The government is keeping a close eye on the EU's Small Business Act, which was discussed by the European Union's Competitiveness Council in Slovenia yesterday. Speaking to The Times, Finance, Economy and Investment Minister Tonio Fenech said the law is crucial for Malta, where about 95 per cent of businesses are medium or micro enterprises.

"This is definitely an area of interest," he said. "Malta is very interested in the law and actively participating in the discussions."

The law's primary aim is to reduce the administrative burden for small and medium-sized enterprises and cut red tape to ensure further growth. It is suggesting the setting up of one-stop shops in each EU country where SMEs can find all the information they need about operating in other member states. This could go some way to reducing the obstacles for cross-border trade.

It also targets increasing SME access and participation in EU programmes and funding while increasing their share in public procurement by introducing measures to help boost their participation in government tenders.

Mr Fenech said the main aim of the law was not to increase regulations but rather to have an instrument that helps and supports small and medium-sized enterprises. He said a good number of ideas were put forward in yesterday's meeting, with Malta suggesting that micro enterprises should be exempt from a number of regulations and directives that have accumulated over the years and which could act as a hindrance.

The minister said the government wants to see the law become an instrument which really helps small enterprises rather than just suggest what countries should do, adding that cross-border instruments could be more effective.