Thinking small, acting big

Date: 22/05/1997

WHILE small and medium-sized enterprises are, nowadays, the only ones creating jobs and growth, their European 'voice' is not quite as welcomed as it should be by EU representatives.

Jan Kamminga, the Dutch president of UEAPME, spoke recently of his country's jobs miracle. “While Europe faces 20 million jobless and, in most countries, unemployment rates go up, the Dutch model creates new jobs,” he said.

This success is based on initiatives which Kamminga himself, as head of the Dutch SME associations, and others proposed to the Dutch government seven years ago and which were agreed after tough discussions and pressure mainly from that same sector.

As in the Netherlands, employment is the big issue of today throughout the Union. The social stability of our continent seems to depend on finding a solution to the unemployment problem - and whatever the answer, it will rely heavily on SMEs.

Europe must find its rhythm of integration again. The potential of the internal market must be fully utilised and a real fiscal policy must be developed. Furthermore, whether in the introduction of the euro, enlargement towards eastern Europe or the Mediterranean partnership, it needs the SME sector to breathe life into these activities.

So how does the formulation of such policies take place in reality?

Organisations representing SMEs must confess to having discovered the importance of the EU legislative process comparatively late. When they did so, employers and workers in industry had already organised themselves well and become the esteemed partners of European institutions.

It was, however, considerably more difficult to organise the voice of SMEs in an effective way. The figures show why: of approximately 16 million enterprises in the EU, only about 35,000 have more than 250 employees, with 99.7&percent; of all businesses falling under the category of SMEs (ie with up to 250 employees).

When the European Commission finally created its Directorate-General for enterprise policy, distributive trades, tourism and cooperatives (DGXXIII), with the task of defining a horizontal SME policy, it recognised, at the same time, approximately 15 organisations as representatives of the sector.

Although DGXXIII's efforts demand due recognition, they failed to check how representative these organisations really were. The simple question “Who, and what, do you stand for and represent?” was hardly ever posed.

Auditing at an earlier stage might have helped to avoid the turbulence in DGXXIII which reached a peak by the end of 1996 with Heinrich von Moltke's departure from the post of director-general.

At this moment, it might be appropriate to ask if DGXXIII is needed at all. I have to confess that, even within UEAPME itself, opinions vary.

Some argue that SME policy is a part of economic policy in general and thus comes under the Directorate-General for industry (DGIII). To create a separate Directorate-General for SMEs becomes an alibi.

Others, including myself, counter that if you want to achieve certain policy goals, a minimum amount of administration is required. But DGXXIII needs wider competences and more financial resources.

Its new Director-General Michel Vanden Abeele highlights the problem when he reminds people that his department spends as much money in a year as the Commission spends on agriculture in half a day.

I firmly believe that DGXXIII should be developed further to become a strong instrument for the formulation and implementation of an effective SME policy, together with the representative organisations.

But it will have to be adapted regularly. In that respect, UEAPME always aims to develop such cooperation on the basis of mutual respect.

Altogether, our organisation is the voice of 8 million enterprises in Europe (approximately 50&percent; of all enterprises) with 25 million employees.

The problems faced by SMEs can be summed up as follows: the first question is always about access to finance; the second concerns the growing burden of bureaucracy; and the third centres on the need for clear proposals in the fields of qualifications, training, late payments, the single currency, the transfer of enterprises, standardisation and many other areas.

When implementing national economic policy, none of the EU's 15 member state governments would neglect to consult and discuss their plans with those national associations which UEAPME represents at European level. Many of them are social partners, concluding collective agreements and involved in professional training.

Yet at the European level, their common association has often found itself banging on closed doors.

Now, slowly, some of those doors are beginning to open. But others remain firmly shut. There are officials in the Commission who neglect basic rules and facts of democracy, and act accordingly.

Take, for example, the creation of the so-called social dialogue in 1989 under the then Commission President Jacques Delors. It was Delors who invited UNICE, ETUC (trade unions) and CEEP (public employers) to participate in that dialogue. They declared themselves to be social partners and other organisations, especially those representing SMEs, were deliberately ignored.

The three thus formed a 'closed shop', which the Commission supported logistically and with tax-payers' money. UEAPME has been systematically excluded. While official documents talk about fair treatment for SMEs, the reality is different.

Admittedly, more and more officials are taking a positive attitude. But there are still too many who refuse to cooperate, often in a humiliating way.

There are some positive examples, such as in the field of research and development, electronic commerce, structural and regional policies and public procurement. But there are also a number of negative ones. The Directorate-General for the environment (DGXI) still refuses to involve us in the elaboration of the eco-labelling scheme; and DGI (external relations) has failed to use our considerable experience in developing actions with SME organisations in central and eastern European countries.

However, the main area where problems remain is the full integration of UEAPME into the social dialogue. It is not at all true that there is open hostility between UEAPME and the Directorate-General for social affairs (DGV). On the contrary, UEAPME enjoys good cooperation with DGV in many fields.

The Maastricht Treaty Social Protocol lays down that the social partners may conclude agreements, as they so desire, which must then be accepted or rejected by the Commission and Council of Ministers on a fast-track decision procedure, without either having the chance to amend the content.

Such agreements then have to be transposed at national level. Until now, there has only been one such agreement - the deal on parental leave struck between UNICE, CEEP and the ETUC in the first half of 1996 which was approved by the Commission and Council.

We think that the Italian EU presidency accepted this agreement with such apparent zeal because it had little else to show for its term at the Union helm.

UEAPME believes that the Commission and Council did not have the right to accept the results of the negotiations, since they contravened the principle of representativeness. Our organisation, representing millions of enterprises and being the true voice of SMEs in Europe, was excluded from these discussions and did not give its mandate to anyone else.

Since the parental leave agreement is the first of its type, it will set a precedent in legal history. That is why UEAPME and eight member organisations from the founding EU countries and Austria have brought an action in the European Court of Justice challenging the directive and the way it was concluded.

First reactions from the ECJ indicate that our case is being taken very seriously. It thus comes as no surprise that the transposition of the directive on to national statute books is posing problems in several countries.

Yet more such problems are being created: social partner organisations have been holding fresh negotiations on the flexibility of working time, again excluding UEAPME. We have informed all the parties concerned that we do not believe the Commission and Council will be able to accept the agreement which emerges. As we are not participating in negotiations, there is no representativeness and any agreement struck will therefore be illegitimate and unacceptable.

We would like nothing more than to be able to concentrate all our energies on working together with the Council, Commission and European Parliament and other associations on the substance of how to improve the framework conditions for SMEs in Europe. Moreover, we believe there is nothing that Europe needs more.

Hans-Werner Müller is secretary-general of UEAPME, the European association representing craft trades employers and small and medium-sized enterprises.