EUROPEAN CHARTER FOR SMALL ENTERPRISES

 

 

 

 

1) OBJECTIVE

 

To create the best possible environment for small business and entrepreneurship

 

 

2) ACT

 

Annex III of the Conclusion of the Presidency of the Santa Maria De Feira European Council of 19 and 20 June 2000

 

 

3) SUMMARY

 

Background

1.Small enterprises are the driving force innovation and job creation in Europe. Their small size makes them very sensitive to changes in the industry and environment in which they operate. This is why emphasis was placed on the need to facilitate the development of small enterprises by the Heads of State and Government and the European Commission at the European Council in Feira (Portugal) on 19 and 20 June 2000.

 

 

Principles

2. The Heads of State and Government and the European Commission acknowledge the dynamic capacity of small enterprise, particularly when it comes to providing new services, creating jobs and fostering social and regional development. They also stress the importance of entrepreneurship and of not penalising some of the failures. They also agree on the strength of values such as knowledge, commitment and flexibility in the new economy.

 

 

Actions

3. In order to stimulate entrepreneurship and improve the business environment for small enterprises, the Heads of State and Government and the European Commission have decided to work on ten lines for action.

 

ü      Education and training for entrepreneurship

   In order to nurture entrepreneurial spirit from an early age, there will be a need to impart  knowledge about business, particularly at secondary and university levels, to encourage entrepreneurial initiatives by youngsters and to develop training programmes for small enterprises.

ü      Cheaper and faster start-up

Company start-ups will become cheaper and faster, particularly through the use of online registration.

ü      Better legislation and regulation

There will be a reduction in the negative impact of national bankruptcy laws and new regulation on small enterprises. It will be made easier for small enterprises to use administrative documents and they will not have to apply certain regulatory obligations.

ü      Availability of skills

Training institutions will deliver skills adapted the needs of small enterprises and will provide lifelong training and consultancy.

ü      Improving online access

Public administrations will be urged to develop online services for their dealings with enterprises.

ü      Getting more out of the single market

The Member States and the European Commission will complete the single market so that enterprises can derive the maximum benefit from it. At the same time, national and Community competition rules will have to be vigorously applied.

ü      Taxation and financial matters

Tax system will need to make life easier for enterprises. Access to finance (risk capital, structural funds) will need to be improved.

ü      Strengthening the technological capacity of small enterprises

Efforts will be made to promote new technologies, implement the Community patent and facilitate access to research programmes which are more focused on commercial applications. Inter-firm cooperation and cooperation with higher education institutions and research centres will be encouraged.

ü      Successful e-business models and top-class small business support

Enterprises will be encouraged to adopt best practices. Business support services will be developed.

ü      Develop stronger, more effective representation of SMEs’ interests at Union and national level

Solutions aimed at representing small enterprises within the Member States and the European Union will be reviewed. National and Community policies will be better coordinated and evaluations will be carried out with a view to improving the performance of small enterprises. An annual report on the implementation of the Charter will appear in the spring of each year.

 

 

  4) IMPLEMENTING MEASURES

 

COM(2001) 122 final of 07.03.2001, European Charter for Small Enterprises - Annual implementation report

4. The European Commission highlights the efforts made by the Member States to improve legislation and regulation, to make SME start-ups easier and to strengthen the technological capacity of enterprises. Progress was still required with regard to training, the availability of skills, tax system and financial matters.

The Commission has included the lines for action from the Charter in its Multiannual Programme for Enterprises and Entrepreneurship (2001/2005) and, in cooperation with the Member States, has launched 11 projects aimed at identifying best practice in the areas highlighted by the Charter.

 

COM(2002) 68 final of 06.02.2002, European Charter for Small Enterprises – Annual implementation report

5. A good deal of progress has been made since the previous report, although the scale of the progress varies from one Member State to the next. The analysis therefore picks out some significant achievements in areas such as cutting down the costs and administrative formalities of setting  up a new enterprise and simplifying access to e-commerce. Progress has also been recorded in other areas such as education and training for entrepreneurship, but the results will only be seen in the longer term. The Commission stresses the need to exchange best practices in the areas covered by the Charter. The report also points out that there needs to be stronger representation of small enterprises’ interests.

 

COM (2003) 21 final of 21.01.2003, European Charter for Small Enterprises – Annual implementation report

6. As in the two previous years, progress has been made in the actual implementation of the Charter. Following the previous report, there have been some impressive measures regarding the more effective representation of small enterprises’ interests. However, there is till a dividing line between those few Member States that systematically consult small business on legislation and policy making and those which do not. The Commission reiterates the importance of the exchange of best practices among Member States in order to improve conditions for small enterprises and prevent wide performance gaps inside Europe, and applauds the specific progress which has been made in this field. There are two other fields in which governments have stepped up their efforts considerably: educations for entrepreneurship and better regulation. The report gives numerous examples. In many countries, for instance, initiatives have been launched to nurture entrepreneurial spirit at primary schools, secondary schools and university. In the area of better regulation, the Member States have made progress in revising their bankruptcy. It is the Member States which are primarily responsible for implementing the Charter. This is why the report draws conclusion and makes recommendations especially on Member States’ progress, while also paying attention to progress by the Commission.

  SEC (2003) 57 0f 21.01.2003 European Charter for Small Enterprises – Annual report on implementation in the candidate countries for accession to the European Union

7. The European Charter for Small Enterprises was adopted by the Feira European Council in 2000, but it was not until April 2002, at Maribor in Slovenia, that the candidate countries for accession to the European Union joined this initiative. Following bilateral meetings in 2002 between the European Commission and Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia and Turkey, it was possible to draw up the first report on the implementation of the Charter in these countries.

 

8. The greatest progress has been made in the field of reducing the administrative burdens when registering business and in the simplification of legislation in general. Having said that, improvements in these areas have now become a priority for many countries. Progress in the following sectors has been incontestable: the inclusion of the promotion of entrepreneurship in school and university curricula, the promotion of technological innovation, the provision of business support services by public bodies, the use of information and communication technologies (ICT) to reduce coordination and administration costs, and the representation of small enterprises in the policy-making process. With regard to the very heavy financial burden borne by small enterprises, particularly those which have just been set up, it is interesting to note that major efforts have been made to reduce taxation. On the other hand, the financial market (venture capital, guarantees and loans) is still very under-developed and makes the survival of young enterprises more difficult. Finally, the opening up of the internal market to the candidate countries has been a positive factor for access to new markets and in strengthening the competitiveness of enterprises. It is now up to the candidate countries to abide by the commitments they made during the accession negotiations in the past.