SMEs demand a voice in the social dialogue

Date: 30/11/1995

By Michael Mann

THE EU's much-vaunted social dialogue faces collapse unless the views of small and medium-sized enterprises (SMEs) are taken properly into account.

The warning comes from Hans-Werner Müller, secretary-general of the European Association of Small and Medium-sized Enterprises (UEAPME), which represents some five million EU businesses with over 20 million employees.

Despite his outwardly jovial manner, Müller's message to the social partners and the European Commission is unmistakably tough. The recent deal negotiated by the social partners on parental leave is not, he insists, acceptable to his association.

“We did not participate in the process, so even if the deal is declared as law, for us it does not exist. In any case, the results of the negotiation we were able to glean from the newspapers are not acceptable. But it's a question of principle anyway. We were never consulted by UNICE (the EU employers' federation) at any stage,” claims Müller.

“We will have a big legal conflict over parental leave, which could see the social dialogue as conceived in the Social Protocol falling apart. Perhaps we will have a law which millions of enterprises do not accept,” he warned.

The next topic likely to be placed before the social partners for consultation would have just as far-reaching consequences for SMEs, Müller insisted, in the curious mixture of English, French and German he tends to speak. Although highly entertaining, Müller's style cannot hide the steely character underneath.

“When we come to discuss part-time work, I cannot imagine how we could be excluded from such a tremendously important programme,” he stressed, warning that there would be “a real conflict” if UEAPME chose not to accept a deal on part-time work.

Müller accuses the Commission of hypocrisy, pointing to the clear undertaking in the Social Protocol to allow SMEs full participation in the social dialogue, and alleging a complete failure to back up these intentions in practice.

“The Commission says it cannot force UNICE and the ETUC (European Trade Union Confederation) to admit us to the negotiating table. We say that this is hypocrisy, that the Commission does all that is necessary to maintain exclusivity. The Commission even pays for them to attend meetings.”

This hypocrisy is further underlined, he claims, by Commission funding for the new Centre for European Industrial Relations in Florence, from which SMEs remain effectively excluded.

Müller believes that inclusion in Florence is the key to involvement in other crucial consultative committees in Brussels. He recounts a lengthy tale of intrigue involved in securing UEAPME a seat on the 'Leonardo' vocational training committee. Even though it won that battle, the organisation and the five million enterprises it represents enjoy no more say than the principality of Liechtenstein, claims Müller.

Similar problems have been faced in attempting to set up the so-called 'Coopme' programmes to help SMEs in the applicant countries of Central and Eastern Europe. “DGI (the Directorate-General responsible for external relations) says that education in social programmes in the east is the responsibility of UNICE alone.”

Müller refutes claims by UNICE that it represents the interests of SMEs, claiming that a body which lobbies on behalf of major corporations cannot possibly have an appreciation of the concerns of small entrepreneurs.

His choice of example points clearly to his background. He spent 20 years as a Christian Democrat member of the German Bundestag and three years in the European Parliament, and says: “We are not represented by UNICE at all. The problems of a baker in London are not the same as those for Mercedes in Stuttgart. It's like the People's Party in the Parliament offering to do the Liberals' work for them in the budget committee.”

All his organisation is looking for, Müller maintains, is the same “freedom of coalition” that its members enjoy in their own countries.

Müller is undoubtedly well-connected, the kind of man who could never be forgotten by anyone who had met him, even briefly. He gladly shows off a 20-year-old photograph of himself and “Mon cher Jacques” Santer, now president of the European Commission, from their time together in the European Parliament.

But his connections are yet to pay off in concrete results for UEAPME, despite regular contacts with the Santer Cabinet and letters to Social Affairs Commissioner Pádraig Flynn requesting action. Yet Müller appears to relish the challenge ahead.

UEAPME's largest members, the French and German federations, have this month stepped up the pressure on the Commission after being excluded from the parental leave talks. France's UPA claims that SMEs make up 93.3&percent; of European companies.

Aside from the social dialogue, Müller believes that the single most important issue facing SMEs in the future is to ensure sufficient and reliable access to finance. UEAPME is lobbying hard to improve relations between banks and small businesses, and build on the tools for doing this - particularly guarantee-banks and joint ventures.

Although nothing has been finalised yet, the organisation is confident of the establishment of what is being called EASDAQ, the European capital market for entrepreneurial companies, to ease small companies' access to capital. Müller points to the success of NASDAQ in the US as an example of good practice.

Although the European Investment Bank is making large amounts of money available to assist small businesses, Müller claims that its worth is diminished because it is distributed “through 100 very strong European banks” rather than smaller operations with closer links to SMEs. Many finance houses still have “psychological problems” in lending to small business, he claims.

A report prepared by UEAPME in conjunction with the Commission for the December summit in Madrid will reflect the organisation's concerns on access to finance as well as the administrative burdens SMEs still face, despite improvements pushed through by the Commission.

According to Müller, entrepreneurs are also facing up to the need for proper, recognised qualifications for people wishing to set themselves up in business. The cost of quality labels, although they are important, should be kept down to a minimum.

Fair conditions must also be established for transferring businesses, he continues.

Müller rejects the need to write any firm commitments to full employment into the treaty at next year's Intergovernmental Conference, although he accepts that “social policy is absolutely necessary”.

He explains: “We do not see this issue in juridical terms. We operate a silent social policy in our enterprises, we do not believe in hire and fire.”

Müller also sees the single currency as an “absolute necessity”, pointing to the example of Austrian firms losing huge amounts of business to Italy because of currency fluctuations.

But he insists that of more importance than the date is that the conditions for economic and monetary union should be correct.