CELEX: 51989PC0102
Language: en
Date: 1989-03-07
Title: Proposal for a COUNCIL DECISION relating to the improvement of the business environment and the promotion of the development of enterprises, in particular of small and medium sized enterprises, in the Community (presented by the Commission)

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COM (89) 102
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                            con ( 89 ) 102 final
                                                            Brussels , 7 March 1989
                             Proposai for a
                           COUNCIL DECISION
        relating to the improvement of the business environment
          and the promotion of the development of enterprises ,
  in particular of small and medium sized enterprises , in the Community
                   ( presented by the Commission )
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                                EXPLANATORY MEMORANDUM
 I.  INTRODUCTION
 The   business      environment     In   Europe    Is   changing     rapidly .    As    the
 programme for       the completion of       the   internal   market progresses ,        the
 process     of    European    Integration      is   proceeding     with    considerable
momentum . The Community has also taken fundamental political decisions
on the reform of agriculture , the expansion of the structural                      funds ,
 and on action relating to scientific and technological development , the
 environment , social conditions and the monetary system .
 All   of   these     policies    impinge    upon    the   enterprise     sector    to    an
 important degree . The creation of a common economic area will present
 European     firms with unprecedented opportunities ,             by enlarging       their
 home market and allowing them to specialise in areas where they have a
 comparative advantage .        However ,   to exploit      the opportunities fully ,
 firms must      adapt   in time to the changing conditions               In the single
 market and the related policy developments .
 Firms    will   adapt    most   smoothly     to   the   changing    conditions      In   an
 environment which allows enterprise to flourish .                 In order     to ensure
 such an environment ,       in which business can respond quickly to changes
 in market conditions ,        firms must not be subject to undue               legal    and
 administrative constraints .         In addition ,     they must be well         Informed
about and understand the changing circumstances , and have access to the
new   opportunities ;      small   businesses      in  particular     are   often     at   a
disadvantage in this respect .
Community      policy    towards    the    enterprise     sector ,   addressing      these
 issues , has developed rapidly in recent years . An Important series of
measures , mostly in pilot or experimental form , have already been taken
as a result of the 1986 Action Programme for SMEs and of Community
policies        In     related      areas .      The      Council      of     Ministers
 ---pagebreak---                                             - 2 -
 has provided broad political            support through Resolutions          in 1986 and
 1988 , the latter Resolution In particular requesting an acceleration of
 the      Implementation     of  the   policy .   The   Parliament    and   Economic    and
Social       Committee    have  both   called   for   more   intensive   action     In this
area .
The attached draft Decision represents the appropriate legal basis for
the continuation and extension of Community policy towards the business
environment        and   enterprise    development .    It   provides   the   medium-term
political commitment by the Council , thus ensuring financing from the
Community budget , for          a policy which has grown from a series of pilot
and preparatory measures to become an area of coherent and significant
Commun i ty act ion .
I I . DEVELOPMENT OF COMMUNITY ENTERPRISE POLICY
During the 1980 's , particularly In view of persistently high levels of
unemployment ,        economic   policy-makers      in   the   Member   States     and  the
Community       increasingly focussed attention on the operating conditions
for the enterprise sector . These considerations were reinforced by the
adoption of         the Single Act      and  the acceleration of         the process of
completing the internal market within which labour , capital and goods
would circulate without restriction .             It thus became Increasingly clear
that      the Community should develop a coherent              approach    in   Its action
affecting business and take account of the particular requirements of
smaller firms in adapting to the emerging European markets .
I I . A . SME Action Programme
From 1985 onwards , meetings of the European Council set out priority
areas      for   action    towards   business ,   and   the   Commission    responded    by
drawing up the Action Programme for Small and Medium-Sized Enterprises
( SMEs )^ 1 ), which was approved in a Council Reso l ut lon ^ 2 ) In November
1986 .      The   two   broad   objectives     of   the    Action   Programme     were   to
(1)      C0M(86)445
(2)      O.J. C 287 Of 14.11 . 86
 ---pagebreak---                                            - 3 -
 contribute to the creation of a favourable environment for business in
 the single market and to improve the flexibility of small business .
