CELEX: 51992PC0470(02)
Language: en
Date: 1993-01-13
Title: Proposal for a Council Decision on a multiannual programme (1994 to 1997) of Community measures to ensure the continuity of policy for enterprise, in particular SMEs, inthe Community

COMMISSION OF THE EUROPEAN CŒfYlUNITIES
                                                      COM(92) 470 final
                                                      Brussels, 13 January 1993
                              THE ENTERPRISE DIMENSION
                         ESSENTIAL TO COMMUNITY GROWTH
                    Community measures to intensify and to ensure the
                 continuity of a policy for enterprise, in particular SMEs, in
                                        the Community
                                       PROPOSAL FOR A
                                     COUNCIL DECISION
       on a multiannual programme (1993-96) of Community measures to intensify
            the priority areas of policy for enterprise, in particular SMEs, in the
                                          Community
                                (presented.by the Commission)
                                      PROPOSAL FOR A
                                    COUNCIL DECISION
      on a multiannual programme (1994-97) of Community measures to ensure the
         continuity of policy for enterprise, in particular SMEs, in the Community
                               (presented by the Commission)
94 t
AH
 ---pagebreak---      THE ENTERPRISE DIMENSION ESSENTIAL TO
               COMMUNITY GROWTH
EXPLORATORY MEMORANDUM
     INTENSIFICATION OF PRIORITY ENTERPRISE
     POLICY MEASURES IN ORDER TO STIMULATE
           GROWTH IN THE COMMUNITY
I.  OBTECTIVES
II. PRIORITY AREAS FOR INTENSIFICATION
A)      DEVELOPMENT OF EURO-INFO-CENTRES TO
        FACILITATE     ACCESS    TO    COMMUNITY
        INFORMATION
B)      DEVELOPMENT OF NON-CONFIDENTIAL AND
        CONFIDENTIAL PARTNER-SEARCH NETWORKS -
        BRE and BC-NET
C)      STEPPING UP ACTIVITIES TO PUT BUSINESSMEN
        IN DIRECT CONTACT WITH ONE ANOTHER
        UNDER      THE    EUROPARTENARIAT     AND
        INTERPRISE PROGRAMME AND PROMOTING
        CROSS-BORDER SUBCONTRACTING
D)      IMPROVING THE ADMINISTRATIVE AND LEGAL
        ENVIRONMENT OF ENTERPRISES
E)      PROMOTING COMMUNITY INSTRUMENTS
III. CONCLUSION
 ---pagebreak---     ENSURING THE CONTINUITY OF A POLICY FOR
      ENTERPRISE, IN PARTICULAR SMEs, IN THE
                        COMMUNITY
I.   OBJECTIVES
II. MEASURES TO ENSURE THE CONTINUITY OF
     ENTERPRISE POLICY
A)       MEASURES AIMED MORE PARTICULARLY AT
         AREAS UNDER DEVELOPMENT
         Small firms and craft businesses
         The distributive sector
         Cooperatives,      mutual    societies,   non-profit
         associations and foundations
B)       ENCOURAGING         AN    IMPROVED       FINANCIAL
         ENVIRONMENT
C)       OBSERVATION        AND    EVALUATION      OF    THE
         POLICY
         European SME observatory
         Improving statistics on SMEs
         Evaluation of existing policy and measures
III.   CONCLUSION
               PROPOSALS FOR DECISIONS
1. Proposal for a Council Decision on a multiannual
     programme (1993-96) of Community measures to
     intensify the priority areas of policy for enterprise, in
     particular SMEs, in the Community
2.   Proposal for a Council Decision on a multiannual
     programme (1994-97) of Community measures to
     ensure the continuity of policy for enterprise, in
     particular SMEs, in the Community
 ---pagebreak---                              EXPLANATORY MEMORANDUM
In Edinburgh on 11-12 December 1992, the European Council, endorsing the
guidelines put forward by the Commission, agreed action on a wide scale to
support growth in the Community.
The Declaration on Promoting Economic Recovery in Europe (1) states that:
"Recognizing the importance of SMEs for creating employment and stimulating
growth, the European Council called upon the Council and the Commission to
ensure that the burdens from Community legislation on small and medium-
sized enterprises are reduced (including through the use of simplified
schemes and exemption limits in the field of indirect taxation) and that full
information about Community support is provided to SMEs. It asked the
Commission to accelerate the actions in favour of SMEs which have proven
their worth at the Community level".
SMEs account for a major share of GDP, employment and regional
development in the Community, and thus make a significant contribution to its
economy (2).
The current crisis of confidence and the economic difficulties now afflicting
Community action (3) nevertheless underline the soundness of the analysis
underlying the launch of an enterprise policy, and also of the measures taken
since. The need to intensify and continue the policy has now been recognized
and a priority part of it has been made central to the recovery and expansion
 of the Community economy.
In this context, in order to restore the confidence of businessmen and hence
 stimulate their involvement in the economic process, it is essential to maintain
the indivisibility of the enterprise policy framework. The objective of reviving
 growth justifies anticipating and increasing the Community's effort with regard
 to priority measures capable of mobilizing enterprises to achieve the recovery
 objective.
 (1) European Council, Edinburgh, 11-12 December 1992, Conclusions of the Presidency,
      Annex 4 to part A, point 8
 (2) According to the second Commission report "Enterprises in Europe", of the 11.6 million
      enterprises surveyed in 1988, 96.3% had less than 20 employees, 3.4% between 20 and 200
      employees and less than 0.2% had between 200 and 500 employees, accounting overall for
      70.2% of employment in the EEC; the proportion varies across the different regions of the
      Community. ISBN-92826-4609-2.
 (3) There has been a marked deterioration in short-term economic prospects. The lowering of
      growth forecasts in relation to those made in spring 1992 (1% growth now probable in
      1993 as against 1.7% previously) is an indication of a worsening in the economic situation
      even greater than expected (the threshold of 10% unemployment will probably be passed),
      with a longer timescale for recovery. This latter may be due to a number of factors, in
      particular the loss of competitiveness of some products on external markets due to the
      appreciation of certain currencies and especially, according to periodic surveys, a marked
      crisis in consumer and business confidence.
 ---pagebreak---                                         -2-
To mobilize businessmen in the short term, it is essential to hold up the long
term prospects which the Community intends to provide in support of the
steady expansion of enterprises, and in particular of SMEs. The need for
longer-term action is the reason why a proposal for a decision has been put
forward which identifies the instruments and areas which will ensure the
continuity of enterprise policy.
The co-existence within the unitary framework of enterprise policy of two
proposals for decisions, each with its own value added, should make it
possible to optimize the macro- and micro economic effects of the enterprise
dimension.
A degree of balance between these two aspects of enterprise policy is necessary
to ensure that action to restore business confidence in a depressed economy
 does not jeopardize the credibility of Community action by neglecting the need
to tackle long-term structural change.
 This programme in favour of enterprises therefore seeks to reinforce
 immediately those areas for priority action which could provide an immediate
 response to the needs for enterprises to adapt in a period of uncertainty. It will
 also have to ensure the continuity of supporting measures, whether of a
 general nature or in favour of specific categories of enterprises, in order to
 avoid merely shifting in time or from one business category to another the
 tendency towards negative expectations whose effect on economic
 development is clearly seen today.
 The general economic situation calls for a special effort where enterprises are
 concerned, which must supplement the substantial activity carried out in their
 regard for several years, designed to ensure the thorough involvement of
 enterprises, especially small and medium-sized ones, in a Community
 economy and society in full evolution.
 ---pagebreak---                             -3-
INTENSIFICATION OF PRIORITY ENTERPRISE POLICY MEASURES IN
      ORDER TO STIMULATE GROWTH IN THE COMMUNITY
                        (1993-1996)
 ---pagebreak---    INTENSIFICATION OF PRIORITY ENTERPRISE POLICY MEASURES IN
          ORDER TO STIMULATE GROWTH IN THE COMMUNITY
I.   OBJECTIVES
In order to ensure that Community enterprise policy involves a significant
value added element and enables it to contribute to economic revival, the
actions most closely geared to the situation of enterprises must be greatly
developed and the interaction of instruments intensified.
A major objective is to allow enterprises - beyond the necessary structural
changes and greater competition - to seize the opportunities provided by the
new dimension of the internal market.
In the context of the Europeanisation of enterprises, the direct effect of
strengthening instruments is therefore a crucial factor for growth. It must be
based both on the information and cooperation networks set up and on the
promotion of existing Community instruments, particularly the strengthening
of technological potential, and must also promote the adaptation of the
administrative and legal environment to the development of business initiative.
As part of increasing internationalization, as regards both business strategy and
the growing importance of partnership in industrial and technical cooperation,
full account should be taken of the importance of external relations with non-
Community countries as markets are rapidly opening up.
Networks and instruments should thus continue to be expanded to non-
Community countries, in line with the priorities of external affairs and
development policy. The aim is the mutual one of creating the best possible
conditions for contact between Community and third-country businesses, on
the basis of know-how already tested at Community level, provided the proper
functioning of instruments is not thereby jeopardized.
Against this background, the instruments and measures developed to help
SMEs should be directed, by way of priority, at the new European Economic
Area, bringing in the EFTA countries, and also the countries of eastern and
central Europe. Measures should be developed in complementarity with those
provided for in the Community's various trade and development agreements,
and in other assistance and cooperation programmes.
The selection of the priority areas of enterprise policy to be reinforced with a
view to economic recovery takes into consideration the results of the
evaluation of the 1990-93 programme being carried out pursuant to Decision
91/319/EEC (4). The evaluation recognized the soundness of the measures
and their capacity to fulfil the tasks set for them, especially their relay effect in
getting Community objectives across to firms. This why it has been decided
that the priority areas advanced are those best able, once the resources at their
disposal are increased, to sustain a process of reviving enterprises' activity.
 (4) Comments by the Commission on the Deloitte & Touche Report on the evaluation of the
     Community's enterprise policy, SEC(92) 1999 of 11 november 1992.
