This report examines the Small Business Act for Europe (2008), which was adopted by the European Commission and endorsed by the Council of the European Union during the "Great Recession" of 2008-2009. The recession affected many nations across the world, and it hit many European countries particularly hard. For example, in 2009 the United States experienced a 2.8% decline in real gross domestic product (GDP). The European Union (EU) as a whole experienced a 4.4% decline, and nine of its then-27 member states experienced a decline in real GDP exceeding 6% (Estonia, Finland, Hungry, Iceland, Ireland, Latvia, Lithuania, Romania, and Slovenia). Reflecting the economic challenges facing Europe at that time, the European Commission declared in the Small Business Act for Europe's introduction that Managing the transition towards a knowledge-based economy is the key challenge for the EU today. Success will ensure a competitive and dynamic economy with more and better jobs and a higher level of social cohesion. Dynamic entrepreneurs are particularly well placed to reap opportunities from globalisation and from the acceleration of technological change. Our capacity to build on the growth and innovation potential of small and medium-sized enterprises (SMEs) will therefore be decisive for the future prosperity of the EU. In a globally changing landscape characterised by continuous structural changes and enhanced competitive pressures, the role of SMEs in our society has become even more important as providers of employment opportunities and key players for the wellbeing of local and regional communities. Vibrant SMEs will make Europe more robust to stand against the uncertainty thrown up in the globalised world of today. Since then, the EU's economy as a whole has grown, but more slowly than that of the United States. For example, the EU's average unemployment rate in 2016 is nearly twice that of the United States (8.9% versus 4.8%). Moreover, the extent of the economic recovery varies considerably within the EU, with some nations still contracting or experiencing very high levels of unemployment. For example, Greece's and Spain's unemployment rates in June 2016 were 23.3% and 19.9% respectively. Overall, the EU's economy is somewhat smaller than the United States' economy (EU's GDP is $14,861 billion whereas the U.S.'s GDP is $18,628 billion). The EU also has fewer businesses (about 22 million) than the United States (about 29 million). This report opens with a discussion of the European Commission's decision to recommend the use of a size standard that is very different than the size standard used in the United States. It then examines the Small Business Act for Europe's various provisions and the major programs the European Commission has implemented to achieve the act's objectives. Next, it compares and contrasts the European and American approaches to assisting small- and medium-sized businesses. This report provides information and analysis useful to Congress as it crafts small business policy for the United States. During the 1980s, there was growing consensus in Europe that providing financial and technical assistance to small- and medium-sized enterprises (SMEs) would help to ensure competitive markets and contribute to economic growth and job creation. There was also general agreement that SMEs often had a difficult time accessing capital for a host of reasons (such as the business was relatively new or the owner did not have sufficient collateral). As a result, many European nations and financial institutions, including the European Investment Bank and European Investment Fund, implemented programs and policies to assist SMEs. They each also crafted their own size standard definitions to determine which businesses would qualify for assistance reserved for SMEs. In March 1985, the EU's Council of Ministers indicated its support of policies designed to assist SMEs as a means to create jobs and promote economic growth. In response, the European Commission established a task force in June 1986 to examine the commission's relevant activities (community laws, financing programs, etc. ); assist "in the harmonization of national and community policies;" establish "a system for association with organizations representing SMEs;" and recommend "structures and programmes, at the European level, for solving SMEs' practical problems and, in particular, developing communications and training strategies for SMEs." Later that year, as part of its effort to reduce barriers in the creation of a single, unified market within the EU and to assist in the "harmonization of national and community policies," the European Commission proposed, and the Council of Ministers adopted, the Action Programme for SMEs . It was designed to assist SMEs by encouraging the spirit of enterprise; improving the administrative environment; monitoring the completion of the Internal Market with a view to helping SMEs (i.e. removal of physical, technical and legal barriers and giving SMEs real access to public procurement contracts); adapting company law (i.e. the European Economic Interest Grouping framework); creating a sound competitive structure; creating a favourable tax environment; and improving the social environment of SMEs by involving SME cooperatives at the planning stage. One of the more noteworthy actions arising from the Action Programme for SMEs was imposing a requirement that impact assessments of proposed legislation and policies under consideration by the European Commission and the Council of Ministers take into account the needs of business, especially the needs of SMEs. On July 28, 1989, the European Commission reaffirmed its commitment to assisting SMEs, emphasizing "the removal of undue administrative, financial and legal constraints which check the development and creation of enterprises, and in particular SMEs." As part of its continuing effort to address legal constraints on SMEs, the commission inventoried its member state's SME definitions and found wide differences in the definitions used. On May 28, 1992, the commission proposed "limiting the proliferation of definitions used" by its member states to determine SME status. It recommended a single, EU-wide size standard based on four criteria: (1) number of persons employed, (2) turnover (revenue), (3) balance sheet-total and (4) independence (to ensure that the small business is not controlled by a large business or jointly controlled by several large businesses). The European Commission solicited input from its member states, interested organizations, and financial institutions as it determined the specific thresholds to be used for each of the criteria. As a starting point, its initially recommended employment thresholds of 50 employees and 250 employees for small- and for medium-sized enterprises, respectively. On April 3, 1996, the European Commission approved an official, EU-wide recommended definition for SMEs, formally recognizing SMEs as a distinct category of businesses in Europe. The commission indicated that it took this action to "improve the consistency and effectiveness of policies targeting SMEs," and "limit the risk of distortion of competition" among its members. Although member states are not required to adopt the European Commission's definition, all of them "make use of it, sometimes exclusively and in other cases in parallel to and complementing national definitions." The thresholds are "to be regarded as ceilings." The formal EU-wide recommended definition for SMEs was updated in 2005 to account for inflation and to include a new micro enterprise category (see Table 1 ). About 99.8% of all EU businesses qualify as a SME (about 92.7% qualify as a micro business, 6.1% as a small business, and 1.0% as a medium-sized business). In comparison, about 98% of all American businesses qualify as small under the U.S. Small Business Administration's (SBA) size standards; and about 99.7% of all employer firms in the United States have 500 or fewer employees (the small business size standard typically used for research purposes). Over the next several years, the European Commission enacted policies to reduce regulatory burdens on SMEs and increase "the SME focus in major EU support programs." In 2008, the European Commission declared that it was time to "cement the needs of SMEs in the forefront of the EU's policy" and to make "the EU a world-class environment for SMEs" by adopting a Small Business Act for Europe. The Small Business Act for Europe is not an act, per se, as understood in the United States. It is a European Commission initiative, endorsed by the Council of the European Union, which provides 10 "guiding principles" for its own policies, and those of its member states. As mentioned previously, it states in its introduction that it is based on the premise that "vibrant SMEs will make Europe more robust to stand against the uncertainty thrown up in the globalised world of today." It later mentions that The symbolic name of an "Act" given to this initiative underlines the political will to recognise the central role of SMEs in the EU economy and to put in place for the first time a comprehensive policy framework for the EU and its Member states through a set of 10 principles to guide the conception and implementation of policies both at EU and Member State level. The Small Business Act for Europe established the following guiding principles: 1. Create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded. 2. Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance. 3. Design rules according to the "Think Small First" principle. 4. Make public administrations responsive to SMEs' needs. 5. Adapt public policy tools to SME needs: facilitate SMEs' participation in public procurement and better use State Aid possibilities for SMEs. 6. Facilitate SMEs' access to finance and develop a legal and business environment supportive to timely payments in commercial transactions. 7. Help SMEs to benefit more from the opportunities offered by the Single Market. 8. Promote the upgrading of skills in SMEs and all forms of innovation. 9. Enable SMEs to turn environmental challenges into opportunities. 10.