 Since   the approval         of  the programme ,   the Commission has      launched a
number of projects and legislative proposals to help meet the stated
objectives .       Examples of      these actions ,   which    have  been  set  out   in
specific Communications and In three periodic Commission reports on the
 implementation of the Action Programme ^) , are as follows :
 Improving the business environment
- development         of   the   system  for  assessing     the   business   impact  of
   proposed Community legislation
- analysis of existing Community legislation with regard to obligations
    imposed on business
- proposal for a company law directive concerning single-member private
    limited companies ^ 4 )
- proposal       to amend the fourth and seventh company            law directives to
   provide      for    greater    simplification    for   SMEs   with  regard   to  the
   drawing-up and the publication of annual accounts ^ 5 )
 Improving the adaptability of small business
- launching of          the pilot    phase of   the EURO     INFO CENTRE project     to
   provide information to business on Community matters , preparation of
   the extension phased
- launching of the Business Cooperation Network ( BC-NET ) project , to
   promote cross border cooperat lon ^ 7 )
- promotion of an experimental training scheme to prepare SMEs for 1992
- improvement         of    the   access  of   SMEs    to   Community    research   and
   development programmes and structural funds
- action to stimulate seed capital markets
( 3)   C0M(87)238 , C0M(88)64 , C0M(89 ) . . .
(4)    COM ( 88 ) 101
(5)    COM ( 88 ) 292
(6)    C0M(88)161 , COM ( 88 ) 693
(7)    C0M(88)162
 ---pagebreak---                                               4
 II . B. Development beyond the Action Programme
Many of the measures covered by the Action Programme have now developed
 to a point where , either by their nature or their dimension as a whole ,
 they go beyond the state of pilot or preparatory actions . Furthermore ,
 the Council ,      In  its June 1988 Resolution on " the         improvement of the
business      environment       and   action    to   promote    the   development   of
enterprises , especially SMEs , in the Commun I ty " ( 8 ) , gave new emphasis
to the achievement of these objectives and requested " the Commission ,
 in the light of the completion of the internal market , to accelerate
 its work on implementing all aspects of this policy ". This Resolution
drew largely on a Communication presented by the Commission In May 1988
entitled "An Enterprise Policy for the Commun i ty " ( 9 ) , which set out
clear objectives for Community policy towards business and established
guidelines to help define future Community action In this area .
It    is now therefore necessary to take the next step in the development
of Community enterprise policy by providing the appropriate legal basis
for the development of existing and complementary actions over the next
few years , as the need and urgency for firms to adapt to the single
market      increase .    The   proposed    Decision    would  provide    this  basis ,
allowing the Commission to undertake the medium-term administrative and
financial arrangements which are necessary for the implementation of
the policy .
III . LINKS WITH OTHER POLICIES
By Its nature , policy to Improve the business environment and promote
the development of enterprises Is closely related and complementary to
a wide range of other Community and national policies .                 In developing
the     enterprise     policy ,   the   Commission     has  ensured   the   systematic
coordination       of    the  various     projects    with   the   related   areas  of
Community policy and with associated action undertaken at Member State
 level .   It  is essential that such coordination continues In the future ,
and is even Intensified as the scope of the action expands .
(8)     O.J. C197 of 27.7.88
(9)     C0M(88 ) 241
 ---pagebreak---                                           5
The broad framework for Community enterprise policy is clearly set by
the completion of the Internal market , which is already exerting a
pervasive Influence on the European business environment and will                   lead
to major gains in business efficiency as the free movement of capital ,
 labour  and goods    is established .      Through   the strengthening of           the
enterprise   sector    and    reinforcement    of   the   application        of   market
principles , this policy area contributes to the Community 's growth and
employment strategy . At the same time , Community policy                In this area
recognises   the   Important     role of    the enterprise       In   the    fabric   of
society and the need for business development measures to be consistent
with other policy objectives In the social and environmental fields .
A particular role of Community policy towards business In the internal
market process is to ensure that the new rules and standards being set
up   are clearly understandable and understood by               firms ,   and do not
Impose undue constraints on them . Where the market mechanism falls to
guarantee   suitable     conditions     for    the   integration       process ,     for
Instance ,  if   there    is   an   Insufficient    flow   of    Information       about
Community or local     laws , regulations and technical standards , business
cooperation opportunities , etc . or Inadequate provision of training and
finance , action may need to be taken to help meet these requirements .