 ---pagebreak---                                         -5-
II. PRIORITY AREAS FOR INTENSIFICATION
  A)     DEVELOPMENT OF EURO-INFO-CENTRES TO FACILITATE ACCESS
          TO COMMUNITY INFORMATION
1. Information is one of the main factors contributing to the development
and EuropeanLzation of businesses, and the Commission will endeavour to
achieve maximum synergy between all the information intermediaries
available to businesses.
The main priority is therefore given to reinforcing and developing the
Euro Info Centres (EIC) network.
Tailored to the needs of businesses, the Euro Info Centres network plays a
dual role, both upstream and downstream of the Commission administration:
     downstream, by disseminating information on Community affairs
     extremely widely through the many relay points branching out from the
     210 EICs;
     upstream, by stimulating highly valuable feedback on the regional
     economic climate in which businesses are operating.
This information is available to all members of the network and will become
increasingly important as the different regions take a greater share of the trade
generated by completion of the internal market.
Certain specializations, duly identified and encouraged by the networks's
central unit, help to increase the added value of the network as a whole
through the dissemination of increasingly operational information and the
preparation of integrated information packages.
The EICs also provide practical information and assistance for firms wishing
directly to exploit the opportunities offered by Community programmes and
 increasingly open public procurement.
The EIC network thus emerges as a highly effective diversified, multifunctional
 Community instrument- with a high added value - providing enterprises with
 information through decentralized small-business organizations, whose
 European activities it helps to stimulate.
 2. In view of the foregoing, both the structure of the network and the nature
 of the information provided need to be adjusted in a climate of broad dialogue
which must enable businessmen to establish strategies quickly in connection
with the effective functioning of the large single market.
 ---pagebreak--- With this in mind, the following matters will be proposed:
    adjusting the composition of the network so as to take greater account of
    existing specialized networks (specializing by size of business -craft
    industry - or by sector) and granting further requests to join the network
    from decentralized relays currently operating as subnetworks;
    setting up new correspondence centres outside the Community, to take
    into account the needs of firms wishing to internationalize their
    operations;
    speeding up the process of making available reliable information targeted
    to their real needs of businesses in the context of the single market, in
    particular in the form of integrated information products, of the database
    type;
     as part of the financing of EICs, partial Commission funding of
     decentralized promotion work and database consultation to boost network
     effectiveness; the latter financing formula would replace the arrangement
    whereby free access is granted to Community databases only, a system
    which is to be phased out. The Commission's contribution would be
     conditional on the EICs achieving precise objectives, especially in
     penetration local business life.
 B)       DEVELOPMENT OF NON-CONFIDENTIAL AND CONFIDENTIAL
          PARTNER-SEARCH NETWORKS - BRE and BC-NET
3. The strategy of joint development of the two partner-search instruments
(BRE and BC-NET) will take account of the different aspects of the quality-
improving approach supported by the Council from 1991, when it revised
Decision 89/490/EEC, and of more recent factors resulting from the internal
and external evaluation of the measures in this field:
     awareness measures and training for the business advisers belonging to
     these two networks will reflect the observed evolution towards greater
     interest in technological, financial and marketing cooperation;
     cooperation between the partner-search instruments (BRE and BC-NET)
     and other decentralized networks will be encouraged making it possible to
     provide a service closer to enterprises'needs: e.g.the BRE and BC-NET
     networks could flank initiatives of the Interprise type upstream and
     downstream; the networks will also seek appropriate forms of cooperation
     with business organizations, chambers of commerce and industry and
     chambers of trade so as to increase the network effect of the instruments
     and make them more effective.
 ---pagebreak---                                         -7-
4. The BUSINESS COOPERATION CENTRE (BRE) specializes in non-confidential
searches for business partners and enables firms to be approached direct via
the network of local correspondents in all Member States and in certain third
countries.
The development of the BRE will be continued in accordance with the
approach of recent years, in particular:
    BRE's scope will be extended by increasing the number of correspondents
    inside and outside the Community;
    the quality of service will be improved by increasing the professionalism of
    the network correspondents;
    the intensification of cooperation between members of the network will be
    supported.
The BRE network should also remain a simple and flexible system to use, since
these are extremely important factors in making it accessible to the greatest
number and in winning the esteem of correspondents and businesses alike.
 Thus, a number of operational improvements will be made:
     to identify more clearly the types of cooperation sought and the aims
     pursued, such as the gradual merger of EIC Conferences with the BRE
     to improve the instrument itself, notably by shortening file processing
     times in the central unit for managing the network.
 5. BUSINESS COOPERATION NETWORK (BC-NET), a large network specializing in
 confidential searches for business partners, will step up the drive for quality
 and productivity by focusing on the following points:
     providing stronger support for network members, in terms of training and
     computerization in particular, so that business advisers are able to give
     priority to the preliminary information-gathering phase and facilitate
     contacts between potential partners by giving businessmen an insight into
     new market opportunities;
     stepping up monitoring activities on the basis of regular reporting so that
     results can be assessed more closely in terms of agreements concluded
     and the necessary adjustments can be made to the nomenclatures, the
     computer system and the management of subnetworks;
     introducing and gradually adjusting charges for the service to help not
     only to reduce public expenditure, but also to help raise the quality of the
     service by making the network more homogeneous in terms of its
     preparation and follow-up capacity; after an initial phase in which a charge
     would be made for each cooperation profile, the possibility will be
      discussed with the advisers of changing over to a system of flat-rate annual
      charges, in the light of market conditions;
      the development of synergies with other Community measures, in
     particular following those already begun on the improvement of
      cooperation in the field of human resources and research and
      development - especially the better use of research results, and in close
      connection with other Community programmes, such as those for the
      financing of SMEs and public procurement.
 ---pagebreak---                                        -8
  C)    STEPPING UP ACTIVITIES TO PUT BUSINESSMEN IN DIRECT
        CONTACT WITH ONE ANOTHER UNDER THE EUROPARTENARIAT
        AND INTERPRISE PROGRAMME AND PROMOTING CROSS-BORDER
        SUBCONTRACTING
6. The EURQPARTENARIAT programme will continue to pursue the twin
objectives of business expansion and regional development.
On the basis of the results of the internal evaluation currently being carried
out, the Commission will endeavour to promote better preparation of
enterprises and better follow-up of results in cooperation with national bodies.
An effort will be made to ensure the balanced participation of firms in the
Community, in neighbouring European countries and in the Mediterranean
countries.
The structural impact of the events will be stepped up and special attention
paid to the existence in the region concerned of organizations that can provide
follow-up.
Europartenariats have so far chiefly concerned Objective 1 regions and this
priority will be maintained. It will, however, be necessary to see that they are
extended to the Objective 2 and 5(b) regions.
7. The INTERPRISE programme has also attracted strong support from
businesses, public bodies, trade associations and chambers of commerce,
trade, etc.
Support should continue to be given to sectoral or intersectoral meetings of
this type and in particular to schemes promoting cooperation within and
beyond the Community on priority topics such as the process of privatization,
in which the position and role of SMEs should be strengthened.
Furthermore, to ensure interaction between programmes, Interprise meetings
could follow Europartenariats reasonably closely, in order to benefit from all
the contacts initiated during the main event, in close coordination with other
existing instruments (technology transfer days and investment forums - Sprint).
8. Efforts to build up PARTNERSHIP WITH BUSINESSES OUTSIDE THE COMMUNITY follow a
similar approach to the one for those within it.
Since the aim is to encourage businesses in Member States and third countries
to cooperate, the necessary finance will be drawn mainly from programmes
developed as part of the Community's external relations policy.
An initial project of this type has been run with Tunisia and has confirmed the
soundness of the approach. On this basis, a multiannual pilot programme
 (Med Invest) is being prepared for the Mediterranean countries.
Against such a background, the Interprise programme should continue to be
 opened up to businesses in third countries in conjunction with its
 Europeanization and internationalization objectives.
 ---pagebreak---                                          -9-
9. In CROSS-BORDER SUBCONTRACTING, account has to be taken of the rapid and
far-reaching changes that are affecting the sectors concerned.
The "total quality" approach is now a key factor in competitiveness, which
depends not only on product quality but also on management principles
designed to reduce malfunctions in the production process. Clearly, the
requisite standard of quality must be achieved by all the links in the chain.
Consequently, many main contractors are now signing cooperation
agreements with subcontractors in order to bring them up to the same
standard of quality. Stocks having been reduced through just-in-time delivery,
management is now being taken into account as a factor contributing to
competitiveness.
These trends call for action to stimulate partnership on a longer-term basis
between large firms and SMEs in order to guarantee product and service
 quality over time.
 In this context, Community action should continue to facilitate the emergence
 of a European market in subcontracting by:
       improving knowledge of the legal situation and economic importance of
       subcontracting, even in sectors that are still fairly effectively walled off;
       promoting the harmonization of auditing and certification procedures with
       a view to arriving at comparable quality standards enabling mutual
       recognition agreements to be concluded; in general, such action should
       give preference to mutual recognition agreements entered into on a
       voluntary basis;
       creating a genuine Europe-wide subcontracting network will facilitate
       cross-border contacts and exchanges of experience between trade
       associations; this is especially important for the competitiveness of the
       European economy, particularly in such key sectors as motor vehicles and
       electronics, for which pilot projects will be proposed to speed up the
       adjustment process.
  10. Measures to stimulate and back up cooperation between businesses will
 also be maintained. This is because, although a large number of Community
 firms already generate a proportion of their turnover outside their home
 country, notable differences do exist between sectors and regions in the
 Community. It is therefore essential to bear these sectoral and geographical
 factors in mind when adapting and diversifying the action to be taken, so as to
 stimulate the sectors in greatest need and thus contribute to efforts to boost
 activity.
 Likewise, there is no doubt that a firm's size is a factor in determining whether
  it is able to engage in cross-border cooperation and whether it stands to
  benefit. Special attention should therefore be devoted to the difficult situation
  of small firms and craft businesses as part of the single approach to enterprise
  policy.
 ---pagebreak---                                             -10
  D)      IMPROVING THE ADMINISTRATIVE AND LEGAL ENVIRONMENT OF
          ENTERPRISES
11. Given the likely acceleration in the completion of the internal market, a
favourable business environment is increasingly important, especially for
SMEs, and will require increased Community action.
