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# 52011PC0834

**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) /\* COM/2011/0834 final - 2011/0394 (COD) \*/**

  

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;

–
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
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 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 achieved[3]; the development of joint
transnational promotion strategies of Europe as home to high quality and
sustainable tourist destinations[4];
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 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.

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 experience[6]
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):

·
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

·
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 instruments[7]),
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.

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 evaluation[8] 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 evaluation[9] 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:

·
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:

–
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.

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 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.

(2)
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.

(3)
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.

(4)
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 2014-2020[15] , 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 development based on balanced
economic growth, a Programme for the Competitiveness of Enterprises and SMEs (hereinafter
"the Programme") should be established.

(7)
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.

(8)
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.

(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 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 management[19],
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 February 2011
laying down the rules and general principles concerning mechanisms for control
by the Member States of the Commission's exercise of implementing powers[20].

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

(b)
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,

(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

Article 3
Specific objectives

1.
The specific objectives of the Programme shall
be:

(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.

2.
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.

3.
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

1.
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.

2.
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.

3.
The financial allocation may also cover the
technical and administrative assistance expenses necessary to ensure the
transition between the Programme and the measures adopted under Decision No
1639/2006/EC of the European Parliament and of the Council[21]. 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 in Union's
programmes established in the respective Framework Agreements and Association
Council Decisions, or similar arrangements;

(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.
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.

3.
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.
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.

2.
The Commission may support actions intended to
develop new competitiveness strategies. Such actions may include the following:

(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.

3.
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 enhance productivity, resource efficiency, sustainability and
corporate social responsibility.

Article 7
Actions to promote entrepreneurship

1.
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.

2.
Particular attention shall be paid to young
entrepreneurs, new and potential entrepreneurs and female entrepreneurs, as
well as specific target groups.

3.
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

1.
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.

2.
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.
Details of the actions referred to in paragraph
1 of this Article are laid down in Annex II.

Article 9
Actions to improve access to markets

1.
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.

2.
The Commission may support actions to improve
SMEs access to the Single Market including information provision and
awareness-raising.

3.
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.

4.
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

1.
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.

2.
The Commission shall implement the Programme in
accordance with the Financial Regulation (Regulation (EU) No XXX/2012 [New
Financial Regulation]).

3.
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:

(a)
the analysis and
monitoring of sectoral and cross-sectoral competitiveness issues;

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

(c)
impact assessments of
Union measures of particular relevance for the 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;

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

2.
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

1.
The Commission shall monitor the implementation
and management of the Programme.

2.
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.

3.
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;

4.
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.

5.
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.

6.
All involved parties shall provide the
Commission with all the data and information necessary to permit the monitoring
and evaluation of the concerned measures.

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].

Article 14
Financial instruments

1.
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.

2.
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.

3.
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.

4.
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

1.
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.

2.
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.

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.

4.
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

1.
The Commission shall be assisted by a committee.
That committee shall be a committee within the meaning of Regulation (EU) No
182/2011.

2.
Where reference is made to this paragraph,
Article 5 of Regulation (EU) No 182/2011 shall apply.

Article 17
Delegated acts

1.
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.

2.
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.

3.
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.

Article 18
Exercise of the delegation

1.
The power to adopt delegated acts is conferred
on the Commission subject to the conditions laid down in this Article.

2.
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].

3.
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.

4.
As soon as it adopts a delegated act, the
Commission shall notify it simultaneously to the European Parliament and to the
Council.

5.
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

1.
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.

2.
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

3.
Decision 1639/2006/EC is repealed with effect
from 1 January 2014.

4.
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.

5.
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.

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                       For
the Council

The
President                                                 The President

ANNEX I
Indicators for general and specific objectives

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

Impact indicator[22] || Current situation || Long term target and milestone (2020)

Growth of the industrial competitiveness[23] Change of administrative burden on SMEs (N° of days to set-up a new enterprise) EU manufacturing output growth in eco-industries (% change from previous year) || 2009: -3.1%, 2008: -0.3%, 2007: +0.7% 2009: -3.1%Number of days to set up new SME: 7 working days Annual growth of 6-7% during the last years || Annual growth of 1% and a 5% growth in 2015 Reduction of number of days to set-up a new SME: 3 working days in 2020. 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 SME turnover rate (start-ups and mortality) || 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) 78 % of satisfaction and positive feedback on the added-value of the EEN || Target increase in SMEs Gross Value-Added of 4% per year; annual growth of employees in SMEs of 1% Increase to more than 80 % of satisfaction on the value added of the EEN