Where measures taken at national or regional             level are Inadequate or
inappropriate ,  there    Is scope for action at Community            level . Most of
the measures launched In the context of the SME Action Programme ( e.g.
the business impact assessment system , the EURO INFO CENTRES , BC-NET ,
training schemes ) help to complement the internal market process .
Similarly , Community policy towards enterprises ties               in closely with
the other policy areas highlighted by the Single Act as essential to
the creation of a common economic and social             area .   This    is   the case
with regard to the common policy for scientific and technological
development and the strengthening of economic and social cohesion ,
particularly through Community regional policy , where enterprises
themselves are often instrumental in the Implementation of the policy .
For example , the Action Programme Initiatives to promote cross-border
cooperation ( e.g. BC-NET ) are closely coordinated with and contribute
to , the Community programmes for research and development ( e.g. BRITE ,
ESPRIT ), Innovation , and
 ---pagebreak---                                            - 6
 technology     transfer     ( e.g.   SPRINT )    and    energy     ( e.g.    hydrocarbon
 technology ,      demonstration     programmes ),      which      invariably      Involve
cooperative projects .        The measures are also closely associated with
Community initiatives in the area of training , such as COMETT , and with
activities relating to the financing of                transnational        technological
cooperation between enterpr ises ^ 10 ^ , such as the Venture Consort and
Eurotech Capital projects .
With respect       to economic and social        cohesion ,     regional    policy since
1980    has   offered     provisions     directed     specifically        to   SMEs .  The
framework     regulation     adopted    in   the context of        the    reform of    the
structural funds underlines the priority to be given to Initiatives to
develop the endogenous potential of regions . This priority Is reflected
 in the new regulation concerning the European Regional Development Fund
through the explicit mention of support for activities of SMEs ,                         In
particular     through     support    for    services ,    financing      of   technology
transfer ,    Improving access to capital markets ,             Investment grants and
 Infrastructure projects of a limited nature .              In this context , several
of the projects covered by the Action Programme also include special
provisions for assisted regions ( e.g. Business and Innovation Centres ,
EUROPARTENAR I AT , seed capital ).
IV . MEASURES TO IMPROVE THE BUSINESS ENVIRONMENT AND TO PROMOTE THE
      DEVELOPMENT OF ENTERPRISES , ESPECIALLY SMEs
IV . A. Objectlves and baslc principies
The prime purpose of the proposed Decision Is the establishment of an
appropriate legal basis for the continuation and extension of measures
to improve the business environment and to promote the development of
enterprises , especially SMEs . The main objectives are as follows :
- to remove undue administrative , financial and legal constraints which
   hold back     the development      and creation of         small    and medium-sized
   enterpr I ses ;
( 10 ) See COM ( 88)114
 ---pagebreak---                                                 7 -
- to Inform and assist enterprises and In particular SMEs on national
  and Community policies , regulations and activities which concern or
  are likely to concern them ;
- to encourage cooperation and partnership between enterprises , In
  particular small and medium-sized enterprises from different regions
  of the Community .
The measures to be taken , which are                listed   In the next sub-section ,
represent      in  some     cases    the development     or   extension of     activities
already      launched      in  the context of       the SME     Action   Programme ;   the
additional      actions are those considered necessary                to complement    the
existing measures . All of the actions will be pursued in line with the
guidelines      established        in   the   June  1988   Resolution ,    which   are  as
fol lows   :
- the promotion of small and medium-sized enterprises must be achieved
  through a strengthening of market forces ;
- the cost to enterprises of compliance with Community legislation must
  be minimized and unnecessary regulations avoided ;
- existing      legislation should be reviewed with a view to appropriate
  s imp I if icat ion ;
- measures at Community level should not duplicate those at the level
  of the Member States ; they should , as far as possible , make use of
  existing structures and responsibilities rather than create new ones ;
- the    opportunities        for    small    and  medium-sized     enterprises    In  the
  Structural        Funds ,     in    the   Community 's   research     and   development
  programmes and in other Community programmes should be Increased ;
- at Community level specific services with a European dimension are of
   importance      to    small    and medium-sized enterprises ,         Inter   alia  the
  provision       of    Information      and   the  promotion    of   transfrontier    co¬
  operation       between     enterprises      and  with   other    private   and   public
  organ I sat ions ;
- at Community level the exchange of experiences from the various parts
  of the Community and the demonstration of concrete measures can help
  to improve the efficiency of programmes to support small and medium-
  sized enterprises ; the Commission will take up , develop and encourage
  these initiatives ;
- Community measures should be taken                 in close consultation with the
  social partners ;
                                                                                           Г
 ---pagebreak---                                             - 8 -
- the action should take account of               the variety of       Institutional    and
    cultural structures In the Community , which gives rise to different
    needs .