The new business environment will impose new responsibilities on
Community institutions and national authorities as regards transparency,
supervision and partnership. In March 1992 the Commission set up a group to
look at these problems and make proposals to the Commission.
The group's report (5) was received on 27 October and the Commission has
formulated an initial response (6) ahead of the European Council in
Edinburgh. This will form the background for the Commission's proposals to
make the Community business environment simpler and more transparent.
12. With this in mind, the Commission has already published two reports on
administrative simplification to help businesses, and especially SMEs, in the
Community (7). In view of the conclusions of the second report, it intends, in
collaboration with the Member States, to increase the future impact of this
work by wider circulation of the information gathered and by encouraging
follow-up measures in the Member States. Joint studies bringing together the
Member States and the Commission should enable progress to be made in
perfecting existing simplification techniques, e.g. in terms of cost-benefit
analysis.
It is also important to ensure that all decision-makers are more aware of the
objectives and techniques of simplification. The Member States should
therefore be working towards the same goal as the Commission, as suggested
by Council Resolution of 24 November 1992 (8).
 13. The incorporation into the Community's decision-making process of a
phase of assessment of the impact on enterprises of proposed measures must
 remain a key element of the Community mechanism for improving the
business environment. Impact assessment, based on the assessment form, will
 require improvement along the lines indicated in the second report on
 administrative simplification recently adopted by the Commission.
 The impact assessment system is still relatively new and a considerable amount
 of Community legislation predates it. The Commission has stated that, in the
 preamble to future proposals for legislation, it will set out the reasons for the
 legislation it is putting forward in the light of the principle of subsidiarity. It
will also be re-examining some Community rules so as to bring them into line
with that principle. The Member States too might undertake action along the
 same lines at national, regional and local level.
 (5)  The Internal Market After 1992: Meeting the Challenge, SEC(92) 2044, 29 October 1992.
 (6)  SEC(92) 2277, 26 November 1992.
 (7)  SEC(89) 726, 19 June 1989 and SEC(92) 1867, 27 October 1992.
 (8)  Council Resolution on administrative simplification, yet to be published in the Official
      Journal.
 ---pagebreak---                                         -11-
This exercise should cover not only Community legislation proper, but also a
number of procedures associated with Community measures, such as
formalities to be complied with. The task will be to collect information on the
impact on enterprises of existing Community legislation in the light of the
experience gained when it was implemented and, where necessary, to make
proposals for reducing the administrative burden (9).
14. Finally, greater efforts will have to be made to coordinate activities under
the Community's enterprise policy and the various Community programmes
which could benefit SMEs, without jeopardizing the objectives of each of the
policies concerned.
This should be accompanied by a strengthening of cooperation with the
Member States as regards all the initiatives pursued in addition to those
existing in some Member States or which are likely to be taken up by public or
private intermediaries.
 Priority should also be given to intensifying and improving the quality of
 consultations organized with the trade bodies concerned. Regular meetings
will be organized in future and will, as far as possible, involve other
 Commission departments; this forum should put greater weight on dialogue
 and conciliation so that, on the one hand, die measures envisaged by the
 Commission can be made known and, on the other, information can be
 obtained in return concerning the entrepreneurial sensibilities which should
 be taken into account at Community level.
 To this end, certain initiatives already in progress could be maintained with a
 view to the increased Europeanization of businesses. Support could be given,
 for example, to improving the representation of SMEs at European level to
 facilitate relations with European standardization bodies.
 15. In future, increasing attention will have to be paid to the practical obstacles
 SMEs still have to cope with, if they are to make the most of the single internal
 market. For example, the increase in cross-border trade will inevitably lead to
 a proliferation of litigation between nationals of different Member States. Here
 it might be useful, in line with the report on "The internal market after 1992:
 meeting the challenge" (10), to think in depth about how to help simplify the
 formalities governing the reciprocal recognition and enforcement of
 arbitration awards.
   E)       PROMOTING COMMUNITY INSTRUMENTS
  16. Businesses are faced with a new rules stemming in particular from the
 change in the regulatory environment alongside the creation of the single
 market.
  (9) SEC(92)1867, 27 October 1992.
  (10) see note 5
 ---pagebreak---                                         -12
To encourage their development in this new environment, the Community has
already implemented a series of appropriate Community programmes and
instruments.
It is now up to businesses to take initiatives enabling them to seize these
opportunities, thus contributing to efforts to boost the economy. However, the
availability of Community programmes and instruments must be
complemented by an increased communication and promotion effort and by
specific business-stimulation measures.
The Community's communication measures will be maintained and enhanced
on the basis of experience with the promotion campaign carried out in 1992
and the mobilization brought about by the European business week in March
1992.
 17. One priority for this increased effort will be to strengthen the
technological potential of SMEs. This will involve widening SME participation
in Community research programmes and improving access by such
enterprises to the results of Community research. With this in view, the
Commission will see that initiatives are properly coordinated, in compliance
with the objectives for each programmes, wether these have a horizontal
purpose or are intended for specific fields.
Independent SMEs must take a greater part in the Community's research and
technological development programmes if they are to have a fair chance
 alongside large firms in the race to improve international competitiveness and
 if they are to be better able to integrate the results of research and innovation
 into their growth strategies.
 Close coordination will be ensured with measures to be taken under, for
 example, the fourth framework programme for research and technological
 development (11).
 A considerable portion of the funds allocated to the promotion of Community
 instruments will be dedicated to the extension to other specific R&D
 programmes of the feasibility premiums successfully tried out in the context of
 Brite/Euram (1987-91).
 Also financed will be the extension of the Craft pilot project, currently being
 carried out, to new research topics and new fields of technology.
 Existing measures under Value and Sprint should be continued and
 encouraged. Specifically, Value relay centres could be set up alongside certain
 Euro Info Centres to provide additional synergy. The potential of BC-Net could
  also be exploited for the purpose.
  Considerable efforts must also continue to enable firms, and particularly
 SMEs, to make full use of the results of research and technological
  development work in the different fields covered. The seed capital pilot
  scheme has indeed contributed to the exploitation of technological potential,
  given that nearly three quarters of investments already implemented have
  related to innovation and technological development and the trend is towards
  an increase in this proportion. This measure will be strengthened in the period
  1993-96.
  (11) COM(92) 406, 9 October 1992.
 ---pagebreak---                                          -13
In addition to the measures provides for under the 3rd and 4th framework
programmes in the field of R&DT, and in coordination with them, the
following lines of action will be developed:
      informing SMEs more effectively;
       simplifying procedures for submitting research projects;
       evaluating the results of research activities involving SMEs;
       accompanying measures to the setting-up of research projects by means of
       appropriate financial mechanisms
 18. The method applied by EURQMANAGEMENT, which is to select a number of
specialist consultants throughout the Community who then carry out an audit
and advise businesses, has been used for the first time in the area of research
and technological development. An evaluation is currently being made. If it
turns out to be positive, the Community will work towards this approach being
incorporated into the Member States' own programmes, if necessary by
making an initial financial contribution.
The same method might in future be adopted in other areas, to the extent that
 it is a sound instrument for spreading and supporting the use by enterprises of
 Community programmes and instruments.
 III. CONCLUSION
 In view of the deterioration in short-term economic prospects, and of the
 increasingly complex mechanisms which make up the business environment,
 the Commission must attach particular importance to supporting, and indeed
 restoring, the confidence of enterprises, a vital effort in generating the growth
 needed for the successful implementation of the internal market programme.
 It is desirable, therefore, that any measure which is capable of curbing or
 reversing negative expectations on the part of businessmen should be
 highlighted and implemented as quickly as possible.
 The measures identified in this document have proved their value with regard
 to informing and supporting enterprises in their attempts to gain access to the
 internal market, and on expanded markets. The intensification proposed here
 makes it possible, therefore, not only to boost support for growth but to
 provide those elements of permanence which enterprise policy needs.
 ---pagebreak---                          14-
ENSURING THE CONTINUITY OF A POLICY FOR ENTERPRISE, IN
         PARTICULAR SMEs, IN THE COMMUNITY
                     (1994-1997)
 ---pagebreak---                                            -15-
     ENSURING THE CONTINUITY OF A POLICY FOR ENTERPRISE, IN
                   PARTICULAR SMEs, IN THE COMMUNITY
I.   OBJECTIVES
Enterprise policy, particularly that in favour of SMEs, which, as underlined by
the Council resolution of 17 June 1992 (12), is an established part of
Community action, could be a key element of the strategy of restoring both the
credibility of Community policy and business confidence.
The continued existence of these needs is explained by the fact that many
enterprises, particularly SMEs, are still not able to participate fully in an
integrated market and to take advantage of the opportunities that the
completion of the internal market offers at this stage, thus heightening the
uncertainty and negative expectations of enterprises. A great deal more has to
be done therefore to restore business confidence.
Of enterprises wishing to, or with the potential to, Europeanize or
internationalize their operations, there are still too few SMEs which have
anticipated the completion of the internal market and have thus implemented
strategies to deal with the progressive globalization of markets (13).
Participating in a process of globalization of markets represents an alternative
strategy, requiring different analytical instruments and forms bf action, the
availability of which depends on the enterprise's size, sector and location and
on the existence of associated services.
The Community therefore has a major role to play in providing enterprises
with instruments for understanding and analysing the changing economic and
social realities in Europe and in the world, as well as specific and direct back-
 up to help enterprises achieve their full potential.
By providing added value to instruments already existing at national or
 regional level, the Community can make a significant contribution to the
 Europeanization and internationalization of enterprises, as shown by the
 evaluation report on enterprise policy (14). In so doing, the Community may
 act to improve competitiveness by providing administrations and businesses in
 Member States with the capacity to analyse and understand situations at
 Community or indeed European level, with support for coordination of
policies and with a capability for experimenting with specific tools and
 instruments, in particular to assist sectors undergoing development such as the
 craft industry, the distributive sector, cooperatives, mutual societies and non-
 profit-making associations and foundations.
 (12)OJn°L178ofl5.792
 (13) European economy and social Europe, Special number 1990 ISBN 92-826-1819-6.
 (14) Comments by the Commission on the Deloitte and Touche report on the evaluation of the
      Community's enterprise policy, SEC(92)1999 of 11 November 1992.
