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Small enterprises at the forefront in restoring growth

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The SME Envoys met in Brussels to shape a strategy aimed at freeing the growth potential and competitiveness of SMEs.

Key elements agreed are: making it possible to start a company in 3 days for less than €100, increasing access to finance and public procurement and reducing bureaucracy, including by introducing an SME-friendly test for all new legislation at EU and Member State level. For this purpose, the European Commission and all Member States should introduce a specific SME test before any legislation is adopted. The test should ensure that no new obstacles arise that could hamper the smooth running of Europe’s 25 million small businesses. Twelve countries have already made the SME test a reality, and several more are in the process of introducing it. The SME Envoys agreed to implement the above measures in all Member States by September 2012. With these measures Europe is actively strengthening the position of SMEs, which are widely viewed as critical to restoring economic growth.

Background

The national SME Envoys today presented the progress in the national implementation of the Small Business Act for Europe (IP/11/218) and agreed an ambitious action plan at their first meeting in Brussels with Daniel Calleja, the EU SME Envoy. Earlier this year, each EU country appointed an SME Envoy to promote for the interests of small business and ensure that SME interests are not neglected (IP/11/642). There was consensus among SME Envoys and the representatives of the small business community that action over the next 12 months needs to focus on three concrete areas:

Simplifying the business environment and encouraging people to take up the challenge of becoming an entrepreneur. The SME Envoys signed up to the target of making it possible in all Member States to start a business in 3 days at a cost of no more than €100.

Improving SMEs' access to finance through measures to increase the availability and use of bank loan guarantees for SMEs, together with micro-credit for start-ups and micro companies in particular. In the current situation, access to finance is the most pressing problem for SMEs. Furthermore, it is necessary to increase SMEs' participation in public procurement contracts. The latest research shows that SMEs secure only 34% of public procurement advertised EU-wide despite their share to the wider economy being 52%.

Ensuring systematically that new legislation will duly take into account the potential implications for SMEs by means of an SME Test, at both European and national level. Alongside the SME Envoys, the SME Test is the second building block of the European Commission’s new governance plan for SMEs.

The SME Test already a reality in almost half of the EU

The SME Test, which is a vital component of the 'Think Small First' principle, was first laid down in the Small Business Act (SBA) for Europe adopted in 2008. In 2011, with the publication of the SBA Review, the role of the SME Test was further strengthened.

Slightly less than half of all EU Member States report that they already apply the SME Test. Malta, Slovenia and the Slovak Republic are in the process of introducing it. Four other Member States - Greece, Belgium, Cyprus and Bulgaria - are currently discussing its introduction, while other countries most often take into account the interests of SMEs in regulatory impact assessments despite not having introduced a formal SME test.

For instance, Austria has developed a special methodology, including a specific internet tool, which will become obligatory as from 2013. In the Slovak Republic, the SME test is part of all new legislation, and Malta recently drafted a law requiring all proposed legislation to undergo an SME test (as from early 2012) if it is established that the proposal has a potential impact on micro and small businesses. Finally, Finland is examining different ways of evaluating the impact of regulation on small businesses in order to put in place an improved SME test.

Most Member States find that the SME Test – introduced in 2008 - has real added value for SMEs in their countries, according to a recent survey conducted by the European Commission. In particular, Member States stress that the SME Test gives small enterprises time to adapt their businesses to new legislation, thus saving money. In addition, the SME Test contributes to avoiding legislation which could lead to a disproportionate burden on enterprises. It also renders the potential impacts of new proposals on SMEs clearer and mitigating measures easier to identify.

For more information on the SME Test, see MEMO/11/601

 

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