The Commission will          continue to consult extensively with             the Member
States      on   the   progress    of   the   policy .   In   particular ,   it   will   be
assisted by an advisory committee , composed of the representatives of
the Member States , which will give its opinion on the development and
 implementation of the measures .
 IV . B. The measures
 IV.B.1 . Removal of undue administrative and legal constraints on
            bus I ness
In thls area , the Commission wl I I
- strengthen the arrangements to ensure that new Community legislation
   does     not    Impose   undue    regulatory     and   administrative     burdens     on
    [ usiness , by Improving the procedures for preparing the assessment of
   the    Impact of proposed         legislation ,   and by ensuring       that ,   In the
   elaboration       of   proposed     legislation ,    the    interested   parties     are
   consulted for their opinions at the earliest possible stage ;
- examine existing Community legislation In broad areas of policy ,                       in
   consultation with the          Interested parties , so that         their effects on
   the     business      environment       can    be    fully      assessed    and     that
   recommendations        for   their     Improvement     can    be   submitted    to   the
   Comm I ss Ion ;
- ensure that arrangements are maintained with the Member States for
   exchanging       information     on   procedures     for    Improving   the    business
   environment and Identifying areas where Improvements can be achieved ;
   and encourage the Member States to maintain adequate arrangements to
   ensure that national          legislation facilitates the maintenance of a
   healthy     business     environment     and  that    these    arrangements     provide
   adequately for the consultation of business representatives .
 ---pagebreak---                                              - 9 -
 ! V. 8 . 2 . Provision of information and assistance to business
 The Commission 's action in this area will be closely coordinated with
 the Community         information policy and the policy aiming to create a
Community information services market . It will
- develop further its activities of preparing practical publications ,
    seminars , conferences , etc .         to bring to the attention of business
     ( particularly SMEs ) Community issues and policies which concern them
    or are      likely to concern them ;       this   Is of particular relevance        In
    making businesses aware of changes related to the completion of the
     Internal market ;
- benefitting from the experience gained during the pilot phase of the
    projects ,     Install     new Euro   Info Centres     ( to a maximum of     200 )  to
    provide precise practical           and rapid     Information and assistance        to
    SMEs throughout the Community ; develop the network of these Centres
    to improve the transfer of Information and expertise between Centres ;
    provide      thorough      training   for   the   Centres'    staff    in  Community
    regulations , programmes and other activities ; and develop appropriate
     instruments ( access to databases , factsheets , newsletters , etc .) to
     improve information flow on Community matters to the Centres ;
- on the basis of the experimental schemes approved by the Commission
     in   December     1988 ,   undertake   action   to prepare      SMEs  for  changing
    conditions       in   the    single  market ,   by   means   of    support  for    the
    development       of   strategic management       skills ,   for   analysis of     the
    sectoral and regional impact of the single market on SMEs and for the
    establishment of a network of institutes involved In such action ;                  in
    the light of experience these schemes may be modified or extended ;
    the schemes will          be pursued within      the Commission 's strategy        for
    adult training , also taking Into account the Ideas which will emerge
    from the social dialogue in which education and training have been
    accorded a high priority ;
- undertake        action     to ensure    that   SMEs  are    informed   of , and   have
    suitable access to , new technology ; In particular , it will support
    the participation of SMEs in the Community research and development
    programmes , for instance , through feasibility awards to help
    establish SMEs as potential partners for joint projects ; such action
   will continue to be closely coordinated with Community policy for
   scientific and technological development ;
 ---pagebreak---                                                  10 -
- undertake action to promote the access of SMEs to adequate financial
    resources , especially risk capital ; such action can include projects ,
    such     as   the stimulation of         seed capital      markets     in    the Community
    ( approved by the Commission In October 1988 ).