 ---pagebreak---                                               -16-
II. MEASURES TO ENSURE THE CONTINUITY OF ENTERPRISE POLICY
  A)       MEASURES AIMED MORE PARTICULARLY AT AREAS UNDER
           DEVELOPMENT
1. The horizontal nature of enterprise policy means that all types of small,
medium-sized and large enterprise, whether in manufacturing or in services,
are concerned. The 1990-93 action programme specifically included
cooperatives, mutual societies and non-profit-making associations; it also
enabled a pilot scheme to be funded for SMEs in the distributive sector.
The Community will ensure the continuity of these specific measures flanking
its enterprise policy.
SMALL FIRMS AND CRAFT BUSINESSES
2. Small businesses, craft businesses and artistic enterprises are nearly five
million in number and account for some twenty million people. They should
be able to benefit, in the same way as larger enterprises, from the positive
impact of completion of the internal market both in terms of developing their
working methods and skills and in marketing their products.
However, a number of enterprises of this type are still at a disadvantage faced
with the reality of the internal market and the internationalization of the
economy. They therefore tend to approach the necessary adjustments from the
viewpoint of resistance to increased competition rather than by implementing
a strategy of global response to the challenges and opportunities which the
single market presents.
In the light of the outcome of the Avignon conference (15) and after wide-
ranging discussions with the parties concerned, the gradual implementation of
a number of measures has been embarked upon aimed at slowly bringing
these enterprises closer to all of the activities pursued by the Community as a
preliminary to their involvement in the Community's mechanisms.
The suitability of this approach was acknowledged by the Economic and Social
 Committee, which, in the recently adopted own initiative report (16), makes a
large number of additional requests. The Commission proposes that the
 following, inter alia, be taken up:
      developing mutual awareness among small firms and craft enterprises,
      particularly by improving the access to information and cooperation
      between the bodies representing them;
      improving access to new technologies through greater participation in
      R&D programmes and support for innovation transfer;
 (15) Record of the first European craft industry coinference, CEC-DGXXIII
 (16) OJ [pending]; the Deloitte & Touche evaluation report referred to above (see note 14)
      also stressed the importance of specific measures in this field.
 ---pagebreak---                                             -17-
     improving support for crossborder cooperation by taking account of the
     specific situations of the craft industry in frontier regions in policies on
     subcontracting, the environment andfinancialmarkets;
These new developments in Community action to assist the craft industry will
also enable specific measures to be taken as a follow-up to the Avignon
conference and to the direction outlined by the Council in Decision
91/319/EEC of 18 June 1991.
THE DISTRIBUTIVE SECTOR
3. For enterprises in the distributive sector, the effects of the internal market
are felt mainly at the supply level, thus reinforcing the strong concentration
trends which already exist. The SMEs in this sector are seeking to obtain
comparable advantages so that they can defend themselves against these
trends, and horizontal grouping]» are therefore being formed, increasingly
across frontiers. One of the bases for this approach, and one of the conditions
for its success, is the integration of new technologies in the organization of
distributive activities. The ability of an enterprise in the distributive sector to
meet consumer demand will depend on its adaptation to advanced information
and communication systems.
Owing to the heterogeneous nature of the management culture in the
distributive sector, the SMEs operating in that sector are experiencing major
difficulties in making equivalent use of information technologies.
The Community has sought to respond to this phenomenon by means of a
limited pilot project, which is currently being assessed. Depending on the
results of that assessment, a fresh set of stimulation measures might have to be
envisaged designed to create cross-border links between distributive firms and
between them and their suppliers through the introduction of new technology.
These measures would be in addition to the horizontal measures listed in the
 Commission's work programme, which has been welcomed by the Council
 (17).
 THE COOPERATIVE,         MUTUAL    SOCIETIES, NON-PROFIT MAKING    ASSOCIATIONS AND
 FOUNDATIONS
 4. In the cooperatives, mutual societies, associations and foundations sector,
 entities of widely differing size coexist, many of which are SMEs. They are
 distinguished by their aims and organizational modes, which call for special
 treatment.
 The Commission accordingly adopted on 18 December r991 three proposals
 for Regulations on the statutes for a European association, for a European
 cooperative society and for a European mutual society (18).
 (17) Towards a single market in distribution, COM(91) 41, 11.3-1991, and the Council's
       conclusions of 26 June 1992.
  (18) COM(91) 273, 53-1992.
 ---pagebreak---                                           18-
As already announced (19), a work programme to support the efforts of these
businesses as they face the changes brought about by the completion of the
frontier-free economic area will be implemented with a view to creating an
environment conducive to cross-border cooperation and seeking out new
activities between partners grouped together in the single market.
  B)      ENCOURAGING AN IMPROVED FINANCIAL ENVIRONMENT
5. The general effort to improve the business environment is intended to
facilitate business start-ups, continued operation and growth. Thus, the
Community has already been able to play an important role as a catalyst in the
area of business start-ups, a role which it intends to intensify in close
collaboration with all parties concerned at national and Community level.
Likewise, the conditions governing cross-border business transfers might lead
to appropriate initiatives being taken in the light of the results of a forthcoming
European conference currently being organized.
6. At all stages of its development, the enterprise is affected by its financial
environment which in the Community is currently characterized by a decline
in cash flow together with under-capitalization (especially as compared with
enterprises in the United States), in particular in SMEs.
SME organizations all stress that this should be looked at under the
 Community's enterprise policy, and the Council Resolution of 17 June 1992
 called on the Commission to examine the general aspects of financing in the
proposals it considered it should put to the Council in order to guarantee
 continuity in enterprise policy.
As part of its growth initiative, the Community has launched the idea of an
investment fund which will comprise a section specifically for SMEs. The task
 of enterprise policy in this context is essentially to examine the general
 conditions of finance for SMEs.
 7. Access to finance by borrowing is difficult for many enterprises which are
 not in a position to give traditional financial organizations sufficient guarantees
to obtain a loan (fixed assets, personal wealth, reputation, etc.).
 One solution to these difficulties which are peculiar to SMEs may lie with
 mutual guarantee companies (20), for which a European association has just
 been formed to promote such companies in the Community by means of
 direct relations between businesses.
 (19) SEC(89) 2187, 18.12.1989.
 (20) SEC(91) 1550, 5.9.1991.
 ---pagebreak---                                               -19-
In order to overcome this guarantee problem in the area of technology, the
"Technology Performance Financing" scheme, which is part of the Sprint
programme, aims to make it easier for SMEs, particularly those in traditional
industries, to acquire new technology.
In conjunction with the European Investment Bank (EIB), the conditions for
granting assistance in providing guarantees to financial intermediaries and
shares in risk capital for SMEs in assisted regions are also currently being
studied.
8. The difficulties which SMEs have in gaining access to external sources of
finance lead them to rely heavily on self-financing to secure growth. It is
therefore important to examine the measures which may increase SMEs'
capacity for self-financing.
Taxation can play an important role here. For example, the idea of allowing
one-man businesses to opt to be taxed as companies, as suggested by the
Ruding Committee and taken up in the Commission Communication to the
 Council and to Parliament (21), might help businesses not constituted as
 companies to become self-financing, corporation tax being lower in most
 Member States than the marginal rate of personal income tax.
 9. The difficulties SMEs have in increasing their own capital is also one of the
 clearly identified shortcomings in SME financing.
 In certain cases, venture capital can provide a solution to this problem. Its
 development, in particular at cross-border level, remains an important
 Community objective and there are a number of programmes to that end, such
 as Venture Consort and Eurotech Capital, or the cross-border investment
 forums organized by Sprint, where the Council has mandated the Commission
 to take action to strengthen innovation-financing infrastructure and activities
 (22).
 As regards seed capital, it should be examined whether the legal and tax
 provisions applicable to venture capital companies are appropriate for
 promoting cross-border growth in this field.
 But one of the major problems in venture capital operations, and all the more
 so in seed capital operations, is resale by funds of their own shareholdings,
 which can prove difficult due to lack of a sufficiently well-developed securities
 market. In most Member States, SMEs still find it difficult to gain access to stock
 markets because of the difficulty and the cost of the procedures involved.
 Secondary markets in the Community remain under-developed. That is why
 consideration should be given to the advisability and feasibility of promoting
 the development in Europe of a network of specialist operators in this field.
  (21) Commission Communication to the Council and to Parliament subsequent to the
       conclusions of the Ruding Committee indicating guidelines on company taxation linked to
       the further development of the internal market, SEC(92) 1118, 26.6.1992.
  (22) Council Decision 89/286/EEC of 17 April 1989, OJ No L 112, 25.4.1989.
 ---pagebreak---                                          20-
10. Practices concerning payment periods in commercial transactions and
public procurement are an important factor both in the operation of the
internal market and in improving the short-term financing capacity of SMEs,
which in general are creditors in the inter-industrial debt market. This
naturally has an adverse impact on their financial situation.
That is why the Commission is undertaking extensive consultation of interested
parties to determine the extent to which this difficulty could be alleviated (23).
Any action under the new programme will have to take account of the results
of this consultation.
 11. In addition, the Community is making a direct contribution to solving the
problems of SMEfinancein eligible areas via the structural Funds.
 Public authorities will have to ensure the greatest possible involvment of both
 side of industry, including SME representatives, in the preparation of, and
 follow-up to, the projects and programmes jointly financed by the structural
 Funds.
 12. It should be remembered that, as far as state aid in concerned, the
 Commission has always regarded aid to SMEs more favourably than aid in
 general (24), and will continue to ensure that aid granted to SMEs does not
 distort competition.
 The Commission will also continue to take a viewpoint which is decidedly in
 favour of cooperation between small and medium-sized businesses in the
 context of competition policy. Many firms do not know what they are allowed
 to do under competition rules. It is therefore important to stress the aspects of
 that policy which protect the development of cooperation, R&D, patent and
 know-how licensing, franchising and specialization agreements, provided that
 they do not restrict competition on the market.
 In this context, all available resources will be used to improve information on
 competition policy.
  13. The new discussions as part of the Community's action to stimulate an
 improved environment respond to the wish espressed by the Council in its
 resolution of 17 June 1992 that Commission proposals designed to ensure the
 continuity of the enterprise policy should include consideration of general
 financing aspects.
