Europe acts together to help small enterprises face the current crisis

In a free market economy, sustainable prosperity has always relied on entrepreneurial potential. It is the 23 million small- and medium-sized enterprises (SMEs) which provide nearly 70 per cent of private sector jobs in Europe and which have created the overwhelming majority of new jobs in the EU in the last 10 years.

Leveraging the potential of SMEs can help kick-start growth when it is most needed. Recent developments in the financial market have severely shaken the confidence in the functioning of the global economy. Following the shock caused by the sudden increase in prices of raw materials, energy and food, companies, large and small, are now faced with liquidity and credit constraints and increasingly also with lower demand for their products and services. It is thus no surprise that citizens and businesses alike are expecting politicians to assume their responsibilities and help find a solution.

As a result of a dedicated SME policy put in place since 2005, we can build on some solid policy achievements. In most EU member states, "one-stop-shop" information centres are now at the service of entrepreneurs wanting to set up a business, and simplified procedures for start-ups are in place. Additionally, an EU-wide business support service, the Enterprise Europe Network, is assisting SMEs at their doorstep with practical business advice, brokerage events, innovation advice and information on all relevant EU policies.

Many examples show that it is possible to go further. Malta, for instance, has been very pro-active in the measurement and reduction of administrative burdens imposed on businesses. In this context, the government, together with relevant stakeholders, has identified four priority areas: company law, financial services, food safety and VAT. Concrete proposals for the reduction of administrative burdens in these areas are in the pipeline.

Today, more than ever, the strength of the EU as a mutual learning platform should be better used. Everyone is invited to share its best practice with the others and to learn from their experiences. I am sure Malta's experience with the measurement of administrative burdens will inspire others.

Whatever the national situation, we must however have a common objective - to better recognise the contribution that entrepreneurs make to society. Jobs are not created by politicians but by people who are prepared to take risks and are keen to get on to new ventures. This is why the strategy of the Small Business Act (SBA) to embed the "think small first" principle in policy making at European and national level is more needed than ever. To make it happen, all actors in the EU should help SMEs in freeing resources to concentrate on productive activities. Businesses do not care where unnecessary bureaucracy comes from. It is therefore crucial for EU governments, regions and local authorities to join in the efforts to unlock the potential of SMEs. The SBA, currently discussed between member states, provides a blue print for a strong policy commitment.

In this context, we have already made important legislative proposals to reduce VAT rates in certain labour-intensive sectors and to establish a new European private company statute making it easier for SMEs to do business across borders. We have also reviewed our state aid rules giving national and regional authorities more freedom to support SMEs.

On the crucial financial front we are working at European level to help SMEs withstand the dire conditions of the banking crisis. The European Investment Bank has mobilised an additional €15 billion thus meaning some €30 billion will be made available for the period 2008 to 2011 in order to improve SMEs' access to finance in the form of loans, venture capital or a mixture of the two. These measures are urgently needed as they will help to restore banks' capacity to provide much needed finance for SMEs.

The European Union's agreement to take joint action to stimulate growth and employment shows its resolve and power to mobilise its diverse resources when needed. I now truly hope that all heads of state and government will endorse the SBA and will speed up its implementation at their summit under the French EU Presidency next month. It is high time to move further up a gear to help our enterprises to withstand the economic slowdown in the benefit of growth and employment.

European Commission, vice-president, responsible for enterprise and industry policy.

Günter Verheugen