 IV . B. 3 . Encouragement of transnational cooperation and partnership
Action        In    this      area    will   be    implemented      largely       through     the
Commission 's         Business      Cooperation    Centre .   The   measures       will    be   In
accordance         with     the   Community 's    competition      policy .     They    will   be
 implemented         In   close    association with      the   Community       innovation     and
technology          policies .      They   will    continue      to   contribute         to   the
transnational           cooperation      necessary    for   Community     policies       towards
research        and     development ,     Innovation    and    technology       transfer .    The
Commission will
- complete the first phase of the Business Cooperation Network ( BC-NET )
   by mld-1990 ,         evaluate the results of          the first     phase and ,       In  the
   light       of     these      results    and    of    consultations        with      business
   representatives , develop the system accordingly ; at the same time the
   existing system of diffusion of cooperation opportunities will                              be
   modernised and further developed ;
- develop further its actions to promote transnational sub-contracting ,
   such as preparation of appropriate publications to Inform and assist
   business       In this area ,       the establishment of a European centre for
   sub-contract Ing ;
- continue         the     EUROPARTENAR I AT    project     and   extend      it    to   promote
   business cooperation between developed regions of the Community ;
- undertaken action             to promote     the access of       SMEs   to    third country
   markets ,      for     instance ,   by providing support         to the trading house
   infrastructure ,            and     explore     the     feasibility         of      extending
   transnational cooperation among SMEs to third countries on a mutually
   advantageous basis ;
- launch         other       pilot     and    demonstration       projects        to     promote
   transnational coopération .
 ---pagebreak---                                                 - 11 -
  IV . B. 4 . Evaluation and policy development
 The measures         listed above represent those which can be envisaged at
 present to implement the policy objectives with respect to the business
 environment        and enterprise development .           In the   light of      the yearly
evaluation        report ,    the Commission will ,        as appropriate ,      continue   to
apply these measures or modify them accordingly .                     In addition to the
evaluation of           existing measures ,       the Commission will        also undertake
research and studies to investigate appropriate complementary action .
 In order to Improve its understanding of the position and role of SMEs
 in the European economy , the Commission will continue ,                     in conjunction
with       the    Member     States ,     to    develop   a   statistical       databank   on
enterprises and to make available certain statistical data broken down
by     size    of    enterprise .    This     action   falls   within   the     framework  of
Community policy on statistics and the plan of priority actions in this
areadD .
V. BUDGETARY ASPECTS
The present proposal            provides for a financial         envelope of 135 MIoECU
over      the next four years of which 28.25 MioECU for                    the budget year
1990 . The Commission stresses the indicative character of these figures
which       will    have    to   be   established      definitively     in   the    budgetary
procedure on the advanced draft budget 1990 .                  In this context , It is to
be noted that for 1990 from the 10.7 MioECU additional expenditure put
forward ,       6   MioECU     are    due    to   commitments    already     taken    by  the
Commission        in   relation to the extension of           the  EURO- INFO-CENTRES and
BC-NET . This leaves 4.7 MioECU for the implementation of other actions
 launched by the Commission .
VI . CONCLUSION
This Communication is accompanied by a proposal for a Council Decision ,
the financial estimates for the measures covered by the proposal , and
an assessment of their              Impact on employment and competitiveness . The
Council is invited to adopt the attached proposal .
( 11 ) COM ( 88 ) 248 .
 ---pagebreak---                      PROPOSAL FOR A COUNCIL DECISION
         relating to the improvement of the business environment
           and the promotion of the development of enterprises ,
   in particular of small and medium sired enterprises , in the Community
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
and in particular Arti-cle 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 ,
Whereas on 3 November- 1986 the Counci l adopted a Resolution concerning the
action programme for SMEs and , on 30 -June 1988 , a Resolution on the impro¬
vement of the business environment and action to promote the development- of
enterprises , especially small and medium sized enterprises , in the Community ,
Whereas the Commission has submitted to the Council a communication on an
enterprise policy for the Community and the Community has already developed
certain initiatives in this field .