  (23) SEC(92) 2214, 18.11.1992.
  (24) OJ No C 213, 19.8.1992.
 ---pagebreak---                                          -21-
  C)      OBSERVATION AND EVALUATION OF THE POLICY
EUROPEAN SME OBSERVATORY
14. A European network of research centres specializing in the observation of
SMEs was set up in mid-1992 with Community support.
A need has emerged for the Community and enterprises to be given the means
of observing the development of SMEs in an environment which is undergoing
complete change as a result of the enlargement of markets. Anticipation of
changes in vital if enterprises are to adapt and thus improve their
competitiveness. This must be accompanied by an analysis and by the means to
understand the situation of enterprises, including the very smallest, in the face
of these changes. It will thus be possible regularly to adjust policies to help
them at both Community and national level, thereby maintaining the
confidence of these enterprises.
On the basis of annual reports drawn up by this network, it will be possible to
conduct a regular debate with representatives of enterprises and the
enterprises themselves on the situation of SMEs and the means they have or
need to adapt.
This innovative scheme, which is a follow-up to Decision 91/319/EEC, has just
been launched, and the debate generated by it will provide a consolidated
basis for the development of enterprise policy.
 15. In the context of improving information to businesses, the Community will
continue to provide direct information in the form of publications and support
for the organization of seminars or conferences, either of a general nature or
relating to specific aspects of Community enterprise policy.
IMPPRROVING STATITICS ON SMES
 16. The development of statistical tools will continue to be part and parcel of
most of the planned measures.
The aim will be, among other things, to make the market more transparent
through a fuller understanding of the parameters defining the structure,
 operations and performance of enterprises, and particularly small and
 medium-sized ones.
 The work will also endeavour to provide a more accurate picture of the range
 of products both in services to industry and in related areas.
An effort will be made to improve the quality of statistics on individual
 businesses through greater synergy between public and private registers.
 Lastly, administrations will be encouraged to make their files available for
 statistical processing, in order to alleviate some of the burden on businesses.
 ---pagebreak---                                        -22
EVALUATION OF EXISTING POLICY
17. As regards programmes under way, continuous internal assessment, and
occasionally external assessment, should continue to keep objectives in line
with changing situations and the relative effectiveness of the resources in play.
We must also continue to carry out, or have carried out, accompanying studies
to identify and take account of the priority needs of SMEs so that they can take
advantage of Community policies and the new dimension of the market.
III. CONCLUSION
The enterprise dimension now has a sound Community basis, thereby justified
by the need to ensure the continuity of the policy to assist business, in
particular SMEs. This is all the more important since business is a fundamental
element of European society.
Given this situation, the Community must work to make economic support
measures more convergent and devise appropriate lines of action and
corresponding measures at Community level.
This policy must rest on active partnership between the different parties
 involved: bodies representing the business interests concerned, Member States
 and Community institutions. Such synergy is essential if the Europeanization
 and internationalization process is to be given its full force and effectiveness.
 Thus, an environment conducive to the strategic development of enterprises
will help to boost positive developments in European competitiveness and
 support efforts to achieve growth.
 ---pagebreak---          -23-
PROPOSALS FOR DECISIONS
 ---pagebreak---                                            24
                                   PROPOSAL FOR A
                                  COUNCIL DECISION
 on a multiannual programme (1993-96) of Community measures to intensify
      the priority areas of policy for enterprise, in particular SMEs, in the
                                     Community
                                     (.../.../EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
and in particular Article 235 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Having regard to the opinion of the Economic and Social Committee,-*
1. Whereas on 28 July 1989 the Council adopted Decision 89/490/EEC on the
improvement of the business environment and the promotion of the
development of enterprises, and in particular small and medium-sized
enterprises, in the Community, as revised by Council Decision 91/319/EEC
ofl8Junel991;5
1   O J N o C of ,p. .
2   O J N o C of , p. .
3   O J N o C of , p. .
4   OJ No L 239, 16.8.1989, p. 33-
5   OJNoL175,    4.7.1991, p. 32.
 ---pagebreak---                                           25-
2. Whereas in its resolution of 17 June 1992 on Community action to support
enterprises, in particular small and medium-sized enterprises, including craft
industry enterprises,       the Council confirmed its undertaking to support the
consolidation of the action taken to help enterprises;
3. Whereas the evolution of the economic situation calls for an initiative to
relaunch growth, to whose success SMEs have an essential contribution to
make;
4. Whereas this situation involves proposing the adoption of a programme of
Community measures to assist SMEs which takes full account of this new
priority;
 5. Whereas the Commission has put before the Council a communication on
enterprise policy for the Community, entitled "The enterprise dimension
 essential to Community growth";'
 6. Whereas this Decision applies to all forms of enterprise, in particular small
 and medium-sized enterprises, including those in commerce and the
 distributive trades and craft enterprises, cooperatives, mutual societies,
 associations and foundations;
 7. Whereas this policy involves, in particular, the intensification and wider
 distribution of information for enterprises, the stimulation of cooperation and
 partnership between enterprises, the improvement of the administrative and
 legal environment of enterprises and the promotion of Community
 instruments to assist enterprises;
 8. Whereas, however, many measures to assist enterprises are carried out at
 Member State level and Community measures will have to complement these;
 6    OJ No C 178, 15.7.1992, p. 8.
 7    yet to be published on the OJ
 ---pagebreak---                                         26
9. Whereas it is therefore necessary to adopt immediately a programme for a
four-year period and to endow it with sufficient resources to attain its
objectives;
10. Whereas, the Treaty does not provide, for the adoption of this Decision,
powers other than those of Article 235,
HAS DECIDED AS FOLLOWS:
                                     Article 1
A programme to intensify the priority measures for enterprise policy, in
 particular for small and medium-sized enterprises (SMEs), is hereby adopted
 for a period of four years from 1 January 1993.
                                     Article 2
 The programme referred to in Article 1 is intended to intensify growth-
 oriented priority measures for enterprise policy.
 The principal objectives are as follows:
 A. to develop the Euro Info Centres to facilitate access by enterprises to
      Community information
 B. to develop the partner-search networks BRE and BC-NET
 C. to step up activities to put businessmen in direct contact with one another
      under the EUROPARTENARIAT and INTERPRISE programmes and
      promoting cross-border SUBCONTRACTING
 ---pagebreak---                                        27
D. to improve the administrative and legal environment of enterprises
E. to promote Community instruments
                                    Article 3
1.  The Commission shall implement the measures necessary for the
achievement of the objectives laid down in Article 2.
2.  The procedure laid down in Article 4 shall be followed for adopting
measures relating to:
    the adoption, experimental implementation or extension of any project
    devised for application of this Decision,
    the content and timetable of and financial assistance for measures and calls
    for proposals,
    the periodical evaluation of the results of each project in accordance with
    the timetables laid down.
3. The committee referred to in Article 4 may examine other measures
provided for by the programme.
                                     Article 4
The Commission shall be assisted by a committee composed of the
representatives of the Member States and chaired by a representative of the
Commission.
 ---pagebreak---                                        -28-
The representative of the Commission shall submit to the committee a draft of
the measures to be taken. The committee shall deliver its opinion on the draft
within a time-limit which the chairman may lay down according to the urgency
of the matter. The opinion shall be delivered by the majority laid down in
Article 148(2) of the Treaty in the case of decisions which the Council is
required to adopt on a proposal from the Commission. The votes of the
representatives of the Member States within the committee shall be weighted in
the manner set out in that Article. The chairman shall not vote.
The Commission shall adopt measures which shall apply immediately.
However, if these measures are not in accordance with the opinion of the
committee, they shall be communicated by the Commission to the Council
forthwith. In that event the Commission shall defer application of the measures
which it has decided for a period of two months from the date of
communication.
The Council, acting by a qualified majority, may take a different decision
within the time-limit referred to in the previous paragraph.
                                      Article 5
The Commission shall present an evaluation report on the implementation of
this Decision to the European Parliament, the Council and the Economic and
 Social Committee at the latest by mid-1996.
                                      Article 6
 The amount of the appropriations allocated annually to the measures provided
 for by this Decision shall be determined under the annual budgetary
 procedure.
                                      Article 7
 This Decision replaces       Council    Decision 89/490/EEC,    as  revised by
 Decision 91/319/EEC.
 Done at Brussels,
                              For the Council
 ---pagebreak---                                             29-
                                   PROPOSALFORA
                                 COUNCIL DECISION
on a multiannual programme (1994-97) of Community measures to ensure the
   continuity of policy for enterprise, in particular SMEs, in the Community
                                     (.../.../EEC)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
and in particular Article 235 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Having regard to the opinion of the Economic and Social Committee,^
1. Whereas on 28 July 1989 the Council adopted Decision 89/490/EEC on the
improvement of the business environment and the promotion of the
development of enterprises, and in particular small and medium-sized
enterprises, in the Community,        as revised by Council Decision 91/319/EEC
                  5
ofl8Junel991;
1    OJNoC of ,p. .
2   OJNoC of ,p. .
3    OJNoC of , p. .
4   OJ No L 239, 16.8.1989, p. 33-
5    OJNoL175, 4.7.1991, p. 32.
 ---pagebreak---                                        30-
2. Whereas in its resolution of 17 June 1992 on Community action to support
enterprises, in particular small and medium-sized enterprises, including craft
industry enterprises, the Council confirmed its undertaking to support the
consolidation of the action taken to help enterprises;
3. Whereas the Council recommended in that resolution that the Commission
should press ahead, having regard to the principle of subsidiarity, with the
action necessary to create an environment favourable to the competitiveness of
enterprises, in particular SMEs, and to back up their integration into the single
market after 1992;
 4. Whereas the Council also requested the Commission to submit before the
 end of 1992, in the light of the evaluations made, any proposals it deems
 necessary to ensure continuity of the policy towards enterprises;
 5. Whereas independent experts have carried out, pursuant to Article 3 of
 Council Decision 91/319/EEC, an evaluation of the results achieved from all
 aspects of the existing programme; whereas the Commission has submitted the
 report, together with its comments, to Parliament and the Council/
 8. Whereas the report confirms the appositeness of the enterprise policy the
 Community has carried out thus far, but makes proposals concerning the
 direction of certain measures;
 7. Whereas the Commission has put before the Council a communication on
 enterprise policy for the Community, entitled "The enterprise dimension
 essential to Community growth";8
 8. Whereas this Decision applies to all forms of enterprise, in particular small
 and medium-sized enterprises, including those in commerce and the
 distributive trades and craft enterprises, cooperatives, mutual societies, non-
 profit associations and foundations;