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 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 || 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. Four "fitness" checks including stakeholders were launched in 2010 for environment, transport, employment and industrial policies. Feedback included comments on legislation and value-added of activities. 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. Significant number of companies monitor their performance, apply environmental management systems and achieve improvement in resource productivity and environmental performance. Significant part of production are resource efficient and environmentally friendly products

Developing SME policy Number of Member States using SME test Increased EU-wide publicity of the European Enterprise Awards with media publications/clippings in all Member States Reduction of start-up time and complexity for new enterprises || Number of Member States using SME test: 15 MS Number of media publications/clippings in all Member States: 60 in 2010 Reduction of start-up time: 7 working days || Number of Member States using SME test: 21 MS Number of media publications/clippings in all Member States: 80 Reduction of start-up time: 5 working days

New business Concepts 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 || So far this activity was restricted to analytical work of limited scale. || Target for the cumulative number of new products/services to be 5 in 2017 (increasing to 15 in 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

Tourism Number of applications to funding Percentage of SMEs (and trend) in applications for tourism-related funding opportunities Number of entities adopting European Tourism Quality Label Number of destinations adopting the sustainable tourism development models promoted by the European Destinations of Excellence || Number of applications to funding (to all calls for proposals) in total: around 75 per year (average for 2011) Up to date, no calls for proposals were directly addressed to SMEs Up to date no entity adopting European Tourism Quality Label (action in elaboration) 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) || Number of applications to funding (to all calls for proposals) in total: more than 100 per year 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 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 solutions developed at the EU level Number of nationally run programmes available to SMEs from other MS Number of simplification measures adopted for SMEs || Figures from 2007 and 2009 are stable at 45% Number of states implementing entrepreneurship solutions developed at EU level: 22 (2010) Number of nationally run programmes available to SMEs from other MS: 5 5 simplification measures per year (2010). || Increase of EU citizens that would like to be self employed to 50% Number of states implementing entrepreneurship solutions developed at EU level: 25 Number of nationally run programmes available to SMEs from other MS: 10 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: || To improve access to markets inside the Union and globally

Result indicator || Latest known result || Medium term target (result) 2017

Enterprise Europe Network Number of partnership agreements signed Increased recognized Network brand and brand Culture (e.g. brand awareness among SME population) Clients satisfaction rate (% SMEs stating satisfaction, added-value of specific service) Number of SMEs receiving support services Number of SMEs participating in brokerage events and company missions || Enterprise Europe Network Partnership agreements signed: 1.950 (2010) Increased recognized Network brand and brand Culture: not measured yet Clients satisfaction rate (% SMEs stating satisfaction, added-value of specific service): 78% Number of SMEs receiving support services: 435.000 (2010) Number of SMEs participating in brokerage events and company missions: 45.000 (2010) || Enterprise Europe Network Partnership agreements signed: 3.000/year Increased recognized Network brand and brand Culture: 30% of SMES reached Clients satisfaction rate (% SMEs stating satisfaction, added-value of specific service): >80% Number of SMEs receiving support services 500.000/year Number of SMEs participating in brokerage events and company missions: 60.000/year

SME business support in markets outside the EU Share (%) of SMEs involved in international activities (exports, imports, FDI and other activities) outside the EU || 13 % (2009) || 17 % (2017)

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 introduced in neighbourhood and candidate countries || 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 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. || 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)

ANNEX II

Actions to improve SME access to
finance

1.
Actions to improve SME access to finance shall
include an equity facility and a loan guarantee facility.

2.
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.

3.
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.

4.
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.

5.
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.

6.
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].

7.
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.

8.
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
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;

·
the second action, securitisation of SME debt
finance portfolios, shall mobilise additional debt financing for SMEs under
appropriate 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.

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

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 structure[24]

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

¨ The proposal/initiative relates to a
new action

¨ The proposal/initiative relates to a
new action following a pilot project/preparatory action[25]

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

¨ 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

1.         To improve framework conditions
for the competitiveness and sustainability of Union enterprises including in
the tourism sector;

2.         To promote entrepreneurship,
including among specific target groups;

3.         To improve access to finance for
SMEs;

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 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
(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 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

–
X       Financial impact (payment
appropriations) from 2014 to 2024 (as regards the Financial Instruments to
2035)

¨ 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) envisaged[26]

X Centralised direct management
by the Commission

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

–
X       executive agencies

–
X       bodies set up by the Communities[27]

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

–
¨      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

¨ Shared management with the Member States

¨ Decentralised management with third countries

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.

