  being  complementary  to  the  Member  States'  use  of 
financial  instruments  for  SMEs  at  national  and  regional  level.  In  order  to  ensure 
complementarity,  these  actions  will  be  closely  coordinated  with  those  undertaken  in  the 
framework of cohesion policy and at national level. Such actions shall aim to stimulate the 
supply of both equity and debt finance. 

As part of the actions referred to in paragraph 1, the Commission shall develop measures, 
subject  to  market  demand,  to  improve  cross-border  and  multi-country  financing,  thereby 
assisting SMEs to internationalise their activities in compliance with Union law.  

3. 

1. 

2. 

3. 

1. 

2. 

3. 

Details of the actions referred to in paragraph 1 of this Article are laid down in Annex II.  

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1. 

2. 

3. 

4. 

1. 

2. 

3. 

Article 9 
Actions to improve access to markets 

In  order  to  continue  improving  the  competitiveness  and  access  to  markets  of  Union 
enterprises, the Commission shall maintain its support for the Enterprise Europe Network.  

The  Commission  may  support  actions  to  improve  SMEs  access  to  the  Single  Market 
including information provision and awareness-raising. 

Specific measures shall aim to facilitate SMEs access to markets outside the Union, and to 
strengthening  existing  support  services  in  those  markets.  SMEs  may  receive  support 
through  the  Programme  as  regards  standards  and  intellectual  property  rights  in  priority 
third countries. 

Actions  under  the  Programme  may  aim  to  foster  international  industrial  cooperation, 
including industrial and regulatory dialogues with third countries. Specific measures may 
aim to reduce differences between the Union and other countries in regulatory frameworks 
for  industrial  products,  on  industrial  policy  and  the  improvement  of  the  business 
environment.  

CHAPTER III 
Implementation of the Programme 

Article 10 
Annual work programme 

In  order  to  implement  the  Programme,  the  Commission  shall  adopt  an  annual  work 
programme in accordance with the examination procedure referred to in Article 16(2). The 
annual  work  programmes  shall  set  out  the  objectives  pursued,  the  expected  results,  the 
method of implementation and their total amount. They shall also contain a description of 
the  actions  to  be  financed,  an  indication  of  the  amount  allocated  to  each  action  and  an 
indicative  implementation  timetable,  as  well  as  appropriate  indicators  for  monitoring 
effectiveness  in  delivering  outcomes  and  achievements  of  the  objectives.  They  shall 
include for grants the priorities, the essential evaluation criteria and the maximum rate of 
co-financing. 

The  Commission  shall  implement  the  Programme  in  accordance  with  the  Financial 
Regulation (Regulation (EU) No XXX/2012 [New Financial Regulation]). 

The Programme shall be implemented so as to ensure that actions supported take account 
of future developments and needs, particularly after the interim evaluation, referred to in 
Article  12(3),  and  that  they  are  relevant  to  evolving  markets,  economy  and  changes  in 
society.  

Article 11 
Support measures 

1. 

In addition to the measures covered by the work programme referred to in Article 10, the 
Commission shall regularly undertake support measures, including the following: 

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(a) 

the analysis and monitoring of sectoral and cross-sectoral competitiveness issues; 

(b) 

(c) 

the  identification  of  good  practices  and  policy  approaches,  and  their  further 
development;  

the 
impact  assessments  of  Union  measures  of  particular 
competitiveness of enterprises, with a view to identifying areas of existing legislation 
that  need  to  be  simplified,  or  areas  in  which  new  legislative  measures  need  to  be 
proposed;  

relevance 

for 

(d) 

the  evaluation  of  legislation  affecting  enterprises,  specific  industrial  policy  and 
competitiveness-related measures. 

These  support  measures  referred  to  in  paragraph  1  shall  not  necessarily  form  part  of  the 
annual work programmes referred to in Article 10. 

Article 12 
Monitoring and evaluation 

The Commission shall monitor the implementation and management of the Programme. 

The Commission shall draw up an annual monitoring report examining the efficiency and 
effectiveness of supported actions in terms of financial implementation, results and, where 
possible,  impact.  The  report  shall  include  information  on  the  amount  of  climate-related 
expenditure and the impact of support to climate-change objectives to  the extent  that the 
collection of this information does not create unjustified administrative burden for SMEs. 

By  2018  at  the  latest,  the  Commission  shall  establish  an  evaluation  report  on  the 
achievement of the objectives of all the actions supported under the Programme at the level 
of results and impacts, the efficiency of the use of resources and its European added value, 
in  view  of  a  decision  on  the  renewal,  modification  or  suspension  of  the  measures.  The 
evaluation  report  shall  also  address  the  scope  for  simplification,  its  internal  and  external 
coherence,  the  continued  relevance  of  all  objectives,  as  well  as  the  contribution  of  the 
measures  to  the  Union  priorities  of  smart,  sustainable  and  inclusive  growth.  It  shall  take 
into account evaluation results on the long-term impact of the predecessor measures; 

An evaluation report shall be established on the longer-term impacts and the sustainability 
of  effects  of  the  measures  to  feed  into  a  decision  on  a  possible  renewal,  modification  or 
suspension of a subsequent measure.  

A set of key performance indicators shall be developed as a basis for assessing the extent 
to which the objectives of the actions supported under the Programme have been achieved. 
They  shall  be  measured  against  pre-defined  baselines  reflecting  the  situation  before 
implementation of the actions. 

All  involved  parties  shall  provide  the  Commission  with  all  the  data  and  information 
necessary to permit the monitoring and evaluation of the concerned measures. 

2. 

1. 

2. 

3. 

4. 

5. 

6. 

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CHAPTER IV 
Financial provisions and forms of financial assistance 

Article 13 
Forms of financial assistance 

The  Union's  financial  assistance  under  the  Programme  may  be  implemented  indirectly  by 
delegating budget implementation tasks to the entities listed in Article XX of Regulation (EU) No 
XXX/2012 [New Financial Regulation]. 

1. 

2. 

3. 

4. 

1. 

2. 

Article 14 
Financial instruments 

Financial instruments under the Programme shall be operated with the aim of facilitating 
access  to  finance  for  growth-oriented  SMEs.  The  financial  instruments  shall  include  an 
equity facility and a loan guarantee facility. 

The financial instruments for growth-oriented SMEs may, where appropriate, be combined 
with  other  financial  instruments  established  by  Member  States  and  their  managing 
authorities in accordance with [Article 33(1)(a) of Regulation (EU) No XXX/201X [New 
Regulation on Structural Funds]], and grants funded from the Union, including under this 
Regulation. 

The financial instruments shall aim to preserve the value of assets provided by the Union 
budget. They may generate acceptable returns to  meet the objectives of other partners or 
investors.  

In  accordance  with  Article  18(4)  of  Regulation  (EU)  No  XXXX/2012  [New  Financial 
Regulation],  revenues  and  repayments  generated  by  one  financial  instrument  shall  be 
assigned  to  that  financial  instrument.  For  financial  instruments  already  set  up  in  the 
multiannual  financial  framework  for  the  2007-2013  period,  revenues  and  repayments 
generated by operations started in that period shall be assigned to the financial instrument 
in the period 2014-2020. 

Article15 
Protection of the financial interests of the Union 

The  Commission  shall  take  appropriate  measures  ensuring  that,  when  actions  financed 
under this Regulation are implemented, the financial interests of the Union are protected by 
the  application  of  preventive  measures  against  fraud,  corruption  and  any  other  illegal 
activities, by effective checks and, if irregularities are detected, by the recovery of amounts 
wrongly  paid  and,  where  appropriate,  by  effective,  proportionate  penalties  that  act  as  a 
deterrent. 

The Commission or its representatives and the Court of Auditors shall have the power of 
audit,  on  the  basis  of  documents  and  on-the-spot  checks,  over  all  grant  beneficiaries, 
contractors  and  subcontractors  and  other  third  parties  who  have  received  Union  funds 
under this Regulation.  

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3. 

4. 

1. 

2. 

1. 

2. 

3. 

The European Anti-fraud Office (OLAF) may carry out on-the-spot checks and inspections 
on economic operators concerned directly or indirectly by such funding in accordance with 
the  procedures  laid  down  in  Regulation  (Euratom,  EC)  No 2185/96  with  a  view  to 
establishing whether there has been fraud, corruption or any other illegal activity affecting 
the financial interests of the Union in connection with a grant agreement- or grant decision 
or a contract concerning Union funding. 

Without  prejudice  to  the  first  and  second  sub-paragraphs,  cooperation  agreements  with 
third  countries  and  international  organisations  and  grant  agreements  and  grant  decisions 
and  contracts  resulting  from  the  implementation  of  this  Regulation  shall  expressly 
empower the Commission, the Court of Auditors and OLAF to conduct audits, on-the-spot 
checks and inspections. 

CHAPTER V 
Committee and final provisions 

Article 16 
Committee  

The  Commission  shall  be  assisted  by  a  committee.  That  committee  shall  be  a  committee 
within the meaning of Regulation (EU) No 182/2011.  

Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall 
apply. 

Article 17 
Delegated acts 

The Commission shall be empowered to adopt delegated acts in accordance with Article 18 
concerning changes to the indicators provided in the  list  in Annex  I  to this  Regulation if 
these do not prove suitable to measure the progress in achieving the Programmes general 
and specific objectives.  