 6    OJ No C 178, 15.7.1992, p. 8.
 7    SEC(92) 1999 of 11 november 1992
 8    yet to be published in the OJ
 ---pagebreak---                                      -31-
9. Whereas small and medium-sized enterprises play an important role in
economic activity in general and in regional development, and a fundamental
role as regards dynamism, productivity, adaptability and innovation;
10. Whereas the development of a Community enterprise policy based on real
competition assumes particular importance as regards making the Community
economy more competitive and as regards employment growth, economic and
social cohesion in the Community and the continuation of the widening of the
market after 1993;
11. Whereas, however, many measures to assist enterprises are carried out at
Member State level and Community measures will have to complement these;
12. Whereas it is therefore necessary to adopt a new programme for a four-
year period and to endow it with sufficient resources to attain its objectives;
13- Whereas, the Treaty does not provide, for the adoption of this Decision,
powers other than those of Article 235,
HAS DECIDED AS FOLLOWS:
                                   Article 1
A programme to ensure the continuity of an enterprise policy, in particular for
 small and medium-sized enterprises (SMEs), is hereby adopted for a period of
 four years from 1 January 1994.
 ---pagebreak---                                       -32-
                                     Article 2
The programme referred to in Article 1 has the following objectives:
    to encourage the adjustment to structural change of sectors under
    development such as craft industry, the distributive sector, cooperatives,
    mutual societies, non-profit associations and foundations;
    to encourage an improved financial environment for enterprises;
    to promote better observation of the economic development of enterprises
    as part of the dynamic of effective implementation of the internal market.
                                     Articled
1. The Commission shall implement the measures necessary to achieve the
objectives laid down in Article 2.
2. The procedure laid down in Article 4 shall be followed for adopting
measures relating to:
     the adoption, experimental implementation or extension of any project
     devised for application of this Decision,
     the content and timetable of andfinancialassistance for measures and calls
     for proposals,
-«: the periodical evaluation of the results of each project in accordance with
     the timetables laid down.
 3- The committee referred to in Article 4 may examine other measures
provided for by the programme.
 ---pagebreak---                                          33-
                                     Article 4
The Commission shall be assisted by a committee composed of the
representatives of the Member States and chaired by a representative of the
Commission.
The representative of the Commission shall submit to the committee a draft of
the measures to be taken. The committee shall deliver its opinion on the draft
within atime-limitwhich the chairman may lay down according to the urgency
of the matter. The opinion shall be delivered by the majority laid down in
Article 148(2) of the Treaty in the case of decisions which the Council is
required to adopt on a proposal from the Commission. The votes of the
representatives of the Member States within the committee shall be weighted in
the manner set out in that Article. The chairman shall not vote.
The Commission shall adopt measures which shall apply immediately.
However, if these measures are not in accordance with the opinion of the
committee, they shall be communicated by the Commission to the Council
forthwith. In that event the Commission shall defer application of the measures
which it has decided for a period of two months from the date of
 communication.
 The Council, acting by a qualified majority, may take a different decision
 within the time-limit referred to in the previous paragraph.
                                      Article 5
 The Commission shall present an evaluation report on the implementation of
 this Decision to the European Parliament, the Council and the Economic and
 Social Committee at the latest by mid-1997.
 It shall also present to the Council, the European Parliament and the Economic
 and Social Committee a report on coordination between the initiatives taken in
 pursuance of this Decision and the various programmes manifestly in the
 interests of SMEs and craft industries but not covered by this Decision.
 ---pagebreak---                                     -34-
                                 Article 6
The amount of the appropriations allocated annually to the measures provided
for by this Decision shall be determined under the annual budgetary
procedure.
                                 Article 7
This Decision replaces Council Decision 89/490/EEC, as revised by
Decision 91/319/EEC.
Done at Brussels,
                           For the Council
 ---pagebreak---          35-
FINANCIAL STATEMENTS
 ---pagebreak---  ---pagebreak---                               FINANCIAL STATEMENT
1.   TITLE OF OPERATION
"The enterprise dimension essential to Community growth".
To intensify the priority measures for enterprise policy so as to stimulate
growth in the Community.
2.   BUDGET HEADING INVOLVED
Article B5-320.
3.   LEGAL BASIS
      Council Decision of 28 July 1989 (OJ No L 239, p. 33)
      Council resolution of 14 November 1989 (OJ No C 297, p. 2)
      Council Decision of 18 June 1991 (OJ No L 175, p. 32)
      Council resolution of 17 June 1992 (OJ No C 178, p. 8 ) .
4.   DESCRIPTION OF OPERATION
The proposal for a Council Decision to which this financial statement
relates follows on from the Council resolution of 17 June 1992, in which the
Council recommended that the Commission should press ahead, in accordance
with the principle of subsidiarity, with developing the action necessary to
create an environment favourable to the competitiveness of enterprises, in
particular SMEs, and to back up their integration into the single market
after 1992. In framing this proposal, the Commission has drawn the
necessary conclusions from the first programme, covering the period 1990-93,
and from an evaluation report which it has transmitted to Parliament and the
Council. The report confirms the overall appropriateness of the enterprise
policy which the Community has carried out so far but makes proposals
concerning the direction of certain measures.
 In Edinburgh on 11-12 December 1992, the European Council, endorsing the
guidelines put forward by the Commission, agreed action on a wide scale to
 support growth in the Community.
The Declaration on Promoting Economic Recovery in Europe* states that:
 "Recognizing the importance of SMEs for creating employment and stimulating
 growth, the European Council called upon the Council and the Commission to
 ensure that the burdens from Community legislation on small and medium-sized
 enterprises are reduced (including through the use of simplified schemes and
 exemption limits in the field of indirect taxation) and that full
 information about Community support is provided to SMEs. It asked the
 Commission to accelerate the actions in favour of SMEs which have proven
 their worth at the Community level".
       European Council, Edinburgh, 11-12 December 1992, Conclusions   of the
       Presidency, Annex 4 to Part A, point 8.
 ---pagebreak---                                        - 2 -
The operation is therefore a continuation of the measures developed under
the first programme, to which the necessary adjustments and improvements
have been made in order to comply with the acceleration of this part of
enterprise policy for the period 1993-96.
4.1   Specific   objectives of  operation
      To develop the Euro-Info-Centres to       so  as   facilitate access by
      enterprises to Community information;
      To develop the partner-search networks by expanding the activities of
      the Business Cooperation Centre (BRE) in the case of non-confidential
      cooperation, and of the Business Cooperation Network (BC-Net) in the
      case of confidential cooperation;
      To step up activities to put businessmen in direct contact with one
      another under the Europartenariat,       Interprise and Promotion of
      Cross-Border Subcontracting programmes;
      To improve the administrative and legal environment of enterprises;2
      To promote Community instruments and, in this context, to strengthen
      the technological potential of SMEs.
 4.2    Duration
 1993-96.
 4.3  Target     population
 In theory, the above-mentioned measures could affect all SMEs in the
 Community. In practice, however, the        number    of SMEs concerned   by
 cross-border measures will necessarily be smaller, reflecting the categories
 of enterprise.
 The measures are also targeted at all trade associations and other
 intermediaries (for example, chambers of commerce and craft) and the
 wholesale and retail trades. As many of the measures are implemented via
 networks of intermediaries, the number of enterprises actually affected
 cannot be precisely quantified.
 5.  CLASSIFICATION OF EXPENDITURE OR REVENUE
 Non-compulsory expenditure;   differentiated appropriations.
       Includes consultation of Member States and trade associations (ex-item
       B5-324).
 ---pagebreak---                                      - 3 -
6.  TYPE OF EXPENDITURE OR REVENUE
      Grants for joint financing with other sources in the public and/or
      private sector.
      Partial reimbursement through re-use of revenue for certain measures
      (e.g. in the case of BC-Net, charging from 1 January 1993 for the use
      of the network by non-Community industrialized countries and by
      advisers throughout the Community).
7.   FINANCIAL IMPACT
7.1   Method of calculating total cost of  operation
Experience in current and previous financial years shows that the demands on
the policy for S ME s have risen steeply. For a lack of appropriations, the
Commission has had to reject many of the projects submitted in response to
various calls for proposals. Although in certain cases the Community
contribution can be modulated according to the arrangements for implementing
the measure in order to finance as many projects as possible, the fact
remains that the Commission may well no longer be able to get essential
schemes off the ground if its financial contribution is no longer sufficient
to attract investments by its partners (businesses or intermediaries); the
Commission also has to aim to achieve a critical financial mass in the areas
concerned in order to avoid spreading funds too thinly.
This situation is reflected in all the calls for tender organized on the
basis of this budget heading. Consequently, the rates of commitment and
utilization under this heading have always been extremely high.
The volume of funding requested has to be seen in the context of the merger
of headings B5-320, B5-322 and B5-324 which the Commission has proposed in
the preliminary draft budget for 1993. Until such time as the 1993 budget
is definitively adopted, the figures for that year will remain purely
 indicative.
 ---pagebreak---                                                                                Single heading, indicative amounts
    PRIORITY AREAS FOR INTENSIFICATION                                                                                       70ÏAL
                                                                     1993           1994         1995         1996         1993/1996
     DEVELOPMENT OF EURO-INFO-CENTRES
     to facilitate access to Community information                        7.00           8.00         9.00       10.00 I        34.0C
                                                                                                                         I
    DEVELOPMENT OF PARTNER-SEARCH NETWORKS                                0.80           0.90         1.00         1.30 I        4.0G
    BRE and BC-Net
    STEPPINO UP DIRECT CONTACTS BETWEEN BUSINESSMEN
    UNDER THE EUROPARTENARIAT,
    INTERPRISE AND PROMOTION OF CROSS-BORDER
    SUBCONTRACTING  PROGRAMMES                                            (.70          7.50                       8.00         30.00 !