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 programme on the
proposed indicators from the effect of changing economic circumstances.

–
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).

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;

–
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

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.

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
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.

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

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Heading 1 || Diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

[1] || Operational expenditure line: 02 02 01 Business Competitiveness and SME Programme || Diff. || YES || YES || YES || no

[1] || Administrative expenditure line(s) || Non-Diff. || YES || YES || YES || no

3.2.      Estimated
impact on expenditure

3.2.1.   Summary of estimated impact on
expenditure

EUR million (to 3 decimal places)

Heading of multiannual financial framework: 1 || Number || [Heading ……………...……………………………………………………………….]

DG: ENTR || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || After 2020 || TOTAL

Ÿ Operational appropriations || || || || || || || || ||

Number of budget line || Commitments || (1) || 213.600 || 256.000 || 300.500 || 346.000 || 393.500 || 441.000 || 492.400 || || 2443.000

Payments || (2) || 110.240 || 235.240 || 287.240 || 311.240 || 327.240 || 368.240 || 439.240 || 364.320 || 2443.000

Appropriations of an administrative nature financed from the envelope for specific programmes[29] || 02.0104 || (3) || 11.000 || 11.000 || 11.000 || 11.000 || 11.000 || 12.000 || 12.000 || || 79.000

TOTAL appropriations for DG ENTR || Commitments || =1+3 || 224.600 || 267.000 || 311.500 || 357.000 || 404.500 || 453.000 || 504.400 || || 2522.000

Payments || =2 +3 || 121.240 || 246.240 || 298.240 || 322.240 || 338.240 || 380.240 || 451.240 || 364.320 || 2522.000

Ÿ TOTAL operational appropriations || Commitments || (4) || 213.600 || 256.000 || 300.500 || 346.000 || 393.500 || 441.000 || 492.400 || || 2443.000 ||

Payments || (5) || 110.240 || 235.240 || 287.240 || 311.240 || 327.240 || 368.240 || 439.240 || 364.320 || 2443.000 ||

Ÿ TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) || 11.000 || 11.000 || 11.000 || 11.000 || 11.000 || 12.000 || 12.000 || || 79.000 ||

TOTAL appropriations under HEADING <1> of the multiannual financial framework || Commitments || =4+ 6 || 224.600 || 267.000 || 311.500 || 357.000 || 404.500 || 453.000 || 504.400 || || 2522.000 ||

Payments || =5+ 6 || 121.240 || 246.240 || 298.240 || 322.240 || 338.240 || 380.240 || 451.240 || 364.320 || 2522.000 ||

||

Heading of multiannual financial framework: || 5 || " Administrative expenditure "

EUR million (to 3
decimal places)

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

DG: ENTR ||

Ÿ Human resources || 18.764 || 19.140 || 19.522 || 19.913 || 20.311 || 20.717 || 21.131 || 139.498

Ÿ Other administrative expenditure || 0.086 || 0.088 || 0.089 || 0.091 || 0.093 || 0.095 || 0.097 || 0.639

|| || || || || || || || ||

TOTAL appropriations under HEADING 5 DG ENTR[30] of the multiannual financial framework || (Total commitments = Total payments) || 18.850 || 19.228 || 19.611 || 20.004 || 20.404 || 20.812 || 21.228 || 140.137

EUR million (to 3
decimal places)

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || After 2020 || TOTAL

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 || || 2662.137

Payments || 140.090 || 265.468 || 317.851 || 342.244 || 358.644 || 401.052 || 472.468 || 364.320 || 2662.137

3.2.2.   Estimated
impact on operational appropriations

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

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

Commitment appropriations in EUR million
(to 3 decimal places)

|| Indicate objectives and outputs [31] ò || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

|| OUTPUTS

Type of output[32] || Average cost of the output || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Total number of outputs || Total cost