The Commission shall be empowered to adopt delegated acts in accordance with Article 18 
concerning  changes  to  the  details  of  the  specific  actions  set  out  in  Annex  II  to  this 
Regulation  if  economic  market  developments  so  require  or  according  to  the  results 
achieved by the Competitiveness and Innovation Framework Programme Loan Guarantee 
Facility (LGF) and the Risk Sharing Instrument (RSI) of the 7th Framework Programme for 
Risk Sharing Financial Facility.  

Where  imperative  grounds  of  urgency  so  require  such  as  rapidly  changing  economic 
conditions, the procedure provided for in Article 19 shall apply to delegated acts adopted 
pursuant to this Article. 

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1. 

2. 

3. 

4. 

5. 

1. 

2. 

3. 

4. 

5. 

Article 18 
Exercise of the delegation 

The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 
conditions laid down in this Article.  

The delegation of power referred to in Article 17 shall be conferred on the Commission for 
a period of seven years from [the date of entry into force of the basic legislative act].  

The  delegation  of  power  referred  to  in  Article  17  may  be  revoked  at  any  time  by  the 
European  Parliament  or  by  the  Council.  A  decision  of  revocation  shall  put  an  end  to  the 
delegation of the power specified in that decision. It shall take effect the day following the 
publication of the decision in the Official Journal of the European Union or at a later date 
specified therein. It shall not affect the validity of any delegated act already in force.  

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the 
European Parliament and to the Council.  

A delegated act adopted pursuant to Article 17 shall enter into force only if no objection 
has  been  expressed  by  either  the  European  Parliament  or  the  Council  within  a  period  of 
two  months  following  the  notification  of  that  act  to  the  European  Parliament  and  the 
Council  or  if  before  the  expiry  of  that  period,  the  European  Parliament  and  the  Council 
have  both  informed  the  Commission  that  they  will  not  object.  That  period  shall  be 
extended by two months at the initiative of the European Parliament or the Council. 

Article 19 
Urgency procedure  

Delegated  acts  adopted  under  this  Article  shall  enter  into  force  without  delay  and  shall 
apply as long as no objection is expressed in accordance with paragraph 2. The notification 
of a delegated act to the European Parliament and to the Council shall state the reasons for 
the use of the urgency procedure. 

Either the European Parliament or the Council may object to a delegated act in accordance 
with the procedure referred to in Article 18(5). In such a case, the Commission shall repeal 
the act without delay following the notification of the decision to object by the European 
Parliament or the Council. 

Article 20 
Repeal and transitional provisions 

Decision 1639/2006/EC is repealed with effect from 1 January 2014.  

However, actions initiated under Decision 1639/2006/EC and financial obligations related 
to those actions shall continue to be governed by that Decision until their completion. 

The  financial  allocation  referred  to  in  Article  4  may  also  cover  the  technical  and 
administrative  assistance  expenses  necessary  to  ensure  the  transition  between  this 
programme and the measures adopted under Decision 1639/2006/EC. 

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Article 21 
Entry into force 

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

This Regulation shall be binding in its entirety and be directly applicable in all Member States. 

Done at Strasbourg, 

For the European Parliament 
The President 

For the Council 
The President 

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ANNEX I 
Indicators for general and specific objectives  

General objective: 

Impact indicator22 

1.  To  strengthen  the  competitiveness  and  sustainability  of  the  Union's  enterprises 
including in the tourism sector 

Current situation 

Long term target and milestone (2020) 

Growth of the industrial competitiveness23 

2009: -3.1%, 2008: -0.3%, 2007: +0.7% 

Annual growth of 1% and a 5% growth in 2015 

Change of administrative burden on SMEs (N° of days 
to set-up a new enterprise) 

2009:  -3.1%Number  of  days  to  set  up  new  SME:  7 
working days 

Reduction  of  number  of  days  to  set-up  a  new  SME:  3 
working days in 2020. 

EU  manufacturing  output  growth  in  eco-industries  (% 
change from previous year) 

Annual growth of 6-7% during the last years 

Annual  growth  of  8%  in  average  during  the  next 
decade; By 2015, a 50% increase in output is targeted 

General objective: 

2.  To  encourage  an  entrepreneurial  culture  and  promote  the  creation  and  growth  of 
SMEs 

Impact indicator 

Current situation 

Long term target and milestone (2020) 

SME growth in terms of added-value and employees 

Feedback  from  SMEs  and  other  final  beneficiaries  on 
added-value, utility and relevance of the Programme (to 
be measured in the Programme evaluations) through the 
Europe Enterprise Network (EEN) and on-line surveys 

In  2010  SMEs  provided  more  than  58%  of  total  EU 
turnover  (GVA);  total  number  of  employees  in  SMEs: 
87,5 million (67% of private sector jobs in the EU) 

Target increase in SMEs Gross Value-Added of 4% per 
year; annual growth of employees in SMEs of 1% 

78  %  of  satisfaction  and  positive  feedback  on  the 
added-value of the EEN 

Increase to more than 80 % of satisfaction on the value 
added of the EEN 

22 

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EN 

These indicators refer to developments in Enterprise and Industry policy area. The Commission itself is not solely responsible for the achievement of the targets. A range 
of other factors outside of the control of the Commission also affects outcomes in this area. 
NEER/REER based on ULC, excluding the impact of currency fluctuations (NEER = nominal effective exchange rate; REER = real effective exchange rate; ULC = unit 
labour costs 

27 

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SME turnover rate (start-ups and mortality) 

Specific objective:  

To  improve  framework  conditions  for  the  competitiveness  and  sustainability  of  EU 
enterprises including in the tourism sector 

Result indicator 

Latest known result 

Medium term target (result) 2017 

Activities to improve Competitiveness  

Number of simplification measures adopted  

The  Commission's  simplification  programme  was 
updated in 2010 and is on track to cut red tape by 25% 
in 2012. There were 5 simplification measures per year 
done until 2010.  

Number of "fitness" checks on quality and value-added 
of activities 

Level  of  adoption  by  companies  of  European 
sustainable  production  and  product  tools,  including 
EMAS, eco-label, and eco-design 

Four  "fitness"  checks  including  stakeholders  were 
launched 
transport, 
employment and industrial policies. Feedback included 
comments on legislation and value-added of activities.  

environment, 

in  2010 

for 

Approximately  35,000  ISO  14001  EMS  certifications 
and  4,500  EMAS  registration,  18,000  licences  for  the 
EU Ecolabel 

About 7 simplification measures per year.  

The  feedback  approach  with  "fitness"  checks  will  be 
extended  to  other  policies  and  lead  to  simplifications 
impacting positively on industry. Up to twelve "fitness" 
checks  are  foreseen,  with  the  objective  of  better 
regulation. 

apply 

their 
Significant  number  of  companies  monitor 
environmental  management 
performance, 
in 
resource 
systems  and  achieve 
productivity 
performance. 
Significant part of production are resource efficient and 
environmentally friendly products 

environmental 

improvement 

and 

Developing SME policy 

Number of Member States using SME test: 15 MS 

Number of Member States using SME test: 21 MS 

Number of Member States using SME test 

Number of media publications/clippings in all Member 
States: 60 in 2010 

Number of media publications/clippings in all Member 
States: 80 

Increased EU-wide publicity of the European Enterprise 
in  all 
Awards  with  media  publications/clippings 
Member States 

Reduction  of  start-up  time  and  complexity  for  new 
enterprises 

Reduction  of 

start-up 

time:  7  working  days

Reduction  of 

start-up 

time:  5  working  days 

New business Concepts 

So far this activity was restricted to analytical work of 
limited scale.  

Target 
new 
cumulative 
products/services  to  be  5  in  2017  (increasing  to  15  in 

number  of 

the 

for 

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Number of new products/services in the market 

Level of additional exports and corresponding monetary 
amounts 

Feedback from stakeholders on quality and value-added 
of activities 

Tourism  

Number of applications to funding  

2018 and 25 in 2019).  

As  for  exports,  no  expected  impact  in  2017  yet.  The 
share of  exports  of  the  first  generation  of  participating 
SMEs  will  appear  in  2018  with  a  target  increase  of 
20%. 

At  least  70%  of  SMEs  participating  in  2014  shall 
express a positive impact on their turn over in a survey 
done end 2017 

Number  of  applications  to  funding  (to  all  calls  for 
proposals)  in  total:  around  75  per  year  (average  for 
2011) 

Number  of  applications  to  funding  (to  all  calls  for 
proposals) in total: more than 100 per year  

Percentage  of  SMEs  (and  trend)  in  applications  for 
tourism-related funding opportunities 

Up  to  date,  no  calls  for  proposals  were  directly 
addressed to SMEs 

Number of entities adopting European Tourism Quality 
Label 

Up  to  date  no  entity  adopting  European  Tourism 
Quality Label (action in elaboration) 

Number  of  destinations  adopting 
the  sustainable 
tourism development models promoted by the European 
Destinations of Excellence 

Number  of  European  Destinations  of  Excellence 
awarded in total 98 (on average 20 per year – in 2007-
10, in 2008-20, in 2009-22, in 2010-25, in 2011-21)  

30% of calls for proposals directly addressed to SMEs 

Coverage of 50% of the evaluation schemes eligible to 
participate in the European Tourism Quality Label 

200  and  more  destinations  adopting  the  sustainable 
tourism development models promoted by the European 
Destinations of Excellence (up to 30 per year). 