                                                                                                                                      !
    IMPROVEMENT OF THE ADMINISTRATIVE AND LEGAL                           0.90          1.20                       1.50          5.00 |
    ENVIRONMENT OF ENTERPRISES1                                                                                                       I
                                                                                                                                      i
                                                                                                                                      I
                                                                                                                                      l
    PROMOTION OF COMMUNITY INSTRUMENTS                                                                                                i
                                                                                                                                      >
    • STRENGTHENING THE TECHNOLOGICAL POTENTIAL OF SMEs                   2.90          2.50         3.10          3.50         12.CO !
                                                                        18.30         20.10         22.30        24.30          85.00
1 Includes consultation of Member States and trade associations (ex-item B5-324).
 ---pagebreak---                                           - 5 -
1.3  Indicative  schedule  of commitment       appropriations       (without   mini-budget)
     Preliminary                      Indicative planning
     draft budget
     for 1993
                              1994      1995        1996          1993-96
        18.30                   20.10     22.30       24.30       85 000
                                                            • • •
8.   ANTI-FRAUD MEASURES PLANNED IN THE PROPOSAL FOR THE OPERATION
Measures to be funded and services or studies performed are checked by the
Commission before payment, with due regard to contractual obligations and
the principles of economy and sound financial or general management.
Anti-fraud measures (checks, reporting, etc.) are included in all agreements
or contracts between the Commission and recipients of funds.
9.   ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
9.1  Assessment  and analysis     of     objectives
Quantification
The reader is referred to the table set out in point 7.2, which gives the
figures for the different types of measure (under both the old programme and
the proposed new one).
      speeding up the adjustment of SMEs to structural change (information
      for businesses, promotion, advertising, grants): 50%
      cooperation and partnership: 19.33%
      administrative, legal and        financial environment           which will benefit
      enterprises: 3.72%
      evaluation and development of enterprise policy: 6.78%.
 ---pagebreak---                                     - 6 -
9.2   Grounds for the   operation
As far as subsidiarity is concerned, all the action taken here by the
Community is such that it produces decisive added value, in particular as a
result of the size of networks and the scale of the measures developed, the
impartiality of decisions taken at the centre and the attention devoted to
regional balance.
This emerges clearly from the independent evaluation report and is stressed
in the explanatory memorandum.
Although Member States can themselves take a large proportion of the
measures to assist enterprises, it is for the Community to take the
cross-border measures, set up networks extending across the Community or
beyond and organize schemes for the exchange of experience or know-how
between financial institutions, chambers of commerce and craft and other
intermediaries, as well as actual businesses looking for cross-border
cooperation opportunities. Making such action a national preserve would not
only be impracticable and less effective, but would also create distortions
of competition since the level of support provided by each Member State
would vary widely (a number of host structures have, for example, decided to
close down their Euro-Info-Centre on the grounds that the burden on their
 finances was too heavy in comparison with the Commission's contribution).
                    i
The Commission ensures that all intermediaries and all businesses can
benefit from Community measures on an equal footing and in fair and
transparent conditions (as witnessed by the large number of calls for
proposals published in the Official Journal). It also sees to it that the
 added value deriving from the network effect and the know-how built up at
Community level are redistributed and made available to all interested
parties, including in the Community's less-favoured or outlying regions.
 9.2.1   Cost
 The Council decided on 18 June 1991 to revise the programme, adding an extra
 budget of ECU 25 million to the ECU 110 million already deemed necessary for
 the period 1990-93.
 The European Council, meeting in Edinburgh on 11-12 December 1992, "asked
 the Commission to accelerate the actions in favour of SMEs which have proven
 their worth at the Community level".
 Consequently, the strengthening of the priority measures for enterprise
 policy so as to stimulate growth in the Community is proposed for the period
 1993-96 and is based on the experience acquired during the previous
 programme. These assessment aspects are also raised in the evaluation
 report and in the Commission's comments on it.
 ---pagebreak---                                         - 7 -
The following details can be given on the various measures (the figures for
each old and new measure are given in the table in point 7.2):
-     information for businesses:
      1. development    of   the   EICs   to   facilitate   access to     Community
          information (stimulation, training, grants, databases);
-     development of partner-search networks:
          BRE and BC-Net: development of both networks within the Community
          and beyond; for BC-Net, implementation of a policy of specialization
          (particularly in innovation and technical cooperation) and a drive
          to raise the calibre of advisers (training) ahead of the generalized
          introduction of charges on 1 January 1993;
-     stepping    up    direct    contacts    between    businessmen    under   the
      Europartenariat,      Interprise     and     Promotion    of     Cross-Border
      Subcontracting programmes:
      1. partnership: intensification of the efforts to put businesses in
          direct contact with one another through Europartenariat, Interprise
          and similar international events;
      2. subcontracting: the programme, which was updated in the Commission's
          communication to the Council of January 1992, is aimed in particular
          at ensuring a business approach to the market and covers measures on
          communication    between   businesses,    certification    and   sectoral
          measures (electronics);
-      improvement of the administrative and legal environment of enterprises:
      administrative simplification and trade associations.
      Consultation of trade associations and support for stimulation measures
      and the dissemination of their information among the 8 million
      businesses they represent;
 -    promotion of Community instruments and strengthening the technological
      potential of SMEs.
 9.2.2 Spin-off effects
 Action under the above-(mentioned instruments and measures relates in
 particular both to improving the business environment and the supply of
 business information and to the search for and bringing together of partners
 with the specific aim of developing cross-border cooperation agreements.
 This is vital to the effective functioning of the single market, with regard
 to which enterprises must base their development strategy on goals that
 extend beyond the confines of their home country.
 ---pagebreak---                                      - 8 -
The main spin-off effect will thus be to make enterprises more competitive,
in particular through:
      greater    opportunities   for     businesses   to   Europeanize    and
      internationalize their operations;
-     development of the network effect;
-     lower costs, particularly for pilot schemes;
-     positive effects on growth and the economy in general;
-     positive effects on employment and the entire package of measures
      enabling SMEs to grasp the new opportunities offered by completion of
      the internal market and relations with third countries.
9.2.3 Multiplier effects
The planned measures graft a European dimension onto existing services
provided by national partners. Planned expenditure from the Community
budget will consequently generate considerable investment by public and
private partners, thus exerting a significant catalytic effect and bringing
about lasting structural change.
For example, Euro Info Centres are set up in conjunction with host
structures such as chambers of commerce offering information and advisory
services, to which the EICs add a European dimension.
Similarly, Europartenariat events are specifically aimed at developing
cooperation between businesses in Objective 1, 2 and 5(b) regions and
enterprises in other regions of the Community. Given that the Member State
concerned contributes one third of the budget for each event and the
participating firms meet their own travel and subsistence expenses, the
multiplier effect can be estimated at 300%.
Although it is desirable for the Commission to aim for a large multiplier
effect, this should not be the only deciding factor in the choice of its
 action. The limitations of such an approach are amply demonstrated by the
Commission's low level of financial support for the EIC network: a number of
 host structures have decided to close down their Euro-Info-Centre on the
 grounds that their share of the costs was too large and the Commission's too
 small.
 ---pagebreak---                                     _ 9 -
9.3   Evaluation
- Performance indicators selected:
Evaluation reports based on quantitative criteria (e.g. number of queries
answered, number of cooperation profiles generated) and matching the
instrument to the needs (e.g. level of detail of nomenclatures, quality of
documentation, targeting).
Results will be evaluated by regular monitoring based on in-house checks and
expert assessments by outside specialists where necessary.
The cost of many of the measures taken is very moderate in relation to the
market, as noted at certain points in the evaluation report.
Development of measures targeted to the different markets for business
information, cooperation and support.
-    Details and frequency of planned evaluation:
Annual evaluation on an institutional basis (annual report provided for by
Article 6 of the proposed Decision). This proposal is based on the
evaluation report submitted by outside experts and transmitted by the
Commission to the European Parliament and the Council in accordance with
Article 3 of the Council Decision of 18 June 1991.
 ---pagebreak---  ---pagebreak---                              FINANCIAL STATEMENT
1.  TITLE OF OPERATION
"The enterprise dimension - essential to Community growth".
A programme of measures designed to ensure the continuity of policy for
enterprise, and in particular SMEs, in the Community.
2.  BUDGET HEADING
Article B5-320.
3.  LEGAL BASIS
     Council Decision of 28 July 1989 (OJ No L 239, 16.8.1989, p. 33)
     Council resolution of 14 November 1989 (OJ No C 297, 25.11.1989, p. 2)
     Council Decision of 18 June 1991 (OJ No L 175, 4.7.1991, p. 32)
     Council resolution of 17 June 1992 (OJ No C 178, 15.7.1992, p. 8).
4.  DESCRIPTION OF OPERATION
The proposal for a Council Decision to which this financial statement
relates follows on from the Council resolution of 17 June 1992, in which the
Council recommended that the Commission should press ahead, in accordance
with the principle of subsidiarity, with developing the measures necessary
to create an environment favourable to the competitiveness of enterprises,
in particular SMEs, and to support their integration into the single market
after 1992. In framing this proposal, the Commission has drawn the
necessary conclusions from the first programme, covering the period 1990-93,
and from an evaluation report which it has transmitted to Parliament and the
Council. The report confirms the overall appropriateness of the enterprise
policy which the Community has carried out so far but makes proposals
concerning the direction of certain measures.
This measure therefore incorporates most of those developed under the first
programme, to which the necessary adjustments and improvements have been
made in order to ensure the continuity of policy for enterprise, and in
particular SMEs, in the Community.
4.1  Specific objectives of    operation
     to improve the business environment, remove administrative, legal, tax
      and financial barriers,                                   improve the
     productivity, competitiveness and adaptability of businesses, including
     distributive enterprises and SMEs, and facilitate the transfer of
     businesses;
 ---pagebreak---                                     - 2 -
-    to help SMEs adjust to structural change in the wake of completion of
     the internal market, for example through measures aimed, in particular,
     at growth sectors. These comprise measures relating to small firms and
     the craft industry, distributive enterprises, cooperatives, mutual
     societies and non-profit-making associations and foundations;
-    to promote a more favourable financial environment;
-    to monitor and evaluate enterprise policy, in particular    through the
     European observatory for SMEs, which links together bodies specializing
     in research on SMEs into a network with access to           statistical
     background, studies, publications and information given at seminars and
     conferences;
-    to carry out, before the end of the programme, an external evaluation
     additional to the ongoing internal evaluation which forms part of the
     programme.