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

|| Activities to improve European Competitiveness || Studies, impact assessments, evaluations, conferences || 0.250 || 54 || 13.500 || 55 || 13.750 || 57 || 14.250 || 58 || 14.500 || 60 || 15.000 || 61 || 15.250 || 62 || 15.500 || 407 || 101.680

|| Activities to develop SME policy and promote SMEs competitiveness || Meetings, reports, databases || 0.075 || 98 || 7.350 || 98 || 7.350 || 122 || 9.150 || 124 || 9.300 || 128 || 9.600 || 138 || 10.350 || 152 || 11.400 || 860 || 64.480

|| Tourism || Projects, prizes, surveys, events || 1.000 || 9 || 9.000 || 12 || 12.000 || 16 || 16.000 || 19 || 19.000 || 22 || 22.000 || 25 || 25.000 || 28 || 28.000 || 131 || 131.440

||  New business concepts for consumer goods || Market replication-type projects || 1.000 || 8 || 8.000 || 9 || 9.000 || 11 || 11.000 || 13 || 13.000 || 14 || 14.000 || 15 || 15.000 || 17 || 17.000 || 87 || 86.800

|| Sub-total for specific objective N°1 || || || || || || || || || || || || || || || || 384.400

|| SPECIFIC OBJECTIVE No 2: Promoting Entrepreneurship || || || || || || || || || || || || || || || ||

|| Activities promoting Entrepreneurship || Studies, campaigns, events || 0.5 || 5 || 2.500 || 6 || 3.000 || 5 || 2.500 || 6 || 3.000 || 6 || 3.000 || 6 || 3.000 || 7 || 3.500 || 41 || 20.720

|| number of exchanges || 0.007 || 600 || 4.200 || 720 || 5.040 || 1300 || 9.100 || 1400 || 9.800 || 1650 || 11.550 || 1770 || 12.390 || 2000 || 14.000 || 9440 || 66.080

|| Sub-total for specific objective N°2 || || || || || || || || || || || || || || || || 86.800

|| SPECIFIC OBJECTIVE No 3: Improving SMEs access to finance || || || || || || || || || || || || || || || ||

Financial Instruments || No. of SME beneficiaries (loan guarantees) || 0.004 || 7500 || 30.000 || 17 000 || 68.000 || 27 000 || 108.000 || 31 000 || 124.000 || 31 000 || 124.000 || 31 000 || 124.000 || 42 000 || 168.000 || 186500 || 746.320

|| Loan volume (€ million) || || 1 071 || || 2 201 || || 3 384 || || 3 995 || || 4 065 || || 4 119 || || 5 420 || || 24255 ||

|| No. of SME beneficiaries (VC) || 1. 220 || 10 || 12.200 || 30 || 36.600 || 46 || 56.120 || 85 || 103.700 || 115 || 140.300 || 140 || 170.800 || 140 || 170.800 || 566 || 690.000

|| € million leveraged (VC) || || 103 || || 343 || || 686 || || 1 064 || || 1 445 || || 1 817 || || 1 869 || || 7 327 ||

|| Sub-total for specific objective N°3 || || || || || || || || || || || || || || || || 1436.320

|| SPECIFIC OBJECTIVE No 4: Improving access to markets || || || || || || || || || || || || || || || ||

|| Enterprise Europe Network || Partnership proposals || 0.005 || 5732 || 28.660 || 5821 || 29.105 || 5923 || 29.615 || 6040 || 30.200 || 6106 || 30.530 || 6336 || 31.680 || 6540 || 32.700 || 42 498 || 212.500

|| SMEs receiving support services (per 1000 SMEs) || 0.065 || 403 || 26.195 || 418 || 27.170 || 438 || 28.47 || 458 || 29.77 || 488 || 31.720 || 508 || 33.020 || 539 || 35.035 || 3252 || 211.380

|| Support to SMEs abroad || Studies || 0.250 || 10 || 2.500 || 12 || 3.000 || 15 || 3.750 || 14 || 3.500 || 15 || 3.750 || 18 || 4.500 || 20 || 5.000 || 104 || 25.951

|| || SME centres; SME helpdesks || 1.000 || 5 || 5.000 || 6 || 6.000 || 7 || 7.000 || 9 || 9.000 || 10 || 10.000 || 11 || 11.000 || 12 || 12.000 || 60 || 60.000

|| || Platforms, events, promotion activities || 0.200 || 6 || 1.200 || 6 || 1.300 || 8 || 1.600 || 10 || 1.900 || 10 || 2.000 || 12 || 2.400 || 13 || 2.600 || || 13.249

|| Support to international industrial cooperation || Workshops meetings || 0.200 || 5 || 1.000 || 7 || 1.400 || 8 || 1.600 || 9 || 1.800 || 10 || 2.000 || 11 || 2.200 || 12 || 2.400 || 62 || 12.400

|| Sub-total for specific objective N°4 || || || || || || || || || || || || || || || || 535.480

|| TOTAL COST || || 213.600 || || 256.000 || || 300.500 || || 346.000 || || 393.500 || || 441.000 || || 492.400 || || 2443.000

