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EU gives top priority to helping SMEs create jobs

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Small and medium-sized enterprises (SMEs) are Europe’s job engine. Today, 85% of net new jobs in the EU’s private sector are created by SMEs. Thus, the EU has developed a number of concrete actions to promote a better economic environment for the 21 million SMEs in the EU, and support their efforts for creating new jobs.

Support for SMEs to find capital

The European Commission helps SMEs find necessary funds for their development through a loan guarantee scheme under the Competitiveness and Innovation Framework Programme (CIP, 2007-13). The scheme has already supported more than 200 000 SMEs with a loan volume exceeding €12.5 billion.

With its risk capital for innovative and high-growth SMEs initiative, the Commission has also provided more than €2.2 billion in equity investments to some 250 innovative and high-growth companies.

The new financial programming period foresees extended financial support through a specific programme dedicated to small companies (COSME), which will run from 2014 to 2020, with a planned budget of €2.5bn. In addition, funding for SMEs under the research programme HORIZON 2020 will be increased.

Access to finance: http://ec.europa.eu/enterprise/policies/finance/index_en.htm

Developing alternatives to bank financing

The European Commission also seeks to develop a framework for efficient, diversified and improved long-term financing for SMEs by helping to attract more private investments.

  • European venture capital passport: The proposal for a ‘European Venture Capital Funds’ will facilitate cross-border fundraising and create a genuine internal market for VC funds.
  • Improving SME access to capital markets: Two recent proposals are currently being discussed to attract investors through more visible SME markets and more visible listed SMEs:
    • A proposal for the Markets in Financial InstrumentsDirective (MiFID) to sustain the development of stock markets specialised in SMEs.
    • A proposal for a modification of the Transparency Directive to give better information on listed SMEs.

The SME Finance Forum is a permanent forum to monitor the market situation and encourage new approaches to improve access to finance for SMEs.

Less legislative burden for SMEs

The Commission wants to simplify life for SMEs by easing burdensome EU laws. Thus, the EC carried out a broad consultation in which roughly 1 000 SMEs and business organisations identified the top 10 most burdensome EU laws.

The results indicate that SMEs see the biggest difficulties and costs coming from rules originating in REACH chemical legislation, value added tax, product safety, recognition of professional qualifications, data protection, waste legislation, labour market-related legislation, recording equipment for road transport, public procurement and the modernised customs code.

The results of this consultation are being put to good use. The European Commission has already adopted the review of REACH, which reduced the fees paid by SMEs.

The network of SME Envoys will actively follow-up the TOP 10 results and make administrative burden reduction a priority in Member States.

Moreover, the Commission has given priority to reduce the administrative burden for SMEs – the ‘Think Small First’ principle. Namely, it works closely with Member States to ensure that time delays and costs for creating a new company are reduced, and to assess avenues to facilitate better market access both within the EU and in third countries.

Enterprise European Network

The Enterprise European Network (EEN) is helping SMEs tap into the internal market and key international markets. An EU-funded business and innovation support network, the EEN includes nearly 600 local organisations in 55 countries. The EEN gives a unique opportunity for EU SMEs to find business and technology partners and to be present in high growth markets.

SMEs to benefit from emerging markets

Because the markets with the biggest growth potential are outside the EU, the Commission promotes internationalisation through ‘Missions for Growth.’ These missions are open to all European companies and business associations. They target neighbourhood countries but also major ‘emerging markets’ like China, Russia, Southeast Asia and Latin America.

The European Commission is also conducting a number of SME dialogues with our foreign partners to create a business-friendly environment abroad, eliminate non-tariff barriers, approximate standards and strengthen the rule of law. These steps are vital to give SMEs the confidence to invest and do business abroad (see E&I 15, page 3).

New markets’ environment

The Commission finances EU business centres that advise SMEs on how to invest and seize business opportunities in China, India and Thailand. They are complemented by services providing advice to SMEs on protection of intellectual property.

Moreover, the Europe-China Standards Information Platform (CESIP) is providing valuable, bilingual information to Chinese and European businesses on market issues ranging from technical regulations to market access requirements.

Similar activities are taking place with the United States of America, our main trade partner. Specific areas for cooperation are being set up, such as the promotion of SME events and business partnering activities, participation in sector-specific or thematic seminars and the exchange of information on SME networking opportunities. As preparations are currently under way to launch negotiations for a Transatlantic Trade and Investment Partnership between the EU and the US, additional opportunities may arise in this context to strengthen cooperation on trade-related aspects relevant to our SMEs.

Avoiding technical barriers to trade

Last but not least, a specific dialogue with European businesses is in place to implement the Technical Barriers to Trade (TBT) Agreement. It includes a notification system that warns European businesses about potential new regulations, facilitating global harmonisation and mutual recognition between Members States and third countries.

EU SME Envoy Daniel Calleja: ‘The public consultation on the most burdensome EU legislative acts was an extremely useful exercise as industry (in particular SMEs) and business associations have indicated areas where further simplification is needed. We should use every opportunity to cut down the red tape as soon as possible and ensure that unnecessary regulatory burden does not henceforth create obstacles to the growth and competitiveness of EU SMEs.’

Contact

More information available online at:

Enterprise Europe Network

http://een.ec.europa.eu/

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