Brussels strengthens Small Business Act

Europe 2020 targets, the financing and market access needs of small businesses and the need for stronger governance are at the heart of the review of the Small Business Act for Europe presented yesterday in Brussels. The objective of this communication, coming two years after adoption of the initial text by member states, is to consolidate this initial framework for small and medium-sized enterprises (SMEs), in particular by responding to challenges resulting from the economic crisis and taking on board the aims of the 2020 strategy.

According to a progress report published in 2009, the SBA’s principles are being implemented unequally in member states and some provisions are not being applied at all. The latter include the code of best practice for public procurement and simplification of insolvency procedures to encourage entrepreneurship. The Commission yesterday urged member states to set up national implementation plans backed up with a “strong monitoring mechanism”.

In its proposals the Commission highlighted the need for smart regulation for SMEs and agreed to study the possibility of setting quantified targets to avoid excessive regulation. It will also conduct regulatory “fitness checks” and single market “performance checks”.

Presenting the proposals, Industry Commissioner Antonio Tajani said that one of the main problems encountered by SMEs is access to finance, made even more difficult by the economic and financial crisis.

“The Commission is proposing to adopt, in 2011, an action plan to improve this aspect, including access to venture capital, and targeted measures to increase investors’ awareness of opportunities offered by SMEs. We are also proposing to make sure that additional criteria imposed on financial institutions do not impact SMEs negatively and to simplify procedures for SME access to EU funds,” he said.

Mr Tajani said that the Commission is also suggesting a set of measures to help SMEs to make the most of the single market and to compete on global markets.

“For the single market, the Commission agrees to undertake a review of the EU’s standardisation system in 2011 and to present taxation initiatives, such as a legislative proposal for a common consolidated corporate tax base (CCCTB) and a new VAT strategy. It will also implement a uniform procedure to facilitate cross-border debt recovery,” the proposal states.

The proposal states that SMEs, which make up 99 per cent of all European businesses, must help Europe to meet the challenge of building a resource-efficient, inclusive and job-rich economy, in line with the 2020 objectives.

On employment and inclusion, the proposals ask member states to reduce business start-up time to three days and the cost to €100 by 2013 and to reduce the time needed to obtain licences and permits to one month. Debt settlement for an honest entrepreneur after bankruptcy should be limited to three years at most to promote second chances.