Commission staff take a reality check

Officials responsible for enterprise policy have been thrown in at the deep-end, writes Herb Ladley.

Christian Rüss was flipping through a trade magazine when he learned about a programme to put European Commission bureaucrats to work in small businesses. "It sounded like a great idea," said Rüss, owner of a printing and book-binding firm. Sending Eurocrats to get their hands dirty in small businesses sounds as if it would make for good television, but it is the real-life goal of the European Commission’s ‘Enterprise Experience Programme’ which is in the process of shipping off all 350 administrators (A-grades) in the directorate-general for enterprise and industry for a reality check in a European small business.

Rüss sent an e-mail saying he was interested, triggering a barrage of phone calls and set-up interviews before his eventual assignment: Alexander von Witzleben, press officer for DG Enterprise, called to say he was coming. "It took a lot of people to get one man here - that’s how Brussels is," Rüss said.

"He wanted to know if he should wear a business suit," recalls Rüss, who told his new apprentice that life in the working world would be more casual. Upon arrival, Rüss wasted no time putting him to work. "I had him doing things that you can do without much training and he took his work seriously. Sometimes journalists would call and he wouldn’t be able to talk because he had to go load plates."

Located in a building dating from the 1730s, the print shop has been in the centre of Potsdam since 1910. Rüss took over the firm in 1980, after being forbidden to attend university by the East German regime. Small businesses with fewer than ten employees were the only private firms allowed in the German Democratic Republic. Today the firm employs 13 people and faces mountains of red tape in hiring more. As an entrepreneur under two regimes, Rüss said he could talk for two hours about his run-ins with bureaucratic obstacles to small business. He was surprised to find a sympathetic ear in his visitor from Brussels.

Von Witzleben took seriously the concerns of Rüss and his colleagues. "He has a printing machine that costs €800,000," said von Witzleben, relaying his experience at Druckerei Rüss, "but he cannot keep profits for more than two years without being subject to taxation. If he could save profits over 8-10 years for replacing the printing machine, he could avoid a vast amount of administrative burden with tax authorities, banks (for taking a loan) and public institutions for obtaining a subsidy for the purchase of a new machine, with this equalling the amount of tax he has to pay."

Von Witzleben learned about problems with labour courts, customers and former Stasi staffers in the chamber of handcrafts. "I remember putting together a press release on the problems facing small- and medium-sized enterprises…now I’ve seen it in reality."

Karin Krauss, a policy officer in DG Enterprise, landed at the pharmaceutical firm Montavit in Absam, Austria. A friendly Krauss put a human face on the Commission in a region that is "not so EU friendly". Workers "were amazed that such people work for the Commission", she said.

Until that point, Krauss’s experience had been with big pharmaceutical firms. "In a big corporation, one unit would be as strong as the whole company," she said of her first experience working in a small company, remarking that workers at Montavit "don’t split tasks". Zacharias Bilalis, a policy officer in DG Enterprise, was also multi-tasking in SMEs during a week at Alpha-Boards, a small family-owned circuit-board manufacturer in Berlin.

"In big companies you have predefined functions," he said, but in small firms, "everybody must do everything", from developing a product, to contacting suppliers, to sales. Bialis visited a few of the firm’s sub-contractors and customers across Germany.

Without the huge pools of specialised resources, Krauss learned why regulations that adversely affect SMEs often go unnoticed. "In a big company they would give it to the legal department," but for SMEs, because of the huge relative costs in disputing a new rule "a lot of complaints are swallowed". The lesson for her was that SMEs need stability in regulation and national governments need to think hard about red tape that limits the mobility of SMEs more than large firms. She pointed to differing national requirements for packaging, labelling and volume of medicines as obstacles to SMEs. "All of those things add up," she said.

"We’re at the end of the chain," said Rüss, explaining why some small business owners do not know how rules drawn up in Brussels affect them, as EU directives filter down into national regulations. But perhaps in future those at the other end of the legislative chain will have some idea what is going on on the ground.

Officials responsible for enterprise policy have been thrown in at the deep-end, writes Herb Ladley.

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