Interview: 'Everything in the SBA is negotiable'[fr][de] 

But Verheugen nevertheless stressed he was "optimistic that those who are still reluctant will be persuaded," pointing to the "strong potential" and overall positive budget impact of reduced VAT rates for labour-intensive services such as catering. 

Despite heavy lobbying by the French Presidency, no progress was made on the issue at last week's meeting of EU competitiveness ministers (EurActiv 26/09/08 ), with Germany leading the resistance. 

"What matters most is the lasting improvement of the framework conditions for SMEs in the EU," insisted Verheugen, especially "given the current economic outlook and the uncertainties in the global economy". 

SME policy is a key element of the Lisbon Strategy for growth and jobs as SMEs account for 99% of all European enterprises. The SBA could further enhance this policy, Verheugen said. He was confident that the text would be adopted by EU leaders at their summit on 11-12 December. 

Among the key measures for boosting SMEs competitiveness Verheugen also mentioned the long-debated Community Patent and the fight against red tape. 

Patents are a "crucial element in the promotion of innovation and growth" and of "crucial importance for SMEs," but the high cost of filing and maintaining patents constitutes a "clear competitive disadvantage" for Europe compared to its global competitors, acccording to Verheugen. 

Despite years of disagreement between member states on the issue, the Commissioner believes an agreement on the Community patent (see our Links Dossier ) may be reached by the end of the year, given the earlier "impressive work" of the Portuguese and Slovenian EU Presidencies. 

Asked about the EU's progress on cutting red tape (see our Links Dossier ), Verheugen said he was "most satisfied" with the work of the independent expert group chaired by the former Bavarian Prime Minister Edmund Stoiber. 

"I have no doubt that in the months and years to come the group will crucially contribute to achieving our 25% administrative reduction goal" by 2012, he said. 

The Commission plans to further reduce the administrative burden by overhauling current accounting rules for small businesses, allowing member states to exempt microentities from accounting requirements, Internal Market Commissioner Charlie McCreevy announced yesterday (29 September). 

The step, aimed at further cutting red tape, had already been put forward last year. But it was immediately rejected by businesses, which claim that accounting rules do not constitute an administrative burden but are instead essential for business management and growth. 

To read the interview in full, please click here.