4.2   Duration
1994-97.
4.3  Target    population
In theory, the above-mentioned measures could affect all SMEs in the
Community. In practice, however, the number of SMEs concerned by
cross-border measures will necessarily be smaller, reflecting the categories
of enterprises described in the explanatory memorandum.
The measures are also targeted at all those representing intermediaries
analogous to chambers of craft and those representing the wholesale and
retail trades, cooperatives, mutual societies and non-profit-making
associations and foundations. As many of the measures are implemented via
networks of intermediaries, the number of enterprises actually affected
cannot be precisely quantified.
5.  CLASSIFICATION OF EXPENDITURE OR REVENUE
Non-compulsory expenditure;  differentiated appropriations.
 ---pagebreak---                                     - 3 -
6.  TYPE OF EXPENDITURE OR REVENUE
-    Grants for joint financing with other sources in the public and/or
     private sector.
-    The funding of symposia, seminars and the like is to be granted up to a
     certain proportion of costs, determined in the light of the organizers'
     needs and the importance of the event for the sector in question
     (attainment of the above-mentioned objectives).
-    Preparatory or feasibility studies, evaluation reports, consultants.
7.  FINANCIAL IMPACT
7.1  Method of calculating total cost of the  operation
Experience in current and previous financial years shows that the demands on
the policy for SMEs have risen steeply. The Commission has had to reject
many of the projects submitted in response to various calls for proposals.
Although some of the projects were eliminated because they did not develop
the cross-border dimension sufficiently, a large number of highly promising
projects had to be rejected for want of funds. Although in certain cases
the Community contribution can be reduced according to the arrangements for
implementing the measure in order to finance as many projects as possible,
the fact remains that the Commission may well no longer be able to get
essential schemes off the ground if its financial contribution is no longer
sufficient to attract investments by its partners            (businesses or
intermediaries).
The volume of funding requested has to be seen in the context of the merger
of headings B5-320, B5-322 and B5-324 which the Commission has proposed in
the preliminary draft budget for 1993. Until such time as the 1993 budget
is definitively adopted, the figures for that year will remain purely
indicative.
 ---pagebreak---                                                                           4 •
7.2
1                                                    •• - - '
                                                                                                                                                   1
                                                                                                               •
|    Measures designed to ensure the continuity of policy
                                                              1    • -                                                  j
                                                                                                                              TOTAL
|    for enterprises 1994-97
                                                                1993        1994        1995      1996        1997          1994-1997
|A. MEASURES SPECIFICALLY TARGETED AT GROWTH AREAS:
|    - craft industry and small firms
|    - distributive enterprises                                      1.50        1.30        1.30      1.40        1.40               5.40
|    • cooperatives, mutual societies and                            2.00        2.00        2.00      2.10        2.10               8.20
|      non-profit-making associations and foundations
                                                                     0.00        0.20        0.20      0.20        0.30               0.90
IB. PROMOTING A MORE FAVOURABLE FINANCIAL ENVIRONMENT
                                                                                 0.20        0.20      0.20        0.30               0.90
|C. MONITORING AND EVALUATION OF POLICY
|    - European observatory for SMEs
|    - improving statistics on SMEs                                  1.20        1.30        1.40      1,40        1.50               5.60
|    - studies, publications, seminars and conferences               0.20        0.20       0,20       0.00        0.30               0.70
|    • evaluation of policy and existing schemes                     1.60        1.50       1.60       1.30        1.40               5.80
                                                                     0.00       0.00        0.00       0,50        0.00               0.50
                                                                                                                                 ...     . • . - . .
                                                                     6,50        6.70 '      6,90      7.10 |       ,,, I            28.00
                                                                                                                         1_                -
 ---pagebreak---                                              - 5 -
7.3      Indicative    schedule        of    commitment             appropriations    (excluding
mini-budget)
      Token entry
      Preliminary                         Indicative planning             TOTAL
      draft budget
      for 1993
                                  1994      1995       1996       1997
      6.50                           6.70      6.90       7.10 !'    7-30      28.00
8.    ANTI-FRAUD MEASURES PLANNED IN THE PROPOSAL FOR THE OPERATION
Measures to be funded and services or studies performed are checked by the
Commission before payment, with due regard to contractual obligations and
the principles of economy and sound financial or general management.
Anti-fraud measures (checks, reporting, etc.) are included in all agreements
or contracts between the Commission and recipients of funds.
9.    COST-EFFECTIVENESS ANALYSIS
9.1   Assessment     and analysis     of     objectives
Quantification
The reader is referred to the table set out in point 7.2, which gives the
figures for the different types of measure (under both the old programme and
the proposed new one).
For guidance,       some   of   the    appropriations      for   1992 were       broken  down    as
follows:
-      promoting a financial environment which will benefit enterprises; trade
       associations: 1.9%
-      evaluation and development of enterprise policy: 6.78%.
In addition to the above, there are the developments in the extensive fields
of the craft industry and small enterprises [5 million firms] and the
distributive trades [4 million firms] which are factors for the continuity
of policy for enterprise.
 ---pagebreak---                                     - 6 -
9.2  Grounds for  the   operation
As far as subsidiarity is concerned, all the action taken here by the
Community is such that it produces decisive added value, in particular as a
result of the size of networks and the scale of the measures developed, the
impartiality of decisions taken at the centre and the attention devoted to
regional balance.
This emerges clearly from the independent evaluation report.
Although Member States can themselves take a large proportion of the
measures to assist enterprises, it is for the Community to take the
cross-border measures, set up networks extending across the Community or
beyond and organize schemes for the exchange of experience or know-how
between financial institutions, chambers of commerce and craft and other
intermediaries, as well as actual businesses looking for cross-border
cooperation opportunities. Making such action a national preserve would not
only be impracticable and less effective, but would also create distortions
of competition since the level of support provided by each Member State
would vary widely.
The Commission ensures that all intermediaries and all businesses can
benefit from Community measures on an equal footing and in fair and
transparent conditions (as witnessed by the large number of calls for
proposals published in the Official Journal). It also sees to it that the
added value deriving from the network effect and the know-how built up at
Community level are redistributed and made available to all interested
parties, including in the Community's less-favoured or outlying regions.
9.2.1   Cost
Acting on a proposal from the Commission, the Council adopted on
28 July 1989 the multiannual programme to support the development of SMEs.
The Council decided on 18 June 1991 to revise the programme, adding an extra
budget of ECU 25 million to the ECU 110 million already deemed necessary for
the period 1990-93.
The new programme designed to ensure the continuity of policy for
enterprise, and in particular SMEs, in the Community is proposed for the
period 1994-97 and benefits from the experience gained during the previous
programme. These assessments are also mentioned in the evaluation report
 and covered by the Commission's comments thereon.
 ---pagebreak---                                      - 7 -
The following details can be given on the various measures (the figures to
each old and new measure are given in the table in point 7.2):
-    measures specifically targeted at growth areas:
     1.   craft industry and small firms:
          - support for the craft industry - implementation of measures in
            accordance with the Council guidelines of 18 June 1991;
     2.   distributive enterprises:
          - Europeanization of distribution structures and promotion of the>
            introduction of new technologies which will benefit SMEs and
            distributive enterprises;
     3.   cooperatives, mutual societies and non-profit-making associations
          and foundations;
-    promoting a more favourable financial environment;
-    monitoring and evaluation of policy:
     1.   European observatory for SMEs based on the networking of bodies
          specializing in the SME field and supported by statistical tools
          developed by the Statistical Office of the European Communities to
          supply the quantitative and qualitative data which firms need. The
          network will draw on a basis composed of studies, publications,
          seminars and conferences;
     2.   evaluation of policy and existing schemes.
 9.2.2 Spin-off effects
The main spin-off effect, in addition to continuity of policy, will be to
make enterprises more competitive, in particular through:
 -    greater    opportunities    for   businesses    to    Europeanize  and
      internationalize their operations;
     development of the network effect;
      lower costs, particularly for pilot schemes;
 -    positive effects on growth and the economy in general;
     positive effects on employment and the entire package of measures
     enabling SMEs to grasp the new opportunities offered by completion of
     the internal market and relations with non-member countries.
 ---pagebreak---                                     - 8 -
9.2.3 Multiplier effects
The planned measures graft a European dimension onto existing services
provided by national partners. Planned expenditure from the Community
budget will consequently generate considerable investment by public and
private partners, thus exerting a significant catalytic effect and bringing
about lasting structural change.
As far as measures    relating to the distributive trades are concerned,
experience in 1991    has shown that a contribution of some 25% by the
Commission suffices  to prompt the sector to put up the remainder of the
necessary finance.   The multiplier effect can thus easily be as high as
400%.
Although it is desirable for the Commission to aim for a large multiplier
effect, this should not be the only deciding factor in the choice of its
action. The limitations of such an approach are amply demonstrated by the
Commission's low level of financial support for the EIC network: a number
of host structures have decided to close down their Euro-Info-Centre on the
grounds that their share of the costs was too large and the Commission's
too small.
9.3    Evaluation
 - Performance indicators selected:
Results will be evaluated by regular monitoring based on in-house checks
and expert assessments by outside specialists where necessary.
The cost of many of the measures taken is very moderate in relation to the
market, as noted at certain points in the evaluation report.
 -   Details and frequency of planned evaluation:
Annual evaluation on an institutional basis (annual report provided for by
Article 6 of the proposed Decision). This proposal is based on the
 evaluation report submitted by outside experts and transmitted by the
 Commission to the European Parliament and the Council in accordance with
 Article 3 of the Council Decision of 18 June 1991.
 ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM (92) 470 final
                                                      DOCUMENTS
EN                                                                              10
                                 Catalogue number : CB-CO-92-585-EN-C
                                                             ISBN 92-77-50844-2
Office for Official Publications of the European Communities
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