Whereas the development of a CormuYity enterprise policy based upon the
principle of effective competition is of great importance in increasing
the competitiveness of the economy ,       for employment growth and for
economic and social cohesion in the Community ,
Whereas it is necessary to strengthen this enterprise policy in the light of
the completion of the Internal Market and the other reforms resulting from
the Single European Act ,
Whereas the Treaty has not provided the necessary specific powers .
HAS DECIDED AS FOLLOWS :
 ---pagebreak---                                       2
                                                                              * 3
                                  Article 1
 In order to improve the business environment and the development of enterprises ,
 in particular of small and medium sized enterprises , measures shall be implemented
 at Community level .
                                  Article 2
The measures referred to in Article 1 shall include :
- removal of undue administrative , financial and legal constraints which hold
   back the development and creation of small and medium sized enterprises ;
- information and assistance to enterprises and in particular small and medium
    sized enterprises on national and Community policies , regulations and activi ¬
   ties which concern or are likely to concern them ;
- encouragement of cooperation and partnership between enterprises , in particular
   small and medium sized enterprises , from different regions of the Community .
                                  Article 3
In order to achieve the objectives mentioned in Articles 1 and 2 above , the
Commission will propose the necessary action to the extent that it cannot be
undertaken better at Member State level or taken into account better in the
framework of other Community policies .
                                  Article 4
Each year the Commission shall submit an evaluation report on the implementa ¬
tion of     this Decision t0 the European Parliament and to the Council .
                                  Article 5
The amount necessary for the implementation of this Decision will be
established annually in the budgetary procedure .
For the period from 1990 to 1993 the amount necessary is estimated at
135 Mio Ecus .
  Done at Brussels ,
                                                   For the Council
 ---pagebreak---                             BUSINESS IMPACT ASSESSMENT
1 .-What Is the main reason for Introducing the measure ?
     The main reason for the Decision Is to provide an appropriate legal
     basis for the continuation and extension of European Community
     policy on the Improvement of the business environment and the
     encouragement of enterprise development .
     Various pilot actions and preparatory measures have been taken by
     the European Commission as a result of the 1986 Action Programme
     for Small and Medium Sized Enterprises ( SMEs ) and subsequently
     extended by the 1988 Resolution on Enterprise Policy . The main alms
     of the pol Icy are :
         - to remove undue administrative and legal constraints which
         hold back the development and creation of small and medium
         s I zed enterpr I ses ;
         - to Inform and assist enterprises and In particular SMEs on
         National and Community policies , regulations and activities
         which concern or are likely to concern them ;
         - to encourage cooperation and partnership between enterprises .
          In particular of enterprises from different regions of the
         Commun 1 1 y .
     The Implementation of the Action Programme and Enterprise Policy
     have proved successful and the stage now has been reached where
     continued commitment and finance Is necessary for existing measures
     to be expanded upon and new initiatives to be taken .
2 .-Features of the businesses In question .
     Community Enterprise Policy relates to all businesses In that one
     of Its aims is to Improve the environment In which a I I business ,
     large and small , operate . They will thus continue to be affected by
     this Decision .
   -Are there many SMEs ?
     It Is hoped that SMEs In particular will profit from the Decision
     because many specific measures will continue to be taken to assist
     them In overcoming particular obstacles which they may face because
     of their size .
 ---pagebreak---                                        2
                                                                             ns
    -Are there any measures In regions which are eligible for regional
     a ici ?
      The Decision will allow the Programme to continue to address the
      extra problems of enterprises which are not only small but also are
      situated in one of the Community 's less developed regions . An
      example of this is the Europartenar lat scheme where a special
      effort is made to assist the development of business partnerships
      and cooperation agreements between businesses in the less developed
      regions and those in the rest of the Community .
3 . -What direct obligations does this measure Impose on business ?
      The Decision does not    impose obligations on business . Rather   its
      aim    is to continue to  Improve the environment  in which business
      operates and to improve the range of opportunities , particularly
      for small firms . For example , recent Innovations such as the seed
      capital scheme seek to assist the development of businesses at the
      very ear I lest stage .
4 . -What Indirect obligations are local authorities likely     to Impose on
     bus I nesses ?
