Commission plans business act to boost SMEs

The European Commission is planning to propose a small business act in 2008 in order to do more to address the concerns of small- and medium-sized enterprises (SMEs) in the EU.

The plan to launch a new initiative for SMEs is contained in the Commission’s paper on giving new impetus to the internal market entitled ‘A Single Market for 21st Century Europe’, which is to be published on 13 November.

The paper says that SMEs need special attention in the single market and that the small business act could "provide guidelines and set out provisions tailored for SMEs".

This would involve drawing together different existing provisions for small businesses in various policies and laws with the aim of reducing administrative burdens for SMEs, increasing their participation in EU programmes, increasing their share in public procurement and improving access to standardisation and reducing obstacles to cross-border trade.

The Commission also pledges to look at how taxation polices and practices affect SME growth and promises to propose a European company statute to help SMEs’ cross-border activities. This would be the equivalent for SMEs of the European company statute, adopted in 2001, which allows firms with business in different member states to merge, form a holding company or joint subsidiary while avoiding the constraints arising from the existence of different legal systems.

But the body representing SMEs at EU level said that the planned act should have some legal force if it is to make a difference to small businesses.

Gerhard Huemer, a director at SMEs association UEAPME, said: "There’s a risk it could be a boring, non-binding communication." It should be more binding and EU member states should endorse it and commit themselves to carrying out its aims, Huemer said.

UEAPME supported the idea of a small business act but, he said, there was a danger if the initiative concerned only the policy areas currently under Günter Verheugen, the enterprise and industry commissioner. The act should be "all encompassing", he said, dealing also with issues such as taxation and trade policy.

The small business act is a priority for Nicolas Sarkozy, the president of France, which takes over the presidency of the EU in the second half of next year. Huemer said that the small business act was a "gift from [European Commission President José Manuel] Barroso to Sarkozy".

The main elements of the Commission’s planned communication on the single market are to deliver better results for citizens and small businesses, to take more advantage of globalisation to bring more benefits to EU citizens, to do more to foster knowledge- and technology-intensive goods and services, and to improve the social and environmental dimension by helping people take advantage of market opening and help them adjust to change such as industrial restructuring.

The European Commission is planning to propose a small business act in 2008 in order to do more to address the concerns of small- and medium-sized enterprises (SMEs) in the EU.