Specific objective:  

To promote entrepreneurship, including among specific target groups 

Result indicator 

Latest known result 

Medium term target (result) 2017 

Support for entrepreneurship 

Figures from 2007 and 2009 are stable at 45% 

Feedback  on  the  public  perception  of  entrepreneurship 
(% of EU citizens that would like to be self employed as 
measured by Eurobarometer) 

Number  of  states 

implementing  entrepreneurship 

Number  of  states 
solutions developed at EU level: 22 (2010) 

implementing  entrepreneurship 

Number  of  nationally  run  programmes  available  to 

Increase  of  EU  citizens  that  would  like  to  be  self 
employed to 50% 

Number  of  states 
solutions developed at EU level: 25 

implementing  entrepreneurship 

Number  of  nationally  run  programmes  available  to 

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solutions developed at the EU level 

SMEs from other MS: 5 

SMEs from other MS: 10 

Number  of  nationally  run  programmes  available  to 
SMEs from other MS 

Number of simplification measures adopted for SMEs  

5 simplification measures per year (2010).  

About 7 simplification measures per year  

Specific objective: 

To improve access to finance for SMEs in the form of equity and debt 

Result indicator 

Latest known result 

Medium term target (result) 2017 

Financial Instruments for growth 

Number of firms receiving loan (credit) guarantees and 
value of lending 

Number  of  VC-backed  firms  and  value  of  investments 
(of which cross border deals) 

Proposed  instruments  are  not  yet  launched  and  not  the 
same  as  current  instruments,  so  data  from  current 
instruments may not be comparable 

Number of firms receiving loan (credit) guarantees (+/- 
95 000) and value of lending (+/- €10.7 billon) 

Number  of  VC-backed  firms:  (+/-  180)  and  value  of 
investments (+/- €220m) 

Specific objective: 

Result indicator 

To improve access to markets inside the Union and globally 

Latest known result 

Medium term target (result) 2017 

Enterprise Europe Network  

Enterprise Europe Network  

Enterprise Europe Network  

Number of partnership agreements signed 

Partnership agreements signed: 1.950 (2010) 

Partnership agreements signed: 3.000/year 

Increased recognized Network brand and brand Culture 
(e.g. brand awareness among SME population) 

Increased recognized Network brand and brand Culture: 
not measured yet 

Increased recognized Network brand and brand Culture: 
30% of SMES reached  

Clients  satisfaction  rate  (%  SMEs  stating  satisfaction, 
added-value of specific service) 

Clients  satisfaction  rate  (%  SMEs  stating  satisfaction, 
added-value of specific service): 78% 

Clients  satisfaction  rate  (%  SMEs  stating  satisfaction, 
added-value of specific service): >80% 

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Number of SMEs receiving support services 

Number  of  SMEs  receiving  support  services:  435.000 
(2010) 

Number  of  SMEs 
500.000/year 

receiving 

support 

services 

Number of SMEs participating in brokerage events and 
company missions 

SME  business  support  in  markets  outside 
the EU 

Share  (%)  of  SMEs  involved  in  international  activities 
(exports,  imports,  FDI  and  other  activities)  outside  the 
EU 

International Industrial Cooperation 

Number  of  cases  of  improved  alignment  between  EU 
and third countries’ regulations for industrial products 

Number  of  areas  and  good  practices  of  the  EU  Small 
Business  Act  which  have  been 
in 
neighbourhood and candidate countries  

introduced 

Number of SMEs participating in brokerage events and 
company missions: 45.000 (2010) 

Number of SMEs participating in brokerage events and 
company missions: 60.000/year 

13 % (2009) 

17 % (2017) 

It is estimated that in regulatory co-operation with main 
trading  partners  (US,  Japan,  China,  Brazil,  Russia, 
Canada, India) there is an average of 2 relevant areas of 
significant alignment of technical regulations  

3  relevant  areas  of  significant  alignment  of  technical 
regulations  with  main  trading  partners  (US,  Japan, 
China, Brazil, Russia, Canada, India) (2017) 

5  policy  areas  of  the  SBA  in  the  three  policy  region 
(candidate  countries  region,  neighbourhood  East  and 
neighbourhood MED) (2017) 

It is estimated that on average in the three policy region 
(candidate  countries  region,  neighbourhood  East  and 
neighbourhood MED) of the 10 policy areas of the SBA 
at  least  3  of  those  have  been  regulated  in  these 
countries. 

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ANNEX II 

ACTIONS TO IMPROVE SME ACCESS TO FINANCE 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

Actions to improve SME access to finance shall include an equity facility and a loan 
guarantee facility. 

The equity facility of the Competitiveness and SME Programme, the Equity Facility 
for Growth (EFG), shall be implemented as a window of a single EU equity financial 
instrument  supporting  EU  enterprises’  growth  and  RDI  from  the  early  stage 
(including seed) to the growth stage and financially supported by the Horizon 2020 
and this Programme. 

EFG  shall  use  the  same  delivery  mechanism  as  the  equity  facility  for  RDI  to  be 
established under Horizon 2020, according to the terms set out below. 

The Loan Guarantee Facility (LGF) shall be implemented as part of a single EU debt 
financial  instrument  for  EU  enterprises'  growth  and  RDI,  using  the  same  delivery 
mechanism  as  the  SME  demand-driven  window  of  the  debt  facility  under  Horizon 
2020 (RSI II), according to the terms set out below. 

The equity and loan guarantees facilities shall comply with the provisions regarding 
financial instruments in the Financial Regulation and in the Delegated Act replacing 
the Implementing Rules and with more detailed specific operational requirements to 
be set out in Commission guidance.  

The equity and loan guarantee facilities will be complementary to the Member States' 
use of financial instruments for SMEs in the framework of cohesion policy. 

The  equity  and  loan  guarantee  facilities  may,  where  appropriate,  allow  pooling  of 
financial  resources  with  Member  States  willing  to  contribute  part  of  the  Structural 
Funds allocated to them in accordance with [Article 33(1)(a) of the Structural Funds 
Regulation]. 

Revenues and repayments related to GIF 2 under the Competitiveness and Innovation 
Framework Programme (Decision No 1639/2006/EC of the European Parliament and 
of the Council) shall be assigned to the Competitiveness and SME Programme. 

The  financial  instruments  for  growth-oriented  SMEs  shall  be  implemented  in 
compliance with the relevant EU State aid rules. 

The Equity Facility for Growth (EFG) 

1. 

The  EFG  shall  focus  on  funds  that  provide  venture  capital  and  mezzanine  finance, 
such  as  subordinated  and  participating  loans,  to  expansion  and  growth-stage 
enterprises, in particular those operating across borders, while having the possibility 
to make investments in early stage enterprises in conjunction with the equity facility 
for RDI under Horizon 2020. In the latter case, the investment from EFG shall not 
exceed 20% of the total EU investment except in cases of multi-stage funds, where 
funding  from  EFG  and  the  equity  facility  for  RDI  will  be  provided  on  a  pro  rata 

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32 

   EN 

 
basis,  based  on  the  funds'  investment  policy.  The  EFG  shall  avoid  buy-out  or 
replacement  capital  intended  for  the  dismantling  of  an  acquired  enterprise.  The 
Commission  may  decide  to  amend  the  20%  threshold  in  light  of  changing  market 
conditions. 

2. 

Support shall be in the form of one of the following investments: 

(a)  directly by the European Investment Fund (EIF) or other entities entrusted with 

the implementation on behalf of the Commission; or 

(b)  by  funds-of-funds  or  investment  vehicles  investing  across  borders  established 
by the EIF or other entities entrusted with the implementation on behalf of the 
Commission  together  with  private  investors  and/or  national  public  financial 
institutions; 

The Loan Guarantee Facility (LGF) 

1. 

The  LGF  shall  be  operated  by  the  EIF  or  other  entities  entrusted  with  the 
implementation on behalf of the Commission. The facility shall provide: 

• 

• 

counter-guarantees and other risk sharing arrangements for guarantee schemes;  

direct  guarantees  and  other  risk  sharing  arrangements  for  any  other  financial 
intermediaries meeting the eligibility criteria. 

2. 

The LGF shall consist of the following two actions: 

• 

• 

the  first  action,  debt  financing  via  loans,  including  subordinated  and 
participating loans, or leasing, shall reduce the particular difficulties that SMEs 
face in accessing finance either due to their perceived high risk or their lack of 
sufficient available collateral; 

financing 

for  SMEs  under  appropriate 

the second action, securitisation of SME debt finance portfolios, shall mobilise 
additional  debt 
risk-sharing 
arrangements with the targeted institutions. Support for those transactions shall 
be  conditional  upon  an  undertaking  by  the  originating  institutions  to  use  a 
significant part of the resulting liquidity or the mobilised capital for new SME 
lending in a reasonable period of time. The amount of this new debt financing 
shall be calculated in relation to the amount of the guaranteed portfolio risk and 
shall  be  negotiated,  together  with  the  period  of  time,  individually  with  each 
originating institution.  

3. 

The LGF shall, except for loans in the securitised portfolio, cover loans up to EUR 
150.000 and with a minimum maturity of 12 months. The LGF shall be designed in 
such way that it will be possible to report on the innovative SMEs supported, both in 
terms of number and volume of loans.  

