SME lobbies put new pressure on Commission for cash to create jobs

Date: 01/05/1997

By Tim Jones

LOBBIES representing small and medium-sized enterprises are campaigning for EU cash to fund job creation following the demise of the ELISE programme.

A proposal from Economics Commissioner Yves-Thibault de Silguy would have created a special 25-million-ecu fund to guarantee loans to SMEs worth up to 1 billion ecu. The ELISE scheme gave priority to firms with fewer than 50 employees and a cross-border perspective, and guaranteed loans according to number of staff hired.

But a group of finance ministers, led by those from Germany, the UK and the Netherlands, rejected the idea in October last year, not least because it would have required extra budgetary resources.

However, the European Association of Small and Medium-sized Enterprises (UEAPME), which represents 5 million EU businesses, has learnt that the Union is funding job-creation programmes outside its borders.

Hans-Werner Müller, secretary-general of UEAPME, has written to European Commission President Jacques Santer complaining that the Union has two such job-generating programmes, but these are aimed at SMEs in central and eastern Europe and the non-EU countries bordering the Mediterranean.

These schemes, dubbed JOPP for eastern Europe and ECIP in the Mediterranean, are run by the Directorate-General for external economic relations (DGI) rather than the departments responsible for small firms or finance.

In his letter, Müller protests that small companies within the Union “have no equivalent programmes” following the blocking of ELISE by finance ministers and insists that while it is admirable that others should be given such a helping hand, “charity begins at home”.

The Commission agrees with UEAPME that an equivalent scheme should be established for small EU firms, but it cannot win extra funding from ministers.

At the moment, it is relying on a special programme on growth and the environment run by the European Investment Fund to stimulate employment in the sector, but this concentrates specifically on environmentally-friendly projects.

A multi-annual SME financing programme for 1997-2000 was approved late last year, but without an added 40 million ecu being raised through a revision of the financial perspectives - an idea vetoed by Union heads of state and government in Florence last spring.

The SME associations had been hoping for a doubling of the funding to 220 million ecu from the 112 million ecu in the previous programme.

They have consistently criticised the Commission's SME programmes for taking insufficient account of the different types of businesses across the sector, ranging from small-scale skilled crafts to companies with more than 200 staff.

The latest differences over job funds again highlight the gaps in thinking between the Directorate-General responsible for SMEs (DGXXIII) and departments dealing with small firms abroad or with the whole of industry, DGI (external relations) and DGIII (industry), which are believed to be less sympathetic to the idea of coming up with a new version of ELISE.