3.2.3.   Estimated
impact on appropriations of an administrative nature

3.2.3.1.            Summary

–
¨      The proposal/initiative does not require the use of
administrative appropriations

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

Other administrative expenditure || 0.086 || 0.088 || 0.089 || 0.091 || 0.093 || 0.095 || 0.097 || 0.639

Subtotal HEADING 5 of the multiannual financial framework || 18.850 || 19.228 || 19.611 || 20.004 || 20.404 || 20.812 || 21.228 || 140.137

Outside HEADING 5[33] 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

3.2.3.2.            Estimated
requirements of human resources

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

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

Estimate to
be expressed in FTE

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020

Ÿ Establishment plan posts (officials and temporary agents)

XX 01 01 01 (Headquarters and Commission’s Representation Offices) || 110 || 110 || 110 || 110 || 110 || 110 || 110

XX 01 01 02 (Delegations) || || || || || || ||

XX 01 05 01 (Indirect research) || || || || || || ||

10 01 05 01 (Direct research) || || || || || || ||

Ÿ 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 yy [35] || at Headquarters[36] || || || || || || ||

|| 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 || 168 || 168 || 168 || 168 || 168 || 168 || 168

XX is the
policy area or budget title concerned.

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 ||

3.2.4.   Compatibility
with the current multiannual financial framework

–
X       Proposal/initiative is compatible the
Commission proposal for a multiannual financial framework 2014-2020, COM(2011)
500 final.

–
¨      Proposal/initiative will entail reprogramming of the relevant
heading in the 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 multiannual financial framework[37].

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 Programme[38] || || || || || || || ||

TOTAL appropriations cofinanced || Pm || Pm || Pm || Pm || Pm || Pm || Pm || Pm

3.3.      Estimated
impact on revenue

–
X       Proposal/initiative has no financial
impact on revenue.

–
¨      Proposal/initiative has the following financial impact:

–
¨         on own resources

–
¨         on miscellaneous revenue

EUR million (to 3 decimal places)

Budget revenue line: || Appropriations available for the ongoing budget year || Impact of the proposal/initiative[39]

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)

Article …………. || || || || || || || ||

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

[…]

Specify the method for calculating the
impact on revenue.

[1]               COM(2011) 500 final.

[2]               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.

[3]               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.

[4]               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.

[5]               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.

[6]               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

[7]               http://ec.europa.eu/cip/files/docs/public-consultation-annex2-to-final-report\_en.pdf

[8]               http://ec.europa.eu/enterprise/dg/files/evaluation/final\_report\_eip\_interim\_evaluation\_04\_2009\_en.pdf

[9]               http://ec.europa.eu/cip/files/docs/eip-final-evaluation-report\_en.pdf

[10]             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.

[11]             COM (2010) 2020 final.

[12]             COM (2010) 614 final.

[13]             COM(2008) 394 final.

[14]             COM(2011) 78 final.

[15]             COM(2011) 398 final.

[16]             OJ L 124 20.5.2003, p. 36

[17]             2009 Eurobarometer survey on entrepreneurship.

[18]             COM(2010) 352 final.

[19]             OJ C 139, 14.6.2006, p.1

[20]             OJ L 55, 28.2.2011, p. 13

[21]             OJ L 310, 9.11.2006, p. 15.

[22]             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.

[23]             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

[24]             ABM: Activity-Based Management – ABB: Activity-Based
Budgeting.

[25]             As referred to in Article 49(6)(a) or (b) of the Financial
Regulation.

[26]             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

[27]             As referred to in Article 185 of the Financial
Regulation.

[28]             COM(2011)376, 24.06.2011

[29]             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.

[30]             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.

[31]             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.

[32]             Outputs are products and services to be supplied (e.g.:
number of student exchanges financed, number of km of roads built, etc.).

[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.

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

[35]             Under the ceiling for external personnel from
operational appropriations (former "BA" lines).

[36]             Essentially for Structural Funds, European Agricultural
Fund for Rural Development (EAFRD) and European Fisheries Fund (EFF).

[37]             See points 19 and 24 of the Interinstitutional
Agreement.

[38]             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).

[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.

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