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

1.2. 

Policy area(s) concerned in the ABM/ABB structure 

1.3.  Nature of the proposal/initiative  

1.4.  Objective(s)  

1.5.  Grounds for the proposal/initiative  

1.6.  Duration and financial impact  

1.7.  Management method(s) envisaged  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

2.2.  Management and control system  

2.3.  Measures to prevent fraud and irregularities  

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1.  Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 

affected  

3.2. 

Estimated impact on expenditure  

3.2.1.  Summary of estimated impact on expenditure  

3.2.2.  Estimated impact on operational appropriations  

3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.4.  Compatibility with the current multiannual financial framework 

3.2.5.  Third-party participation in financing  

3.3. 

Estimated impact on revenue 

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LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1.  Title of the proposal/initiative  

Proposal for a Regulation of the European Parliament and the Council establishing a Programme for 
the Competitiveness of Enterprises and small and medium-sized enterprises (2014 – 2020) 

1.2. 

Policy area(s) concerned in the ABM/ABB structure24  

Policy area:  Enterprise and Industry 

Activities: 

Competitiveness, Industrial Policy, Innovation and Entrepreneurship  

The present policy area corresponds to the current ABB structure. For the budget year 2014 a new 
budget structure may be defined after approval of the interinstitutional agreement for the Financial 
Perspective 2014-2020. 

1.3.  Nature of the proposal/initiative  

(cid:133) The proposal/initiative relates to a new action  

(cid:133) The proposal/initiative relates to a new action following a pilot project/preparatory action25  

x The proposal/initiative relates to the extension of an existing action  

(cid:133) The proposal/initiative relates to an action redirected towards a new action  

1.4.  Objectives 

1.4.1.  The Commission's multiannual strategic objective(s) targeted by the proposal/initiative  

The multiannual strategic objective targeted by the proposed Programme is the implementation of 
the  Europe  2020  strategy,  which,  with  its  flagship  initiatives  of  smart,  sustainable  and  inclusive 
growth,  outlines  measures  to  strengthen  the  long-term  sustainability  and  competitiveness  of  EU 
enterprises  for  the  future.  The  Programme  will  also  encourage  an  entrepreneurial  culture  and 
promote the creation and growth of SMEs. In particular, the proposed Programme would contribute 
to the headline target concerning employment (75% of the 20-64 year-olds to be employed).  

1.4.2.  Specific objective(s) and ABM/ABB activity(ies) concerned  

To  improve  framework  conditions  for  the  competitiveness  and  sustainability  of  Union 

1. 
enterprises including in the tourism sector; 

2. 

3. 

24 
25 

EN 

To promote entrepreneurship, including among specific target groups; 

To improve access to finance for SMEs; 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 
As referred to in Article 49(6)(a) or (b) of the Financial Regulation. 

35 

   EN 

 
 
                                                 
4. 

To improve access to markets inside the Union and globally. 

The medium-term targets for these specific objectives are outlined in Annex I to the Regulation. 

ABM/ABB activity(ies) concerned 

A  new  budget  structure  may  be  defined  after  approval  of  the  interinstitutional  agreement  for  the 
Financial Perspective 2014-2020.  

1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.  

The  ultimate  aim  of  the  proposed  Programme  is  to  achieve  a  positive  change  in  the  economic 
situation of the European Union and of its enterprises, such as higher growth, higher employment 
and a higher number of start-ups. Efforts will focus on contributing to the objectives of the Europe 
2020  strategy  and  its  headline  targets  through  support  to  activities  of  the  flagship  initiative  “An 
integrated industrial policy for the globalisation era” and of the Small Business Act Review. 

The  key  purpose  and  role  of  the  Programme  is  to  support  the  development,  coordination  and 
implementation of a modern and effective European competitiveness policy, with particular focus 
on SMEs. 

More specifically, the specific objectives mentioned under 1.4.2 will be met by: 

– 

– 

– 

– 

improved  access  to  finance  for  growth-oriented  SMEs  and  those  with  a  potential  to 
internationalise; 

better  business  support  and  information  services  to  SMEs,  on  the  Internal  Market  and 
beyond; 

improved  exchange  of  best  practices  and  information,  benchmarking  and  policy 
coordination at regional, national and European level; 

Improved competitiveness of targeted sectors. 

European  firms  are  the  main  stakeholders  affected  by  the  underlying  drivers  of  the  problem  to 
which  the  new  Programme  should  respond.  SMEs  are  more  affected  than  larger  firms  because  of 
their  characteristics  in  terms  of  capital  ownership,  management  and  methods  of  financing,  which 
call for tailor-made policy intervention. As SMEs are the main source of new jobs in the EU, their 
development  directly  affects  the  labour  force.  Addressing  the  problems  SMEs  face  would  also 
significantly improve EU employment prospects.  

1.4.4.  Indicators of results and impact  

Specify the indicators for monitoring implementation of the proposal/initiative. 

The  results-based  management  approach  applied  to  the  current  programme  and  its  annual 
performance  monitoring  have  proved  to  be  successful  in  demonstrating  the  programme’s 
achievements  as  well  as  in  enhancing  the  EU’s  accountability.  Building  on  this  experience  and 
taking  into  account  evaluation  recommendations  received,  the  new  Programme  has  a  clear 
intervention logic (where SMART operational objectives contribute to the achievement of general 

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36 

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objectives)  and  a  set  of  corresponding  impact  and  result  indicators.  Considering  the  time  lag 
between  the  delivery  of  outputs  and  their  impact  on  the  general  objectives,  progress  towards 
meeting them will be measured as a rule at three-yearly intervals while progress towards achieving 
operational objectives will be measured on an annual basis. The whole list of indicators is provided 
as annex I to the Commission proposal for the Regulation. 

1.5.  Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term  

The  proposed  Programme  will  support  the  Commission,  Member  States  and  key  stakeholders  in 
designing,  coordinating  and  implementing  effective  competitiveness  and  entrepreneurship-related 
policies and support activities which aim at tackling the following long-term challenges: 

– 

– 

– 

– 

– 

– 

– 

Problematic access to finance 

Low levels of SME creation 

Issues in industry specialisation 

Limited capacity to adapt to sustainability challenges 

Limited internationalisation of SMEs 

Weak entrepreneurial spirit and 

Unfriendly business environment. 

In  the  short-  to  medium  term  the  new  Programme  will  address  the  following  policy,  market  and 
institutional failures: 

– 

– 

– 

– 

Lack of policy coordination 

Information asymmetries 

High transaction costs and 

Fragmentation of the regulatory environment. 

1.5.2.  Added value of EU involvement 

The  EU  is  uniquely  placed  to  provide  a  European  platform  for  policy  exchanges  and  mutual 
learning in competitiveness and SME-related policies that involves national, regional and European 
stakeholders. EU activities add value to activities at national and / or regional level by providing the 
European dimension to the collection and analysis of data, the development of statistical tools and 
methods  and  of  common  indicators.  Such  Europe-wide  evidence  is  a  prerequisite  for  a  sound 
analysis of the key factors impacting on competitiveness and SMEs. 

1.5.3.  Lessons learned from similar experiences in the past 

EIP evaluation 

The Commission has conducted the Entrepreneurship and Innovation Programme (EIP) interim and 
final  evaluations  (completed  April  2009  and  April  2011)  and  an  interim  evaluation  of  the  CIP 

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37 

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(March  2010).  These  evaluations  of  the  EIP  and  the  CIP  have  shown  that  the  objectives  of  the 
programmes  are  relevant  to  and  aligned  with  the  strategic  aims  of  EU  policies.  Despite  a  limited 
budget, progress has been visible, in particular concerning the most important actions that address 
SMEs. Interviews and other evidence point to a clear European value-added.  

EACI evaluation 

Part  of  the  EIP  budget  has  been  delegated  to  the  Executive  Agency  for  Competitiveness  and 
Innovation  (EACI).  An  evaluation,  finalised  in  May  2011,  concluded  that  EACI  was  performing 
well  and  was  an  efficient  and  effective  delivery  mechanism  for  the  initiatives  for  which  it  has 
operational responsibility. It confirmed that almost 100% of the budget had been executed. 

Public consultation  

Public  consultation  on  a  possible  successor  to  the  CIP  was  launched  as  part  of  the  impact 
assessment process. It was addressed to public and private organisations or individuals who wished 
to  give  their  views,  such  as  enterprises,  business  organisations,  research  and  innovation  support 
providers and national, regional and public administration. 

The public consultation process consisted of an online survey, a public conference, meetings with 
the representatives of Members States in the different CIP management committees and a meeting 
the  CIP  Strategic  Advisory  Board.  The  consultation  confirmed  that  many  parts  of  the  current 
programme work well, and that there is wide support for maintaining an EU programme targeted at 
supporting  SMEs  and  creating  a  favourable  business  environment.  Issues  concerning  access  to 
finance  for  SMEs  have  also  been  discussed  in  the  meetings  of  the  SME  Finance  Forum  in 
September 2010 and March 2011. 

1.5.4.  Coherence and possible synergy with other relevant instruments 

The  Commission  will  ensure  effective  coordination  between  the  Union’s  and  Member  States’ 
initiatives, on the one hand, and between different Union initiatives in related fields, on the other 
hand, thereby focussing on European added value and minimising overlaps.  

