SMEs await decision on reallocation of funding

Date: 21/03/1996

SMALL and medium-sized enterprises are the latest sector of the economy to join the battle between the European Commission and member states over a reallocation of budgetary spending.

Industry ministers will have to decide at their next meeting on 28 March whether to add an extra 68 million ecu to the EU's support programme for SMEs for 1997-2000, of which 40 million ecu would come from a revision of the financial perspectives.

SMEs are already disappointed at this proposed 60&percent; increase in the budget, since they had been led to believe that a doubling of their allocation - to around 220 million ecu from the 112 million ecu in the previous programme - was on the cards.

“We don't wish to be ungrateful. It is good that it has been raised, but we wish it had been more,” said a spokesman for the German SME organisation ZDH.

The SME organisations also criticise the proposals in specific areas, suggesting that they fail to take sufficient account of the range of firms across the SME sector.

They want the programme to put special emphasis on the skilled-craft sector since jobs in this area are growing even more quickly than in the rest of the SME sector as a whole.

The action programme should be targeted to take into account the special needs of this end of the SME market, instead of applying indiscriminately to firms from those with fewer than nine employees right up to those with 250 staff. They say this should also be borne in mind when the cash allocations are being made for the Euro Info Centre (EIC) network.

These centres began operations six years ago and have developed into a pan-European network of 238 offices, aiming to help SMEs with information on developing products for export and how to attract state or EU funds for research and development.

While the Commission only pays 20&percent; of the running costs of the EICs, with the rest coming from local chambers of commerce or municipal councils, the scheme still swallows up nearly a quarter of the overall programme's current 112-million-ecu budget.

The SME organisations oppose a boosting of the scheme, saying that while every major city in the EU has an EIC, they are not well-known enough to be the first port of call for an SME needing information.

Even the last independent evaluation report on the progress made in the programme concluded: “The EIC network has not achieved a material impact in the business community. In addition, the quality of service throughout the EIC network is not sufficiently of a uniformly high standard and the active recognition of EICs by SMEs remains low.”

An official at UEAPME, the European SME lobby group, said: “For most small businesses, the first people they go to when they need help are their accountants and lawyers. Larger businesses of 50 staff or more will go to the EICs, and the big firms will have their own staff. Micro enterprises do not have the time to use them.”

The SME organisations (inevitably) believe they are best equipped to help small firms and say they provide recognised information and advice services and a genuine 'first stop shop' for businesses seeking advice.