      No additional obligations are likely to be imposed . The programme
      seeks to minimise obligations to those which are strictly
      necessary . One of the alms of the Commission 's    Impact Assessment
      System is to examine legislative proposals from the point of view
      of their likely impact on business and to seek to reduce any
      burdens which might be placed on business . Other examples of this
       include the aim of administrative simplification and the reduction
      of " form filling " and record keeping that is required by Community
      legislation . The Commission 's continuing efforts to codify amended
      legislation to simplify comprehension and compliance will also
      assist    in this .
5 . -Are there any special measures In respect of SMEs ?
      As noted above , many of the existing and envisaged measures are
      specifically directed at SMEs In recognition of the particular
      difficulties faced as a result of their size .
 ---pagebreak--- 6 . -What Is the likely effect on :
     - the compet I t I veness of business ?
       It is hoped that the Decision will allow the Programme to continue
       to help to Increase the competitiveness of the Community 's
      businesses by seeking to Improve the environment in which they
      operate and by consequently freeing resources from compliance with
      administrative requirements to be used for more directly productive
      purposes . It Is also hoped that such a move will Improve the
      competitiveness of the Community 's business when compared with
      business In third countries . On SMEs , It Is hoped that the various
      measures specifically aimed at SMEs will help to improve their
      ability   to     compete with   larger firms In the  enlarging  single
      market .
     -employment ?
      The   Impact    of   the  programme measures on employment  levels   is
      difficult to assess . The Implications for employment levels are
      good In that evidence points to the development and expansion of
      SMEs as resulting In considerable employment growth In the Member
      States .   The Council 's 1986 Resolution on Employment         Growth
      emphasizes the need to encourage the development of SMEs as a means
      of enlarging employment opportunities .
7 . -Have both sides of Industry been consulted ?
      Business has not been consulted specifically on the text of this
      Decision . However , the individual measures contained within the
      Policy - for example , the EURO-INFO Centres and BC NET - are the
      subject of extensive consultation with business people and their
      representatives as well as with experts from the Member States and
      will continue to make best use of Its consultation procedures . In
      addition , one of the measures covered by the Decision Is to
      examine existing Community legislation In broad policy areas ,       in
      consultation with the interested parties , so that their effects on
      the business environment          can be fully assessed and       that
      recommendations for their Improvement can be submitted to the
      Commission .
 ---pagebreak---                               FINANCIAL              FORM
 1 . BUDGET LINE
     B 777   : Activities to stimulate énterprises CSME )
2 . JURIDICAL BASIS
     Art . 235 .
3 . DESCRIPTION OF THE ACTIVITIES
     To improve the business environment and the development of enterprises , in
     particular SME's , by :
     - removal of undue administrative , financial and legal constraints which hold
       back the development and creation of small and medium sized undertakings ;
     - information and assistance to undertakings and in particular small and medium
       sized undertakings on national and Community policies , regulations and activi ¬
       ties which concern or are likely to concern them ;
     - encouragement of cooperation and partnership between undertakings , in particular
       of undertakings from different regions of the Community .
4 . JUSTIFICATION
     The basis of the Community 's enterprise policy was laid in 1986 with the adoption
     by the Council of a resolution on the Action Programme for Small and Medium Sized
     Enterprises . The broad objectives of this policy were further developed by the
     Commission in its Communication to the Council on an Enterprise Policy for the
     Community in June 1988 ( cf . doc . C0MC88 ) 241 final ). The different initiatives
     undertaken by the Commission in this field have now reached a stage where it
     has become necessary to create the appropriate legal basis in the form of a
     Council decision in order to allow a better implementation of the policy and to
     ensure its financing by the Community budget .
                                                                           ./.
                                                                                         4
 ---pagebreak---     5 . FINANCIAL IMPLICATIONS
         Total cost for the Community budget over the period 1990-1993 is about
         135 Mio Ecus .
                                                1990        1991          1992
1 . Removal of undue administra ¬
     tive , financial and legal
     constraints
2 . Information and assistance                  21.25        22.5         24
     to undertakings
3 . Encouragement of coopération                 5            6.25         9
     and partnership
4 . Evaluation and policy                        1.5          2            2.5
     development
                                             _28.25          31 . 75      36 - 5 ^
     6.   FINANCING
          Credits to be inscribed in the budget for the years 1990-1993 .
     7 . C0NTR0L
          Financial Control .
          Court of Auditors .