Synergies  with  other  programmes  will  be  maximised  in  particular  by  providing  a  tool  which  can 
also serve other policy objectives. The Enterprise Europe Network will provide a vehicle for links 
with other programmes and initiatives, in terms of “top-down” diffusion of information, promoting 
them, as well as “bottom-up” collection of feedback from stakeholders.  

The  new  Programme  would  avoid  overlaps  with  other  programmes:  it  will  not  cover  actions 
addressing  market  failures  related  to  innovation,  which  will  be  covered  by  the  Horizon  2020 
Programme.  In  particular,  the  financial  instruments  foreseen  under  Horizon  2020  would  focus  on 
financing  research  and  innovation-based  enterprises  whereas  the  new  Programme  would  target 
SMEs in their growth and internationalisation phases. With this target group, the new Programme 
would  also  avoid  overlaps  with  the  European  Progress  Microfinance  Facility  (Progress 
Microfinance).  The  latter  was  set  up  as  part  of  the  Union  response  to  the  crisis  with  rising 
unemployment and social exclusion. The goal of the Progress Microfinance is increasing access to 
and availability of microfinance for vulnerable groups, especially in the social economy. The same 
would apply to its successor after 2013, which will be extended to investments in social enterprises. 
Furthermore, the guarantee activities in the proposed Programme will operate alongside guarantee 
activities funded under the Structural Funds. The SMEG successor will focus more on guarantees 
supporting  cross-border  and  multi-country  lending,  as  well  as  securitisation,  in  line  with  the 
recommendations  of  the  European  Court  of  Auditors.  This  would  ensure  a  high  degree  of 

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complementarity  with  programmes  such  as  JEREMIE  which  are  focused  on  the  national  and 
regional levels. 

Careful  consideration  will  also  be  given  to  the  complementarity  of  the  new  Programme  with  the 
proposed Partnership Instrument. It will be essential that the external action of the European Union 
be complementary to the external dimension of the internal agenda of securing sustainable growth 
and jobs in Europe. 

In  order  to  achieve  the  objectives  of  the  new  Programme  and  as  underlined  in  the  Commission 
Communication  on  the  next  MFF,  it  is  essential  that  the  specific  interests  and  circumstances  of 
SMEs  are  taken  into  account  in  the  design  of  all  Union  policies  and  funding  programmes.  The 
future  financial  framework  will  be  designed  to  facilitate  the  participation  of  small  enerprises  in 
funding  programmes,  by simplifying rules, reducing the costs of participation, accelerating award 
procedures and providing a “one-stop shop” to make life easier for beneficiaries of Union funding. 

1.6.  Duration and financial impact  

X Proposal/initiative of limited duration  

– 

– 

X 

Proposal/initiative in effect from 01/01/2014 to 31/12/2020 

Financial  impact  (payment  appropriations)  from  2014  to  2024  (as  regards  the 

X 
Financial Instruments to 2035)  

(cid:133) Proposal/initiative of unlimited duration 

– 

– 

Implementation with a start-up period from YYYY to YYYY, 

followed by full-scale operation. 

1.7.  Management mode(s) envisaged26  

X Centralised direct management by the Commission  

X Centralised indirect management with the delegation of implementation tasks to: 

– 

– 

– 

– 

X 

X 

executive agencies  

bodies set up by the Communities27  

(cid:133) 

national public-sector bodies/bodies with public-service mission  

(cid:133) 
persons entrusted with the implementation of specific actions pursuant to Title V of 
the Treaty on European Union and identified in the relevant basic act within the meaning 
of Article 49 of the Financial Regulation  

(cid:133) Shared management with the Member States  

(cid:133) Decentralised management with third countries  

26 

27 

Details of management modes and references to the Financial Regulation may be found on the BudgWeb site: 
http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 
As referred to in Article 185 of the Financial Regulation. 

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X Joint management with international organisations  

Comments:  

It  is  envisaged  that  the  action  will  be  partly  directly  managed  by  the  Commission  and  partly 
indirectly by delegation to executive agencies. 

Concerning  other  possibilities  for  indirect  management  and  given  the  nature  of  the  actions  and 
projects  envisaged  within  the  proposed  Programme,  the  Commission  considers  making  use  of  an 
existing executive agency. This will concern only tasks that do not involve political choices. 

Joint  management  with  international  organisations  such  as  the  Council  of  Europe,  OECD,  the 
UNWTO  (United  Nations  World  Tourism  Organisation)  and  the  ETC  -  European  Travel 
Commission is also envisaged for certain analytical and benchmarking activities.  

The financial instruments will be implemented by the European Investment Fund. 

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2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions 

Monitoring  of  the  future  Programme’s  implementation  will  be  ensured  by  the  European 
Commission on a continual basis, directly by Commission services and indirectly by intermediaries 
such as EIF and the executive agencies which might be entrusted with the implementation of parts 
of  the  Programme.  The  Commission  will  draw  up  an  annual  monitoring  report  examining  the 
efficiency  and  effectiveness  of  supported  activities  in  terms  of  financial  implementation,  results 
and, where possible, impacts and to allow for any necessary adjustments of the policy and funding 
priorities. Performance measurement will be subject to a consistent set of indicators.  

The monitoring and evaluation system will largely rely on that of the current programme, but the 
following improvements will be made to the data collection and analysis system, as well as to the 
evaluation  and  monitoring  approach  (following  the  recommendations  from  the  evaluations  of  the 
current programme): 

– 

– 

– 

– 

formulation of a new set of specific indicators and monitoring arrangements; 

cross-reference  to  Europe  2020  flagship  indicators  to  steer  the  programme  management 
process and to provide additional input to the Europe2020 monitoring process; 

utilisation  of  counter-factual  methodologies,  comparing  samples  of  beneficiaries  with  a 
similar  set  of  non-beneficiaries,  if  relevant,  and  in  order  to  distinguish  the  impact  of  the 
the  effect  of  changing  economic 
programme  on 
circumstances.  

indicators  from 

the  proposed 

recourse to thematic evaluations across the various components of the future programme, if 
relevant. 

The new Programme will be subject to an interim and to an ex-post evaluation to assess progress 
towards  the  objectives  and  the  results.  The  interim  evaluation  will  be  completed  by  end  2017  to 
feed into the preparation of a successor instrument to the Programme. The ex-post evaluation will 
be undertaken within two years of completion of the Programme. 

2.2.  Management and control system  

2.2.1.  Risk(s) identified  

The budget of the Programme will be implemented through financial instruments, grants and public 
procurement. The risks are different for each of these different types of expenditure. Audits carried 
out by the European Court of Auditors and by the Commission’s own ex-post audits have identified 
the following main risks which remain potentially valid for this Programme: 

For  financial  instruments:  The  main  risks  identified  refer  to  eligibility  (of  international  financial 
intermediaries  (IFI's)  and  final  beneficiaries),  contractual  compliance  (transposal  of 
the 
Commission's  requirements  into  the  contractual  documentation),  process  compliance  (non-
observance of processes prescribed by the Commission) and performance (non-achievement of pre-
defined targets/objectives). 

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41 

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These risk types will be addressed taking account of the following factors: 

• 

• 

• 

• 

Significant aspects of the management and control process are carried out by the IFI.  

The  Commission  has  to  rely  to  a  significant  extent  on  the  IFIs'  management  control 
systems. 

It is important to ensure the appropriate level of controls along the implementation chain 
with clear responsibilities for all the involved partners. 

The  central  ex-ante  verification  of  the  DG's  financial  unit  applies  only  to  budgetary 
transactions with the IFI and not to project-specific. 

For  grants:  The  complex  cost  eligibility  rules  and  the  relatively  limited  financial  management 
expertise  of  certain  beneficiaries  (SMEs)  could  result  in  a  high  risk  of  incorrectly  declared  costs 
(e.g. claiming by beneficiaries of non incurred SME owner manager costs).  

The lack of a complete database with information about beneficiaries, projects and declared costs 
could make the detection of risky beneficiaries and of possible duplicate charging of costs or other 
irregularities difficult and thus result in ineffective antifraud activity.  

For  public  procurement:  Undetected  errors  or  uncorrected  imprecisions  in  tenders  or  tender 
specifications could lead to bad contract execution. 

2.2.2.  Control method(s) envisaged  

Different control methods are envisaged to address the different risks identified above 

1. FINANCIAL INSTRUMENTS  

Information on the internal control system set-up 

A management and control system based on the following measures is envisaged for the financial 
instruments: 

– 

– 

– 

– 

– 

– 

– 

– 

ex-ante assessment of the IFI 

risk based monitoring, included on the basis of standardised reporting, 

preventive  action  through  the  design  of  appropriate  eligibility,  contractual  compliance, 
process compliance and performance requirements; 

contractual  remedies  allowing  for  corrective  action  in  case  of  implementation  error 
regarding  eligibility,  contractual  compliance,  process  compliance  and  performance 
requirements; 

ex-ante controls on payments from the DG to the trust account of the IFI; 

alignment of interest measures; 

participation in governance 

audit access rights concerning IFIs, sub-intermediaries and final beneficiaries;  

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– 

– 

– 

– 

– 

a full audit trail covering the implementation chain;  

compliance and performance audits by Commission's agents  

integrated assurance building taking account of the system of internal controls and internal 
auditing  maintained  by  IFIs  and  sub-intermediaries  addressing  eligibility,  contractual 
compliance, process compliance and performance requirements;  

financial statements audited by external auditors; 

statements of assurance provided by IFIs on an annual basis. 

The verification that processes are working as designed will be ensured through several information 
channels: 

– 

– 

– 

– 

– 

– 

– 

– 

management's  knowledge  about  the  state  of  the  DG's  internal  control  systems,  gathered 
through the day-to-day work and experiences; 

the DG’s formal supervision, follow-up and monitoring arrangements; 

the results from the annual ICS review (‘full compliance with baseline requirements’); 

the results of the Risk Assessment exercise; 

the  ex-ante  and  ex-post  controls,  including  reports  of  exceptions  and/or  internal  control 
weaknesses; 

the results from the DG’s external financial audits; 

the audit and consultancy work performed by the DG's Internal Audit Capability; 

evaluations of the Programmes carried out by external evaluators. 

Auditing  by  the  IAC,  the  IAS  or  the  ECA  will  provide  further  feedback  on  the  adequacy  of  the 
control system. 

Estimation of the costs and benefits of the controls implied by the control system 

Controls envisaged have been considered in a broad sense in line with the COSO model definition 
of  internal  control  defined  as  "a  process  designed  to  provide  reasonable  assurance  regarding  the 
achievement  of  objectives  in  effectiveness  and  efficiency  of  operations,  reliability  of  financial 
reporting, and compliance with applicable laws and regulations". The costs of controls are estimated 
on  a  comprehensive  basis  covering  any  activities  which  are  directly  or  indirectly  related  with  the 
verification  of  the  rights  of  IFI,  FI  and  FB  and  the  regularity  of  the  expenditure.  Where  possible 
they  are  detailed  along  the  various  management  stages,  and  in  line  with  the  description  of  the 
control system envisaged. 

Adjustments  to  take  account  of  the  expected  changes  of  the  new  proposal  include  data  for  the 
following key changes: 

a)  Clarification  of  the  applicable  rules  under  the  Equity/Debt  Platforms  and  increased  preventive 
action through the design of appropriate requirements 

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43 

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b) Alignment of interest measures and further contractual remedies allowing for corrective action in 
case of implementation error regarding requirements. 

Assessment of the expected level of risk of non-compliance with the applicable rules 

Under  the envisaged control system, the expected  level of risk of non-compliance (defined as the 
expected risk of error of legality and regularity occurring at the level of transactions) will be kept 
below 2% on a multi-annual basis, however with a lower cost due to risk frequency and risk impact 
mitigation, stemming from the additional measures introduced. 

The error rate is expected to drop due to the clarification of the applicable rules including SMART 
requirements,  due  to  further  reinforcement  of  contractual  remedies  and  due  to  the  increased 
alignment of interest. 

2. GRANTS  

It  is  envisaged  that  a  significant  part  of  this  Programme's  budget  will  be  implemented  under 
centralised indirect management i.e. executed by the executive agencies. 

Information on the internal control system set-up 

The current internal control framework is built on the implementation of the Commission's Internal 
Control  Standards,  procedures  for  selecting  the  best  projects  and  translating  them  into  legal 
instruments,  project  and  contract  management  throughout  the  project  lifecycle,  ex-ante  checks  on 
claims,  including  receipt  of  audit  certificates,  ex-ante  certification  of  cost  methodologies,  ex  post 
audits and corrections, and evaluation.  

The  documentation  of  calls  for  proposal  contains  detailed  guidance  about  eligibility  rules  and 
notably about the most frequent errors in relation to staff costs. Beneficiaries are invited to provide 
already  when  making  a  proposal  sufficient  details  about  the  envisaged  costs  allowing  ex-ante 
verification and detection of possible errors or misunderstandings and where necessary changes of 
the implementation or adaptation of the grant agreement. This will significantly increase the legal 
certainty of beneficiaries and decrease the risk of error. 

Ex-post controls will be carried out in order to determine the representative average error rate that 
will  remain  despite  of  training,  ex-ante  checks  and  corrections.  The  ex-post  audit  strategy  for 
expenditure  under  the  Programme  will  be  based  on  the  financial  audit  of  transactions  defined  by 
Monetary  Unit  Sampling,  complemented  by  a  risk-based  sample.  The  ex-post  audit  strategy 
regarding legality and regularity will be complemented by reinforced operational evaluation and the 
anti-fraud strategy (see point 2.3 below). 

Estimation of the costs and benefits of the controls implied by the control system 

A  balance  will  have  to  be  found  between,  on  the  one  hand,  increasing  the  attractiveness  of  the 
Programme  by  reducing  the  control  burden  for  the  beneficiaries  (increased  trust  and  risk  taking 
using more flat rates, lump sums and scales of unit) and, on the other hand, ensuring that the rate of 
un-corrected errors stays as low as reasonably feasible. 

DG ENTR will establish a cost-effective internal control system that will give reasonable assurance 
that the risk of error, over the course of the multiannual expenditure period is, on a annual basis,, is 
within  the  range  of  2-5%;  with  the  ultimate  aim  to  achieve  a  residual  level  of  error  as  close  as 
possible to 2% at the closure of the multiannual programmes, once the financial impact of all audits, 
correction and recovery measures have been taken into account.  

EN 

44 

   EN 

 
The audit strategy shall aim at providing a fair and reliable representation of the risk of error and at 
effectively and efficiently examining indications of fraud. The ex-ante checks of proposals before 
signature  of  the  grant  agreement  and  clarification  of  eligibility  rules  should  not  significantly 
increase the time to contract. The authorising officers by delegation shall report annually about the 
costs  and  benefits  of  control  and  the  Commission  shall  report  to  the  legislative  authority  in  the 
framework of the Mid-Term Review about the level of non compliance that could be achieved. 

Assessment of the expected level of risk of non-compliance with the applicable rules 

A. Current sources of error 

Based on results so far, recurring errors have been identified in relation to the following: 

• 

• 

• 

personnel  costs:  charging  average  or  budgeted  costs  (rather  than  actual  costs),  failure  to 
keep adequate records of time spent on the programme, charging of ineligible items (SME 
owner-manager costs). 

other direct costs: regular errors identified are subcontracting without prior authorization, 
or without respecting the rules of value for money, etc. 

indirect costs: in a number of cases the indirect costs are a flat rate percentage of direct 
costs, and so the error in indirect costs is proportional to the error in direct costs. 

В. Proposed simplification opportunities 

The  program  will  benefit  from  the  simplification  measures included in the triennial review of the 
Financial  Regulation.  In  this  framework  the  Commission  will  use  the  possibility  to  adopt 
simplification measures as for example scales of unit cost for SME owner managers or the use of 
standard rates for staff costs in line with the beneficiaries usual account principles. 

C. Contribution of control changes to the reduction of the expected level of noncompliance 

The starting point is the status quo, based on CIP grant audits carried out so far. The rate of errors 
detected during ongoing CIP audits so far is around 5%. Based on the assumptions that: 

– 

– 

the  beneficiaries  of  grants  under  the  future  Competitiveness  and  SME  Programme  are 
similar to those who participated in the CIP, and that 

one third of the sources of errors are estimated to be those listed under point B above, 

the simplification measures included in the Financial Regulation are expected to lead to a reduction 
of  the  error  rate.  Another  reduction  of  errors  is  expected  from  the  ex-ante  clarification  of  the 
eligibility rules. 

Conclusion: taken all measures referred to above together, the ultimate aim is to achieve a residual 
level of error as close as possible to 2% by the end of the lifecycle. 

This  scenario  is  based  on  the  assumption  that  the  measures  of  simplification  are  not  subject  to 
substantial modifications in the decision making process. 

3. PUBLIC PROCUREMENT 

The internal control framework built on the implementation of the Commission's Internal Control 
Standards,  public  procurement  procedures  for  selecting  the  best  proposals  and  for  contract 

EN 

45 

   EN 

 
management throughout the project / contract, and ex-ante checks on invoices and payments shall 
avoid residual errors being above 2%. 

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures. 

In  the  framework  of  the  Commission's  Anti-Fraud  Strategy  (CAFS)28  and  with  the  assistance  of 
OLAF  through  consultation  and  participation  in  the  OLAF  Fraud  Prevention  and  Detection 
Network  (FPDNet)  DG  ENTR  has  developed  its  own  draft  Anti  Fraud  Strategy  (AFS)  covering 
measures  for  the  prevention  and  detection  of  fraud  and  irregularities  both  internally  and  towards 
beneficiaries and contractors. The AFS will be updated annually. 

In particular for grants, the DG ENTR AFS Action Plan foresees the creation of a central register of 
all  its  beneficiaries  (coordinators,  partners,  subcontractors  and  other  actors)  and  projects  (reports 
and cost declarations). This database, in combination with the planned acquisition of powerful data 
analysis tools for the detection of fraud indicators or 'red flags' will significantly improve its control 
functions and audit capabilities. 

In order to increase the knowledge and capacity for performing preventive and effective controls, 
the  DG  ENTR  AFS  Action  Plan  foresees  the  offer  of  specific  training  courses  and  guidance 
material. Furthermore, a control strategy for the evaluation of the financial and technical capacity of 
beneficiaries  will  be  developed  and  implemented  as  well  as  a  risk-categorisation  of  beneficiaries 
based on fraud-indicators, registration in IT tools and flagging for ex ante / ex post audits. 

In addition, audit procedures and guidance for risk-based ex post audits will be developed focussed 
on possible fraud cases and irregularities. This AFS will also be better aligned to the internal control 
standards,  in  particular  with  the  risk  assessment  exercise,  and  to  the  AFS  of  other  DGs  and  sub-
delegated entities. 

As  regards  the  financial  instruments,  the  Commission  shall  ensure  that  the  contractual 
documentation  with  the  IFI  contains  measures  to  prevent  fraud,  corruption  and  any  other  illegal 
activities and an obligation for the IFI to transpose these measures into their contracts with selected 
intermediaries  and  also  into  their  management  and  control  systems,  including  e.g.  monitoring 
activities based on pre-defined Commission requirements.  

28 

COM(2011)376, 24.06.2011 

EN 

46 

   EN 

 
                                                 
3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE 

3.1.  Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget  line(s) 
affected  

• 

New budget lines requested (indicative) 

In order of multiannual financial framework headings and budget lines 

Budget line 

Type of  
expenditure

Contribution  

Heading  of 
multiannual 
financial 
framework 

Heading 1 

Diff. 

from 
EFTA 
countries 

from 
candidate 
countries 

from 
third 
countrie
s 

the 
within 
of 
meaning 
Article  18(1)(aa) 
of 
the  Financial 
Regulation  

Diff. 

YES 

YES 

YES 

no 

Operational  expenditure 
Business 
Programme 

Competitiveness 

line:  02  02  01 
SME 

and 

[1] 

[1] 

Administrative expenditure line(s) 

Non-Diff. 

YES 

YES 

YES 

no  

EN 

47 

   EN 

 
 
3.2.  Estimated impact on expenditure  

EUR million (to 3 decimal places) 

3.2.1.  Summary of estimated impact on expenditure  

Heading 
framework: 1 

of  multiannual 

financial 

Number 

[Heading 
……………...……………………………………………………………….] 

DG: ENTR 

(cid:121) Operational appropriations  

Number of budget line 

Appropriations of an administrative 
nature financed  
from the envelope for specific 
programmes29 

Year 
2014 

Year 
2015 

Year 
2016 

Year 
2017 

Year 
2018 

Year 
2019 

Year 
2020 

After 2020 

TOTAL 

Commitments 

Payments 

02.0104 

(1) 
(2) 

(3) 

213.600 

256.000 

300.500 

346.000 

393.500 

441.000 

492.400 

110.240 

235.240 

287.240 

311.240 

327.240 

368.240 

439.240  364.320 

11.000 

11.000 

11.000 

11.000 

11.000 

12.000 

12.000 

Commitments 

=1+3 

224.600 

267.000 

311.500 

357.000 

404.500 

453.000 

504.400 

TOTAL appropriations 
for DG ENTR 

Payments 

=2 

+3 

121.240 

246.240 

298.240 

322.240 

338.240 

380.240 

451.240 

364.320 

2443.000 

2443.000 

79.000 

2522.000 

2522.000 

29 

EN 

Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former "BA" lines), executive agencies 
(without taking into account envisaged additional externalisation), indirect research, direct research. 

48 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
(cid:121) TOTAL operational appropriations  

Commitments 

Payments 

(cid:121)  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

TOTAL appropriations  
under HEADING <1> 
of the multiannual financial framework 

Payments 

Commitments 

(4) 

(5) 

(6) 

=4+ 
6 

=5+ 
6 

213.600 

256.000 

300.500 

346.000 

393.500 

441.000 

492.400 

110.240 

235.240 

287.240 

311.240 

327.240 

368.240 

439.240  364.320 

11.000 

11.000 

11.000 

11.000 

11.000 

12.000 

12.000 

224.600 

267.000 

311.500 

357.000 

404.500 

453.000 

504.400 

121.240 

246.240 

298.240 

322.240 

338.240 

380.240 

451.240 

364.320 

2443.000 

2443.000 

79.000 

2522.000 

2522.000 

EN 

49 

EN 

 
  
 
 
 
 
 
 
 
Heading 
framework:  

of  multiannual 

financial 

5 

" Administrative expenditure " 

EUR million (to 3 decimal places) 

DG: ENTR 

(cid:121) Human resources  

Year 
2014 

Year 
2015 

Year 
2016 

Year 
2017 

Year 
2018 

Year 
2019 

Year 
2020 

TOTAL 

18.764 

19.140 

19.522 

19.913 

20.311 

20.717 

21.131 

(cid:121) Other administrative expenditure  

0.086 

0.088 

0.089 

0.091 

0.093 

0.095 

0.097 

139.498 

0.639 

TOTAL appropriations 
under HEADING 5 DG ENTR30 
of the multiannual financial framework  

(Total  commitments 
= Total payments) 

EUR million (to 3 decimal places) 

18.850 

19.228 

19.611 

20.004 

20.404 

20.812 

21.228 

140.137 

TOTAL appropriations  
under HEADINGS 1 to 5 
of the multiannual financial framework 

Commitments 

243.450 

286.228 

331.111 

377.004 

424.904 

473.812 

525.628 

Payments 

140.090 

265.468 

317.851 

342.244 

358.644 

401.052 

472.468 

364.320 

2662.137 

2662.137 

Year 
2014 

Year 
2015 

Year 
2016 

Year 
2017 

Year 
2018 

Year 
2019 

Year 
2020 

After 2020 

TOTAL 

30 

EN 

DG ENTR envisages partial externalisation process to an existing executive agency. Amounts and imputations will be adjusted if necessary according to the results of the 
externalisation process. "Other administrative expenditure" covers the financing of the mandatory committee meetings. 

50 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.2.  Estimated impact on operational appropriations  

– 

– 

(cid:133) 

X 

The proposal/initiative does not require the use of operational appropriations  

The proposal/initiative requires the use of operational appropriations, as explained below: 

Commitment appropriations in EUR million (to 3 decimal places) 

Year 
2014 

Year 
2015 

Year 
2016 

Indicate 
objectives and 
outputs 31 

(cid:216) 

Type 
of 
output
32 

Avera
ge 
cost  
of the 
output 

Cost 

r
e
b
m
u
N

f

s Cost 

t
u
p
t
u
o

f
o

r
e
b
m
u
N

  Cost 
s
t
u
p
t
u
o

f
o

r
e
b
m
u
N

r
e
b
m
u
N

s
t
u
p
t
u
o

f
o

Year 
2017 

OUTPUTS 

Cost 

Year 
2018 

Year 
2019 

Year 
2020 

TOTAL 

s Cost 

t
u
p
t
u
o

f
o

r
e
b
m
u
N

  Cost 

r
e
b
m
u
N

s Cost 

t
u
p
t
u
o

f
o

r
e
b
m
u
N

Total 
number 
of 
outputs 

Total 
cost 

SPECIFIC  OBJECTIVE  No  1: 
Improving framework conditions 
for 
the  competitiveness  and 
sustainability of EU enterprises  

31 

32 

EN 

This  indicative  split  of  operational  appropriations  and  the  budget  distribution  between  the  proposed  actions  which  follows  form  it,  is  based  on  the  nature  of  actions 
foreseen:  for  example  the  activities  to  develop  SME  policy  and  promote  SMEs  competitiveness  are  policy  development  based  on  studies  and  events  which  will  be 
implemented via public procurement and will be comparably less costly than the activities envisaged in the areas of tourism and consumer goods which will involve calls 
for proposals.  
Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.). 

51 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
54 

13.50
0 

55 

13.75
0 

57 

14.25
0 

58 

14.500 

60 

15.00
0 

61  15.25
0 

62 

15.50
0 

407 

101.68
0 

98 

7.350 

98 

7.350  122 

9.150 

124 

9.300 

128  9.600 13
8 

10.35
0 

152  11.40

860 

64.480 

0 

9 

9.000 

12 

12.00
0 

16 

16.00
0 

19 

19.000 

22 

22.00
0 

25  25.00
0 

28 

28.00
0 

131 

131.44
0 

8  

8.000 

9 

9.000  11  

11.00
0 

13  

13.000 

14  

14.00
0 

15  15.00
0 

17  

17.00
0 

87  

86.800 

to 

Activities 
improve 
European 
Competitivene
ss 

0.
25
0 

Studies, 
impact 
assessme
nts, 
evaluatio
ns, 
conferenc
es 

Meetings, 
reports, 
databases  

0.
07
5 

Activities 
to 
develop  SME 
policy 
and 
promote  SMEs 
competitivenes
s 

Tourism 

Projects, 
prizes, 
surveys, 
events  

 New  business 
concepts 
for 
consumer 
goods 

Market 
replicatio
n-type 
projects 

1.
00
0 

1.
00
0 

Sub-total  for  specific  objective 
N°1 

EN 

52 

384.40
0 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SPECIFIC  OBJECTIVE  No  2: 
Promoting Entrepreneurship 

Activities 
promoting 
Entrepreneursh
ip 

Studies, 
campaign
s, events 

0.
5 

number 
of 
exchange
s  

0.
00
7 

Sub-total  for  specific  objective 
N°2 

SPECIFIC  OBJECTIVE  No  3: 
Improving  SMEs  access 
to 
finance 

Financial 
Instruments 

0.
00
4 

of 

No. 
SME 
beneficiar
ies  (loan 
guarantee
s)
Loan 
volume 
(€ 
million) 

5 

2.500 

6 

3.000  5 

2.500 

6 

3.000 

6 

3.000 6 

3.000 

7 

3.500 

41 

20.720 

600

4.200 

720  5.040  1300 

9.100 

1400 

9.800 

165
0 

11.55
0 

17
70 

12.39
0 

200
0 

14.00
0 

9440 

66.080 

750
0 

30.00
0 

17 
000 

68.00
0 

27 000 108.0

31 000 

00 

124.00
0 

31 
000 

124.0
00 

1 
071

2 
201 

3 384 

3 995  

4 
065 

86.800 

124.0
00 

42 
000 

168.0
00 

186500 

746.32
0 

5 
420 

24255 

31 
00
0 

4 
11
9  

EN 

53 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
of 

No. 
SME 
beneficiar
ies (VC) 

1. 
22
0 

€  million 
leveraged 
(VC)  

Sub-total  for  specific  objective 
N°3 

SPECIFIC  OBJECTIVE  No  4: 
Improving access to markets 

Enterprise 
Europe 
Network 

Partnersh
ip 
proposals 

0.
00
5 

SMEs 
receiving 
support 
services 
(per  1000 
SMEs) 

Support 
SMEs abroad 

to 

Studies 

0.
06
5 

0.
25
0

10 

12.20
0 

30 

36.60
0 

46 

56.12
0 

85 

103.70
0 

115  140.3

00 

14
0 

170.8
00 

140  170.8

566 

00 

690.00
0 

103

343 

686 

1 064 

1 
445 

1 
81
7 

1 
869 

7 327 

1436.3
20 

573
2 

28.66
0 

582
1 

29.10
5 

5923 

29.61
5 

6040 

30.200 

610
6 

30.53
0 

63
36 

31.68
0 

654
0 

32.70
0 

42 498 

212.50
0 

403

26.19
5 

418  27.17

438 

28.47 

458 

29.77 

488  31.72

0 

0 

50
8 

33.02
0 

539  35.03

3252 

5 

211.38
0 

10 

2.500 

12 

3.000  15 

3.750 

14 

3.500 

15 

3.750 18  4.500 

20 

5.000 

104 

25.951 

EN 

54 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 

5.000 

6 

6.000  7 

7.000 

9 

9.000 

10 

10.00
0 

11  11.00
0 

12 

12.00
0 

60 

60.000 

6 

1.200 

6 

1.300  8 

1.600 

10 

1.900 

10 

2.000 12  2.400 

13 

2.600 

13.249 

5 

1.000 

7 

1.400  8 

1.600 

9 

1.800 

10 

2.000 11  2.200 

12 

2.400 

62 

12.400 

SME 
centres; 
SME 
helpdesks 

Platforms
,  events, 
promotio
n 
activities 

Worksho
ps 
meetings 

1.
00
0 

0.
20
0 

0.
20
0 

to 

Support 
international 
industrial 
cooperation 

Sub-total  for  specific  objective 
N°4 

TOTAL COST 

213.6
00 

256.0
00 

300.5
00 

346.00
0 

393.5
00 

441.0
00 

492.4
00 

535.48
0 

2443.0
00 

EN 

55 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1. 

Summary  

– 

– 

The  proposal/initiative  does  not 

(cid:133) 
appropriations  

require 

the  use  of  administrative 

The  proposal/initiative  requires  the  use  of  administrative  appropriations,  as 

X 
explained below: 

EUR million (to 3 decimal places) 

Year 
2014 

Year 
2015 

Year 
2016 

Year 
2017 

Year 
2018 

Year 
2019 

Year 
2020 

TOTAL 

HEADING 
5 
of  the  multiannual 
financial framework 

Human resources  

18.764 

19.140 

19.522 

19.913 

20.311 

20.717 

21.131 

139.498 

0.086 

0.088 

0.089 

0.091 

0.093 

0.095 

0.097 

0.639 

18.850 

19.228 

19.611 

20.004 

20.404 

20.812 

21.228 

140.137 

Other  administrative 
expenditure  
Subtotal  HEADING 
5 
of  the  multiannual 
financial framework  

Outside 
HEADING 533 
of  the  multiannual 
financial framework  

Human resources  

Other 
expenditure  
of  an  administrative 
nature 
Subtotal  
outside  HEADING 
5 
of  the  multiannual 
financial framework  

TOTAL 

18.85050 

19.228 

19.611 

20.004 

20.404 

20.812 

21.228 

140.137 

33 

Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

EN 

56 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.3.2. 

Estimated requirements of human resources  

– 

– 

(cid:133) 

X 

The proposal/initiative does not require the use of human resources  

The proposal/initiative requires the use of human resources, as explained below: 

Estimate to be expressed in FTE  

(cid:121) Establishment plan posts (officials and temporary agents) 

XX 01 01 01 (Headquarters and Commission’s Representation Offices) 

110 

110 

110 

110 

110 

110 

110 

Year 
2014 

Year
2015 

Year 2016  Year 2017  Year 2018  Year 2019  Year 2020 

XX 01 01 02 (Delegations) 

XX 01 05 01 (Indirect research) 

10 01 05 01 (Direct research) 

(cid:121) External personnel (in Full Time Equivalent unit: FTE)34 

XX 01 02 01 (CA, INT, SNE from the "global envelope") 

58 

58 

58 

58 

58 

58 

58 

XX 01 02 02 (CA, INT, JED, LA and SNE in the delegations) 

XX 
01 
04 

34 

EN 

at Headquarters36 

CA= Contract Agent; INT= agency staff ("Intérimaire"); JED= "Jeune Expert en Délégation" (Young Experts in Delegations); LA= Local Agent; SNE= Seconded National 
Expert;  

57 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
yy 
35 

in delegations 

XX 01 05 02 (CA, INT, SNE - Indirect research) 

10 01 05 02 (CA, INT, SNE - Direct research) 

Other budget lines (specify) 

TOTAL 

XX is the policy area or budget title concerned. 

168 

168 

168 

168 

168 

168 

168 

The human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed 
within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure 
and  in  the  light  of  budgetary  constraints.  DG  ENTR  envisages  partially  externalisation  process  to  an  existing  executive  agency.  Amounts  and 
imputations will be adjusted if necessary according to the results of the externalisation process. 

Description of tasks to be carried out: 

Officials and temporary agents 

External personnel 

35 
36 

Under the ceiling for external personnel from operational appropriations (former "BA" lines). 
Essentially for Structural Funds, European Agricultural Fund for Rural Development (EAFRD) and European Fisheries Fund (EFF). 

EN 

58 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                                                                                                                    
3.2.4.  Compatibility with the current multiannual financial framework  

– 

– 

Proposal/initiative  is  compatible  the  Commission  proposal  for  a  multiannual 

X 
financial framework 2014-2020, COM(2011) 500 final. 

Proposal/initiative  will  entail  reprogramming  of  the  relevant  heading  in  the 

(cid:133) 
multiannual financial framework. 

Explain  what  reprogramming  is  required,  specifying  the  budget  lines  concerned  and  the 
corresponding amounts. 

[…] 

– 

Proposal/initiative requires application of the flexibility instrument or revision of the 

(cid:133) 
multiannual financial framework37. 

Explain what is required, specifying the headings and budget lines concerned and the corresponding 
amounts. 

[…] 

3.2.5.  Third-party contributions [to be completed] 

– 

The proposal/initiative does not provide for co-financing by third parties  

Appropriations in EUR million (to 3 decimal places) 

Year 
2014 

Year 
2015 

Year 
2016 

Year 
2017 

Year 
2018 

Year 
2019 

Year 
2020 

Total 

non-EU 
Member 
States participating in 
the Programme38  

TOTAL 
appropriations 
cofinanced  

Pm 

Pm 

Pm 

Pm 

Pm 

Pm 

Pm 

Pm 

37 
38 

See points 19 and 24 of the Interinstitutional Agreement. 
The  Programme  shall,  under  specific  conditions  and  subject  to  payment  of  a  financial  contribution  into  the 
Programme,  be  open  to  the  participation  of  European  Free  Trade  Association  (EFTA)  countries  which  are 
members  of  the  European  Economic  Area  (EEA),  candidate  countries  and  potential  candidates,  countries 
falling under the scope of the European neighbourhood policies (see Article 5). 

EN 

59 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.3.  Estimated impact on revenue  

– 

– 

X 

Proposal/initiative has no financial impact on revenue. 

(cid:133) 

Proposal/initiative has the following financial impact: 

–  (cid:133) 

on own resources  

–  (cid:133) 

on miscellaneous revenue  

EUR million (to 3 decimal places) 

Appropriati
ons 
available 
for 
ongoing 
budget year 

the 

Budget 
line: 

revenue 

Article …………. 

Impact of the proposal/initiative39 

Year 
N 

Year 
N+1 

Year 
N+2 

Year 
N+3 

…  insert  as  many  columns  as 
necessary in order to reflect the 
duration  of  the  impact  (see 
point 1.6) 

For miscellaneous assigned revenue, specify the budget expenditure line(s) affected. 

[…] 

Specify the method for calculating the impact on revenue. 

39 

As  regards  traditional  own  resources  (customs  duties,  sugar  levies),  the  amounts  indicated  must  be  net 
amounts, i.e. gross amounts after deduction of 25% for collection costs. 

EN 

60 

   EN